CarMad Posted April 2, 2007 Report Share Posted April 2, 2007 Been looking at a few of the BMW select adverts and wondered if anyone had used it to get their motor ? Reason I ask is I might be moving jobs and the new company car scheme has a very limited choice but offers more money if I opt out. I've had a company car for the last 10 years so don't have any equity from another car. I've got enough for a good deposit and a good amount will be coming in monthly thus my question about select or any other similar deals. Quote Link to comment Share on other sites More sharing options...
Alastair_A3 Posted April 2, 2007 Report Share Posted April 2, 2007 Depends on your mileage i think. One of my mates last year managed to get into a brand new 730d Sport for £450/mnth!! He's limited to 10k per annum and i think it may have been a special deal. Quote Link to comment Share on other sites More sharing options...
Gareth Posted April 2, 2007 Report Share Posted April 2, 2007 [ QUOTE ] Depends on your mileage i think. One of my mates last year managed to get into a brand new 730d Sport for £450/mnth!! He's limited to 10k per annum and i think it may have been a special deal. [/ QUOTE ] That 7 series deal was more likely to have been Contract Hire I think. Quote Link to comment Share on other sites More sharing options...
Gareth Posted April 2, 2007 Report Share Posted April 2, 2007 [ QUOTE ] Been looking at a few of the BMW select adverts and wondered if anyone had used it to get their motor ? Reason I ask is I might be moving jobs and the new company car scheme has a very limited choice but offers more money if I opt out. I've had a company car for the last 10 years so don't have any equity from another car. I've got enough for a good deposit and a good amount will be coming in monthly thus my question about select or any other similar deals. [/ QUOTE ] BMW Select is the name given for their PCP deals. PCP's are very often not the best to fund your new purchase, but it does depend on your own specific example and how long you will own the car in question for. If APR rates are around the 7.5% (often quoted in their adverts) it will on specific cars that they need/want to sell and therefore maybe not what you ideally want. What car/model was it in particular?? Quote Link to comment Share on other sites More sharing options...
CarMad Posted April 2, 2007 Author Report Share Posted April 2, 2007 Not sure at the moment. In my current job I've only done 19k in over 2 years but I think I will be doing more in the new job. As for what motor, 325,325d,330,330d all M-Sport, leather pref upgraded hifi and bluetooth, sat-nav would be a bonus but then my budget needs to be considered. I could get a stupidly large loan I spose to get into something like this or maybe do a 2 year select and save some pennies at the same time. I may just end up getting an older BMW or Audi for a few years then trade up. Having been used to a company car the lack of any major equity is making decisions a little more difficult. Quote Link to comment Share on other sites More sharing options...
gizze Posted April 3, 2007 Report Share Posted April 3, 2007 I guess it depends on how much you will actually take home from that car allowance after tax etc.? If it is say £400 a month, and you have been paying what? £180 a month in bik tax on your current car I guess you could call that £500 a month on the car repayments and £80 left over for servicing and maintainance. You could be in a really nice 335d m-sport that is 3-6 months old for that sort of money, if you do it through someone like Lombard with balanced payments, speak to Gareth and he will give you an idea of what you could be in for your budget, or what your budget needs to be for teh car you really want. Quote Link to comment Share on other sites More sharing options...
CarMad Posted April 3, 2007 Author Report Share Posted April 3, 2007 I did a cash for car calc and it says I could have a little over £600 a month to spend if I opted out. That includes the bik and the tax on my new allowance etc. and would have to cover maint and insurance etc. as well. I could put a few ££k down but not a lot. Not sure I want a 335i as I have a rather heavy foot, any of those in the post above would suit me down to the ground though. Quote Link to comment Share on other sites More sharing options...
gizze Posted April 3, 2007 Report Share Posted April 3, 2007 6 month old 335d with all the toys would be around £35k. £3500 down and then do the repayments at £499 a month over 60 months with a balloon of £8700 at the end. You can get out at any time with that set up, so if you want to swap every 12 months you can do so with no penalty and no interest loaded on the front. Lombard will do that for you no problem drop Gareth a PM as he deals with them. Quote Link to comment Share on other sites More sharing options...
CarMad Posted April 3, 2007 Author Report Share Posted April 3, 2007 Very interesting. Will wait until things firm up properly with the job and that could certainly be an option. Cheers. Quote Link to comment Share on other sites More sharing options...
Gareth Posted April 10, 2007 Report Share Posted April 10, 2007 [ QUOTE ] Very interesting. Will wait until things firm up properly with the job and that could certainly be an option. Cheers. [/ QUOTE ] Good luck on the job front Quote Link to comment Share on other sites More sharing options...
Irnbrukid Posted April 10, 2007 Report Share Posted April 10, 2007 [ QUOTE ] 6 month old 335d with all the toys would be around £35k. £3500 down and then do the repayments at £499 a month over 60 months with a balloon of £8700 at the end. You can get out at any time with that set up, so if you want to swap every 12 months you can do so with no penalty and no interest loaded on the front. Lombard will do that for you no problem drop Gareth a PM as he deals with them. [/ QUOTE ] Do you think a 335d will be that much at 6 months or is that dealer/private salon/touring. Quote Link to comment Share on other sites More sharing options...
jeremyadamson Posted April 11, 2007 Report Share Posted April 11, 2007 [ QUOTE ] 6 month old 335d with all the toys would be around £35k. £3500 down and then do the repayments at £499 a month over 60 months with a balloon of £8700 at the end. You can get out at any time with that set up, so if you want to swap every 12 months you can do so with no penalty and no interest loaded on the front. Lombard will do that for you no problem drop Gareth a PM as he deals with them. [/ QUOTE ] Chaps - just one thing...the biggest benefit to my mind of Select and other such schemes is the guaranteed future value/balloon/final payment at the end. This means that at the end of the agreement, you can either benefit from any equity left in the car (if it's worth more than the stated balloon final payment) or just give the car back and walk away if the cars value is less than the stated balloon final payment. The problem with doing one over such an extended period (i.e. 60 months) is that you have to wait for such a long time until the agreement ends so you can take advantage of the protection it offers. If for example you think at the beginning that keeping it for five years is fine but actually at the end of the 3rd year you really fancy a change....but discover that the value has plummetted further down than expected so it's actually in negative equity. Depending on your circumstances you may be forced to keep the car until the 5 years is up. The other point is, I suspect that the example given above is not a guaranteed future value scheme....correct me if I'm wrong.... and if so, it means that any difference between the value of the car and the balloon final payment will be your problem to fund. I do understand however, that the balanced payment plans are good for people who change cars alot as the interest charges are divided across the whole period of the loan, and I imagine that the Select ones lump a load of it up front. So swings and roundabouts I guess. Quote Link to comment Share on other sites More sharing options...
Gareth Posted April 11, 2007 Report Share Posted April 11, 2007 [ QUOTE ] [ QUOTE ] 6 month old 335d with all the toys would be around £35k. £3500 down and then do the repayments at £499 a month over 60 months with a balloon of £8700 at the end. You can get out at any time with that set up, so if you want to swap every 12 months you can do so with no penalty and no interest loaded on the front. Lombard will do that for you no problem drop Gareth a PM as he deals with them. [/ QUOTE ] Chaps - just one thing...the biggest benefit to my mind of Select and other such schemes is the guaranteed future value/balloon/final payment at the end. This means that at the end of the agreement, you can either benefit from any equity left in the car (if it's worth more than the stated balloon final payment) or just give the car back and walk away if the cars value is less than the stated balloon final payment. The problem with doing one over such an extended period (i.e. 60 months) is that you have to wait for such a long time until the agreement ends so you can take advantage of the protection it offers. If for example you think at the beginning that keeping it for five years is fine but actually at the end of the 3rd year you really fancy a change....but discover that the value has plummetted further down than expected so it's actually in negative equity. Depending on your circumstances you may be forced to keep the car until the 5 years is up. The other point is, I suspect that the example given above is not a guaranteed future value scheme....correct me if I'm wrong.... and if so, it means that any difference between the value of the car and the balloon final payment will be your problem to fund. I do understand however, that the balanced payment plans are good for people who change cars alot as the interest charges are divided across the whole period of the loan, and I imagine that the Select ones lump a load of it up front. So swings and roundabouts I guess. [/ QUOTE ] Not entirely so. You have a few things slightly out there as regards how a PCP (e.g. BMW Select) works. First off a PCP is actually a contract rental so you are, in effect, just "renting" the car from the Manufacturer/Finance provider. Also the MGFV (Maximum Guaranteed Future Value) is set by the provider according to the way their own forecasts and software are set up. They cannot be by passed so any maximum figure is just that. The other issues with PCP's are the usually higher percentage of interest charged over the bank or finance house base rate-allied to the major issue of front loading of the interest in the loan. All PCP's (and fixed rate HP) deals have what is known as the "Rule of 7/8" which means that the interest is very much front loaded to keep you in the agreement-and you you rarely eat into any of the actual capital until 18-24 months of a 48 month agreement. Put plainly that means that if you sell/settle or change the car at that point in the loan the settlement will be not far off the intial amount borrowed irrespective of the monthly payments already made. You are right in identifying that the Future Value/Final payment for the example Guy posted (a Balanced Payment Lease Purchase agreement) is not guaranteed. However if it is set at the correct ethical and logically calculated level if still affords the borrower to take equity out at the end of the agreement and to not have to fund any shortfall-as long as that criteria is applied. The bottom line is that if you tracked two (on paper) indentical loans-one PCP and one Lease Purchase-the actual diffrences in cost would be stark. I have set agreements up for many people that have saved them thousands of pounds over Manufacturer supplied PCP deals by going down the Lease purchase route. The only people who really should have a PCP are those who know 100% they will keep the car for the full term and, more than likely, go back to the same dealer/franchise for the next car. Otherwise it pays to look at the other, better value, options available Quote Link to comment Share on other sites More sharing options...
gizze Posted April 11, 2007 Report Share Posted April 11, 2007 I look at it like this, either you take a gamble on the GFV or you pay for it in higher rates throughout the agreement. And to be fair it is not a gamble, BMW insisted on giving me a finance quote for the 335i, they came back with a monthly figure of £660 a month I think it was, that was with a GFV of £15500 after 36 months. I then pointed out that my agreement was £490 with a balloon of £13k after 48 months. He kept saying that his agreement gave me a Guarunteed value at the end, as soon as I pointed out that I could up my repayments to match his at £660 a month and I would only owe £5100 at the end and would more than likely walk away with £10k in my pocket he shut up! Don't pay over the odds for a GFV, pay that extra into your repayments on a blanced scheme and you walk away with the extra at the end. Quote Link to comment Share on other sites More sharing options...
Gareth Posted April 12, 2007 Report Share Posted April 12, 2007 Also with balanced payments you have the option to pay off the final future value without any penalty as well-ideal if you get a bonus/windfall and choose to use that way. Also there are no excess mileage charges that you get with a PCP agreement-as these are effectively personal contract hire scheme's so you are just "renting" the car in question. That also makes it difficult if you want to mod the car as you are renting, not owning the car in question Quote Link to comment Share on other sites More sharing options...
gizze Posted April 12, 2007 Report Share Posted April 12, 2007 That is a good point, last year I suddenly had a spare £5k, which is a rare thing! and I put it into my agreement on the 535d, I could take it off my balloon, reduce my monthly amounts or shorten the term, I went for the later reducing the remaining term from something like 32 months to 14 months, it reduced it very nicely. I ended up swapping for the CSL a couple of months later and it left me a nice nice deposit for that. Quote Link to comment Share on other sites More sharing options...
simon909 Posted May 13, 2007 Report Share Posted May 13, 2007 [ QUOTE ] 6 month old 335d with all the toys would be around £35k. £3500 down and then do the repayments at £499 a month over 60 months with a balloon of £8700 at the end. You can get out at any time with that set up, so if you want to swap every 12 months you can do so with no penalty and no interest loaded on the front. Lombard will do that for you no problem drop Gareth a PM as he deals with them. [/ QUOTE ] Is this available for private individuals or just business users? I am looking at getting a new E92 330 M Sport and don't want to have to put a huge deposit down. The rough example shown looks a good way of financing the car. Quote Link to comment Share on other sites More sharing options...
gizze Posted May 13, 2007 Report Share Posted May 13, 2007 PM Gareth above and he will do that for you. Quote Link to comment Share on other sites More sharing options...
Gareth Posted May 17, 2007 Report Share Posted May 17, 2007 [ QUOTE ] [ QUOTE ] 6 month old 335d with all the toys would be around £35k. £3500 down and then do the repayments at £499 a month over 60 months with a balloon of £8700 at the end. You can get out at any time with that set up, so if you want to swap every 12 months you can do so with no penalty and no interest loaded on the front. Lombard will do that for you no problem drop Gareth a PM as he deals with them. [/ QUOTE ] Is this available for private individuals or just business users? I am looking at getting a new E92 330 M Sport and don't want to have to put a huge deposit down. The rough example shown looks a good way of financing the car. [/ QUOTE ] Both really Simon. But the difference between the lenders in the detail of their agreements can be quite substantial-especially in terms of settlement penalty. Quote Link to comment Share on other sites More sharing options...
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