end of lease and negotiating balloon
Discussion
andy665 said:
Cut and dried - you agreed to the agreement at the outset - can hardly expect BMW to take a hit on the balloon if you now consider it too high
I know the agreement was agreed at the outset, agreements can be negotiated, it happens every day in business. I was wondering if anyone has done it, simple as that!One option may be to investigate your termination rights. The problem with leases is that you can be left high and dry at the end with a balloon payment which may be in excess of the cars value, thats where PCP's hold a massive advantage.
Apologies if I came across rather harshly, not intended. I work in he industry, concentrating on finance and I'm always amazed at how many people try and re-negotiate a contract - very rarely does it ever succeed. I always strive to ensure that customers are aware of their commitments / obligations and options at the outset, often recommending a slightly higher monthly payment in order to reduce the balloon figure to a more realistic level
Apologies if I came across rather harshly, not intended. I work in he industry, concentrating on finance and I'm always amazed at how many people try and re-negotiate a contract - very rarely does it ever succeed. I always strive to ensure that customers are aware of their commitments / obligations and options at the outset, often recommending a slightly higher monthly payment in order to reduce the balloon figure to a more realistic level
Edited by andy665 on Sunday 5th September 10:54
andy665 said:
One option may be to investigate your termination rights. The problem with leases is that you can be left high and dry at the end with a balloon payment which may be in excess of the cars value, thats where PCP's hold a massive advantage.
Apologies if I came across rather harshly, not intended. I work in he industry, concentrating on finance and I'm always amazed at how many people try and re-negotiate a contract - very rarely does it ever succeed. I always strive to ensure that customers are aware of their commitments / obligations and options at the outset, often recommending a slightly higher monthly payment in order to reduce the balloon figure to a more realistic level
Any, no problem and I am asking the question not because I have been caught out but just as a matter of interest.Apologies if I came across rather harshly, not intended. I work in he industry, concentrating on finance and I'm always amazed at how many people try and re-negotiate a contract - very rarely does it ever succeed. I always strive to ensure that customers are aware of their commitments / obligations and options at the outset, often recommending a slightly higher monthly payment in order to reduce the balloon figure to a more realistic level
Edited by andy665 on Sunday 5th September 10:54
The current balloon is 14k and the BMW disposal price is probably near to 10k as the car is too old to put back into the dealer circuit.
I have not found anything yet to replace it with and wondered in I offered BM 12k they might take it as opposed to them getting 10k for it if they took it back.
andy665 said:
Welshbeef - if the car is worth more than the GMFV and all they want to offer you is the GMFV figure then you simply walk away, you are free to p/x anywhere you like
of course but if you find the exact spec your after and then they will not move then what? Take a bath on the change costThen you either pay it or lose the car you want - seems like the dealer hold all the cards - can't blame them for trying to get your car as cheaply as possible - rather than p/x ing it you could just hand it back - that way BMW Financial Services get a cheap car rather than the dealer - I'd do that just to spite the dealer. Another option is to pay the GMFV and then sell the car privately.
andy665 said:
Cut and dried - you agreed to the agreement at the outset - can hardly expect BMW to take a hit on the balloon if you now consider it too high
I thought that but when I did ask (which was Zenith not BMW) and challenged the price, they went away and came back with a revised balloon payment saving me about a grand - it was worth the effort of the challenge.I've not heard of anyone negotiating a lower final balloon, you could take the chance and Hand it back, then go and buy it from wherever then sells it.
I handed my 120d back, and found it for sale in Doncaster a few days later, on the collection note there was a note on where the car was being taken.
My partner handed her 118d back and within days that was on autoquake.com
I handed my 120d back, and found it for sale in Doncaster a few days later, on the collection note there was a note on where the car was being taken.
My partner handed her 118d back and within days that was on autoquake.com
I may be getting the wrong end of the stick here (quite possible!) but I got the impression the OP was talking about something along the lines of the old style balanced payments agreement as opposed to a personal contract purchase (PCP). With a PCP the final value is guaranteed and at the end of the agreement you can pay the final payment (GFV) or walk away with nothing more to pay. In those circumstances I can see it being worth your while trying to negotiate on an inflated GFV as you've nothing to lose; if the dealer says no you just say "ok" and give the keys back and look for something else (or try to find where the dealer's sending the car if you really want it!).
However, with balanced payments you HAVE to pay the balloon payment and therefore at the end of the agreement your options are to settle it outright, refinance to cover the balance or sell the car to cover the balloon (assuming it's worth enough of course!). A few years back balanced payment agreements were unregulated so there was no right to voluntary termination (and therefore the risk was with the purchaser if the car ended-up being worth less than the balloon payment). However, I think there was a change to legislation which made these agreements regulated and that in turn meant there was a right to voluntary termination. When car prices tumbled in late 2008/early 2009 that resulted in people handing their keys back and leaving finance companies holding the baby and I suspect it's no coincidence that companies like BMW no longer offer balanced payments as a financing option!
Sorry for the ramble but if the OP has an old style balanced payments agreement I think he no choice but to pay the balloon payment (unless he fancies arguing the toss in court that is!).
However, with balanced payments you HAVE to pay the balloon payment and therefore at the end of the agreement your options are to settle it outright, refinance to cover the balance or sell the car to cover the balloon (assuming it's worth enough of course!). A few years back balanced payment agreements were unregulated so there was no right to voluntary termination (and therefore the risk was with the purchaser if the car ended-up being worth less than the balloon payment). However, I think there was a change to legislation which made these agreements regulated and that in turn meant there was a right to voluntary termination. When car prices tumbled in late 2008/early 2009 that resulted in people handing their keys back and leaving finance companies holding the baby and I suspect it's no coincidence that companies like BMW no longer offer balanced payments as a financing option!
Sorry for the ramble but if the OP has an old style balanced payments agreement I think he no choice but to pay the balloon payment (unless he fancies arguing the toss in court that is!).
andy665 said:
I believe the OP has a straight lease agreement - hence why I don't believe that the finance provider will negotiate the balloon - why should they!!
I've never taken out a straight lease agreement but if it works the same as an old style balanced payments agreement you're absolutely right; you've contracted to pay the balloon and the finance company have no incentive to negotiate a lower figure! As I say, I can see that a PCP may be different in the sense a sale at lower than the GFV may be preferable to the dealer and/or finance company than no sale at all; however, it doesn't sound like the OP is in that position!Just to clarify, it's a PCP.
Why should they negotiate, well look as I said in an earlier post the car will probably make 10k through BM's usual disposal route if I hand it back, so if I call them and say I am interested in keeping the car but not at the balloon amount (14k) but would be happy to pay 12k. The net result is 2k more than they would have got plus they would not need to collect etc.
Car's at the end of term are not collected by the dealer but by BMW so the dealer has no interest or involvement.
Why should they negotiate, well look as I said in an earlier post the car will probably make 10k through BM's usual disposal route if I hand it back, so if I call them and say I am interested in keeping the car but not at the balloon amount (14k) but would be happy to pay 12k. The net result is 2k more than they would have got plus they would not need to collect etc.
Car's at the end of term are not collected by the dealer but by BMW so the dealer has no interest or involvement.
Roger645 said:
Just to clarify, it's a PCP.
Why should they negotiate, well look as I said in an earlier post the car will probably make 10k through BM's usual disposal route if I hand it back, so if I call them and say I am interested in keeping the car but not at the balloon amount (14k) but would be happy to pay 12k. The net result is 2k more than they would have got plus they would not need to collect etc.
Car's at the end of term are not collected by the dealer but by BMW so the dealer has no interest or involvement.
What is it to only be worth £10k trade? Why should they negotiate, well look as I said in an earlier post the car will probably make 10k through BM's usual disposal route if I hand it back, so if I call them and say I am interested in keeping the car but not at the balloon amount (14k) but would be happy to pay 12k. The net result is 2k more than they would have got plus they would not need to collect etc.
Car's at the end of term are not collected by the dealer but by BMW so the dealer has no interest or involvement.
The offer of £12k or hand it back seems to be worthwhile suggesting to them.
Roger645 said:
Just to clarify, it's a PCP.
Doh! This is why Doctors hate non-medical people using medical terminology.There were a couple of comments from people who had cars to hand back at the end of 2008 / beginning of 2009 who were offered lower final settlement figures as the arse dropped out of the market and BMW didn't want the cars at a time when sales were very low.
I guess one difficulty would be in finding someone to negotiate with. I presume the dealers couldn't give a toss as its BMW UK Finance who stand the loss.
Ah, thats different, OP said it was a lease, PCP is an entirely different matter - if the GMFV is 14k but the car is worth less and you want to keep it then I'd definitely be entering into a converstaion with the finance house.
Finance houses are most definitely not set up for returning vehicles and will be happy to try and negotiate with you. A friend of mine got his Grand Cherokee for 5k less than the GMFV within an hour of making the call.
Best of luck
Finance houses are most definitely not set up for returning vehicles and will be happy to try and negotiate with you. A friend of mine got his Grand Cherokee for 5k less than the GMFV within an hour of making the call.
Best of luck
andy665 said:
A friend of mine got his Grand Cherokee for 5k less than the GMFV within an hour of making the call.
That is a good example of a vehicle that's bombed in price though.My brother tried on a VW Golf a month ago - GFV was the same as current forecourt screen prices but they wouldn't even discuss changing the price. It was collected and driven directly to an auction so presumeably it'll sell for a fair bit less.
Deva Link said:
andy665 said:
A friend of mine got his Grand Cherokee for 5k less than the GMFV within an hour of making the call.
That is a good example of a vehicle that's bombed in price though.My brother tried on a VW Golf a month ago - GFV was the same as current forecourt screen prices but they wouldn't even discuss changing the price. It was collected and driven directly to an auction so presumeably it'll sell for a fair bit less.
Guess that's big business too much hassle happy to take a bath on the price though.
Did he buy another golf though?
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