Advice required on BMW finance - clueless female alert

[AliA]

I'm currently in the final stages of negotiating a really good deal on a 1M. The price of the new car was researched, negotiated and fixed before discussing finance.
The finance deal that I am being offered is a PCP with an APR of 10.4%. I am putting in the full 40% deposit. My hubby thinks that the APR seems high.
After a few hours in the showroom today I feel like I've been bombarded with figures and was being pushed for a deal. I thought it was a good idea to take a little time and ask for advice.
So what do you guys think? Is there a deal to be done on the finance or is it a simple case of take it or leave it?

[marcosgt]

I can't tell you where you'll get a better deal, but your hubbie's thoughts and mine are in synch.

That sounds a lot of APR!

M.

[poing]

10.4% seems very high for a PCP deal, we are paying less than half that on our PCP car. Although to be fair it's a much cheaper car.

[Haighermeister]

It's not the APR you need to look at, it's the Flat Rate. APR is worked out using the flat rate figure, the charges for finance, final charges etc all bundled in for comparison only really.



You should speak to a bank or something, they will probably lend you the cash unsecured (so if you ever sell the car, you can deal with finance yourself) and you'll probably get a better APR, but I would suggest that the repayments are not that much different....

[Amateurish]

Seems on the high side but not unusual. When buying a new car recently most APR deals tended to be 8-10% unless there was a specific finance offer.

You say the price was fixed in advance. Your dealer will be getting substantial support from the finance house so in fact some opportunity from you to get a bigger discount.

[Superhoop]

Another one here that thinks 10.4% on a PCP is on the very high side.

Some manufacturers are supporting PCP's at the moment at anywhere between 0% and about 6% at the moment

[carreauchompeur]

Bank personal loan on that amount is likely to be 6pc ish...

[mercGLowner]

I would be telling the dealer that I will enter discussions again when the APR is below 9%. 10.4% is too high and thy will be making additional commission on that. Email your quote around to a few other BMW dealers and ask them to beat it.

[Haighermeister]

I don't know how much a 1M is, but lets say 35k? So you're putting down 14k and borrowing 21k.

@ 7.9% (Which is the rate you would probably get from a bank) your payments (over 5 years) are £424.80

@ 10.4% they're £450.54.

Just rough figures plucked off the net, but you'd pay £1800 more over the term @ 10.9% and with a bank loan you get flexibility to pay back early/higher amounts whenever you want.

[jake15919]

If you are going to buy on dealer finance, tell them up front and you will, 9/10, get a better purchase price than if they think you are going to pay cash. By now you should have had a look at a bank loan, is it at 10.4%?

[vescaegg]

Good choice of car

[LooneyTunes]

Check somewhere like: http://moneyfacts.co.uk/compare/loans/10k-over-5-y...

Click through the links and you'll see up to £25k at circa 8.5% APR on an unsecured basis from Tesco...

[V8A*ndy]

vescaegg said:

Good choice of car

She's not that clueless after all

[GarryA]

What's your mortgage rate? Surely the cheapest way to loan money at the minute.

[AliA]

GarryA said:

What's your mortgage rate? Surely the cheapest way to loan money at the minute.

I'm in the fortunate position of having no mortgage.

[skeeterm5]

carreauchompeur said:

Bank personal loan on that amount is likely to be 6pc ish...

However the costs would likely be substantially higher given you are funding the whole amount going down the bank loan option.

Average PCP rates across the board seem to be around 7% at the moment. If you want to compare the deal why not trying an independent finance house (eg Oracle) for the PCP

S

[750turbo]

GarryA said:

What's your mortgage rate? Surely the cheapest way to loan money at the minute.

Some people will have you shot for that comment....

Not me though Easiest way to get some cash......As long as you RELIGIOUSLY PAY IT BACK ON TIME!

[Haighermeister]

Oh, I missed that it was a PCP deal. Haha.

If you've got the cash to bang 40% down, do you need to have a PCP?

[swamp]

You can get an unsecured bank loan for 8.2% APR, or 6.9% APR if you're only borrowing 15K.

Not sure how these would work with a PCP deal though, but 10.4% APR is high, especially as it's secured on the car as well.


Edit: if your mileage is low I believe HP may be a better option than PCP.

[Chrisw666]

You need to be certain PCP is best for you and that you really will have some equity at the end. BMW love to get customers on the PCP hook because you will be more likely to PX giving them a lowish mileage used car to move on and putting you into something newer/better at an equal or better monthly payment.