In negative equity with our car

blondeprincess

We took a HP agreement out with BMW end of Jan 2008. We have it over 4 years which takes us to Jan 2012.

We have been looking at changing the car as we have another baby on the way & the boot is quite small & a funny shape.

We owe more on the car than what it is worth & we are in negative equity by about £1,800 :-(

I feel we have been totally done over by BMW we have a balloon payment of £4.000 that we either pay (which we wont as we dont want the car) or we hand it back, It has to be kept under a certain amount of mileage which is fine we can do that

The way they made it sound to us was that our car will be worth at least 4k when we hand it back & that we in theroy could just keep rolling into a new car every 4 years

They didnt say anything to us about keeping it under a certain amount on the mileage we read that a few months later on the paperwork. We have to pay a £1 for every mile we go over what they have set.

We have kept the car serviced etc which is a good thing, but months ago someone obviously not caring opened there car door & had made a dent in our car what happens with this?

Yesterday also when we were looking at a car & were hoping to PX they noticed a small tear in the drivers seat where it is rubbing against the seat (they said it is because it has been poorly designed) but that it would cost abit to replace. I had not even noticed this...

I was thinking of getting my needle & black cotten out & sewing it up

This to me is general wear & tear of the car where does things like this stand when handing the car back if you dont want to pay the balloon payment the same with this small dent??????

If i could hand the car back now i would, i feel we have been stitched up big time & cant believe the car is only worth just over 6k & we have outstanding £7,800

We cant even buy a car for around the same amount ie 6k & put the difference on top of the car loan as that car would not be worth that & this is the problem we are finding we are having

We want a different car as well to save on our monthly payments we are trying to do the house up b4 the baby arrives, we need to get stuff for the baby & we have a wedding to pay for in 2012

Any advice??? Im not even sure if handing the car back is a option yet without any penalties

masterlumps

i dont think you have been done over by BMW at all

it would have been very easy before you took the car on to check the value of similar 4 yo cars in varying conditions

iolanthe07

People are attracted to PCP because superficially you get a better car for the same monthly outlay as an outright finance to purchase. As Judas said, excess mileage charges are standard (though £1 a mile seems a bit high). I agree with Judas that BMW have not done anything wrong; you really need to read the terms and conditions of these deals carefully - it is a big commitment.

mark5

Most cars bought on pcp's are probably in negative equity until the contract has run its full term.

Its a bit like a mortgage you dont really get anywhere in the early years.

bezzza

Congratulations on the baby and good luck for your wedding!

Unfortunately when you buy a car on HP (I've made the same mistake too in the past!) the car will virtually always go into immediate negative equity - it's the same principle if you take out a bank loan or pay cash for the car, the second you drive it off the forecourt (unless you have one of those supercars that they make only 3 of in the world with a waiting list of a thousand then it may be worth more than its original price) it depreciates (even BMWs).

Also never ever believe a salesperson (sorry to all the sales people out there), make sure you read every last word of the contract then go away and think about it some more - this is advice following a personal financial disaster after buying my first car on HP 8 years ago ................... never again!

blondeprincess

Judas wrote: »

1)What kind of car is it; age etc?

2) You can at the end of the deal either return the car with nothing else to pay; pay the 4k and keep it or trade it in for a new deal.

3) Mileage is always attached to these deals; it is normally 6k,10k,12k or 20k - normally the lower end for which mileage penalties exist. This is normally between 4-15p a mile. I dont for a second believe its £1 a mile and think you have misread. If its £1 it must be a high mileage per year allowance.

The car is a BMW 1 series on a 55 plate

We will 100% be handing the car back

They gave us 15,000 miles a year i am doing about 11.000 a year

So there is no way i can hand the car back now & be done with it then you dont think

BMW will charge me a fortune for banging the dent out, they cost a arm & leg in servicing hence why i go elsewhere now for it. I shall have to get it done somewhere else

Doozergirl

I had two kids, one of them a baby, with a 1 series and it was totally workable.

You can sell the car privately - you don't have to trade it in, but your buyers needs to know that they will paying the finance off. My 1 series was a 55 plate and I bought it nearly new from a lady and I made the cheque directly to BMW Finance.

You can take the car somewhere else to have the dents fixed but if you do trade it in, BMW will not charge you directly for the remedial works but it will affect their valuation. It has nothing to do with wear and tear because if you are trading it in, it isn't treated like a lease car, they will simply offer you a trade in price.

You are trading in one car for another.

Aside from that, I agree with everyone else. It's a PCP deal, you haven't been done over; they all go into negative equity immediately and then climb out over time. Nor will you be paying £1 a mile. I think my MINI agreement is just 1-2p a mile over. And you're not even over the mileage which means it doesn't matter AND you aren't handing it back at the end so the charge isn't applicable!

iolanthe07

Unfortunately when you buy a car on HP

The OP bought the car on PCP, not HP.

blondeprincess

Judas wrote: »

Why 100%?.

Because i wont have 4k in 16 months to pay off the baloon payment.. Money like that would go towards my wedding.

I dont mind getting another deal with them but i do not want another ballon payment i want to own the car at the end like i always have.. Thing is with BMW there cars are so expensive in there. We were looking at a X5 & they didnt have one for under 19k on the forecourt nor could they get hold of them at under that :eek:

The whole idea is to keep our payments the same or cheaper....

hewhoisnotintheknow

blondeprincess wrote: »

Because i wont have 4k in 16 months to pay off the baloon payment.. Money like that would go towards my wedding.

I dont mind getting another deal with them but i do not want another ballon payment i want to own the car at the end like i always have.. Thing is with BMW there cars are so expensive in there. We were looking at a X5 & they didnt have one for under 19k on the forecourt nor could they get hold of them at under that :eek:

The whole idea is to keep our payments the same or cheaper....

Are you paying for your wedding with money you have or dont have?

shockingmoment

I've got a Merc on a lease deal.

MB issue a schedule of acceptable 'dings' - including number of dings, locations and dimensions - plus allowable bonnet stonechips.

Check with BMW - they may also do this.