Buy the car or hand it back?

ITBarbie · 12 December 2017 at 7:23PM

Hi

In April I would have owned my car for 4 years on a PCP deal with BMW. I purchased the car for just shy of £24K and used my car as px which they gave me just over 5k for. I pay about £325pm. They GFV is £10870.

When approaching BMW 6months ago they’d only give me £9k for my car if I wanted to buy another BMW. It appears the GFV was overestimated on what the car is now actually worth &#55357;&#56848;. It’s an msport 320d convertible fully loaded 2011 (led lights) and well kept. Yes there is kerbing on wheels but I’d refurb if required but other than that is in great condition with 42k on clock. I’m within contract mileage of 10k per year.

I will not lash out another 4K deposit to get a newer model and feel somewhat peeved about the GFV and the fact I’m having to pay even more.

Would you refinance (the cheapest way possible) and keep it so you have something at end or would you throw in the towel and find 1-2k and buy a cheaper model? I’m being indecisive

flashg67 · 12 December 2017 at 9:40PM

Is it worth more in a private sale or with we buy any car or whatever? If not, seems sensible to give it back and let them take the hit, although it seems they won't actually lose out when they resell. Car would be 12k on a forecourt?

Can you refinance the balloon over a reasonable period for a reasonable amount? I suspect you'd end up paying the same payment but end up with an 8 year old car. Yes it would be yours but will have cost extra in maintenance etc. Your choice whether you feel you can put up with paying the same payment but end up with an older car.

System · 13 December 2017 at 6:22AM

ITBarbie wrote: »

Would you refinance (the cheapest way possible) and keep it so you have something at end or would you throw in the towel and find 1-2k and buy a cheaper model? I’m being indecisive

Your car has cost you a total of £20,600 over 4 years with most of that being depreciation. If you get a newer car that's going to cost you a similar amount again in depreciation.
The cheapest way possible is to keep what you've got or buy something a couple of years old for the same price as the balloon payment. You could get a 2-3 year old Ford Mondeo for £10k, sell it 4/5 years later and it'll set you back around £1500-£2000 a year compared to the £5000 a year your BMW has cost you.

ITBarbie · 13 December 2017 at 6:19PM

Thanks for the reply. It looks like I may keep it and just try to refinance the cheapest way. I’ve looked after it so would be a shame. Thanks once again for replying

System · 14 December 2017 at 2:47AM

There's a lot of value in better the devil you know. A £10k loan should be around 3% with payments around £200 a month for 3 years if you've a decent credit record

Nebulous2 · 14 December 2017 at 8:21AM

I'm afraid I'm not getting this at all. Paying almost £11k for a car worth £9k doesn't sound a good deal to me.

It is also at an age and price point that I hate for a car. Buy a new or nearly new car and get a warranty, recovery etc all included. Buy a relatively cheap car and if it needs a major repair like a new engine you can write it off. Buy an £11k BMW at 6 years old and if it needs a new engine it could cost you half the price of the car, but be too expensive to write off. Less than 10k a year is slightly under the point where running a diesel makes sense. Modern diesels can also need some expensive repairs.

I'd change it.

Herzlos · 14 December 2017 at 2:16PM

If it's been well looked after I'd finance the balloon payment and keep it. It'd be a less risky option than handing it back and spending £9k on a different one (it'd either be worth £7k or be a private sale), and all the worry about how well it was maintained and why it was up for sale.

tonycottee · 14 December 2017 at 5:50PM

Nebulous2 wrote: »

I'm afraid I'm not getting this at all. Paying almost £11k for a car worth £9k doesn't sound a good deal to me.

It is also at an age and price point that I hate for a car. Buy a new or nearly new car and get a warranty, recovery etc all included. Buy a relatively cheap car and if it needs a major repair like a new engine you can write it off. Buy an £11k BMW at 6 years old and if it needs a new engine it could cost you half the price of the car, but be too expensive to write off. Less than 10k a year is slightly under the point where running a diesel makes sense. Modern diesels can also need some expensive repairs.

I'd change it.

But buy a new car and it's instantly worth several thousand less than you paid for it anyway.
And why do you point to the worst case scenario of an engine needing replacing? How often does that happen?
I bought a 3 year old Lexus in 2009 for £13k. It's still going now, and apart from one £600 repair bill, it has been great.

ratrace · 14 December 2017 at 8:47PM

tonycottee wrote: »

But buy a new car and it's instantly worth several thousand less than you paid for it anyway.
And why do you point to the worst case scenario of an engine needing replacing? How often does that happen?
I bought a 3 year old Lexus in 2009 for £13k. It's still going now, and apart from one £600 repair bill, it has been great.

shh come on now dont tell everyone, let them keep trading that way we can pick up the bargains lol :money:

Nebulous2 · 14 December 2017 at 11:23PM

tonycottee wrote: »

But buy a new car and it's instantly worth several thousand less than you paid for it anyway.
And why do you point to the worst case scenario of an engine needing replacing? How often does that happen?
I bought a 3 year old Lexus in 2009 for £13k. It's still going now, and apart from one £600 repair bill, it has been great.

Or nearly new car I said. I've been looking at cars recently and you can get a diesel Passat, two years old, for around £12-13k, with a couple of years manufacturers warranty.

That may not appeal to someone driving a convertible BMW, but it would be a far better deal in my book.

New engines may not happen that often but new dpfs, clutches, flywheels, wheel bearings are all costly repairs and happen often enough to be a risk on a 6 year old car.

MataNui · 15 December 2017 at 10:41AM

Nebulous2 wrote: »

I'm afraid I'm not getting this at all. Paying almost £11k for a car worth £9k doesn't sound a good deal to me.

Except thats not what they would be doing (well no more than anyone does when they buy a used car from a dealer). The balloon payment is almost 11k but they have been offered 9k as a trade in. Thats the dealers margin. It would still cost them 11k (probably more and not 9k) to source a similar car elsewhere if they got rid of this. They knows this cars history and that in itself is worth a couple of grand.

Worst possible option would be to sell this and try to replace it with something similar or slightly cheaper. Cheapest/best option would be to finance the balloon somehow and keep it followed by a trade up if they are into that whole new car thing.

#EDIT#. Just read what the car is. So that really does mean the worst option would be to replace with something similar. I had one of these. Highest devaluation of any car i have ever owned by a very long margin. I lost a fortune on it. BMW devaluation is !!!! but these are an absolute joke.

Buy the car or hand it back?

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