HELP! - For PCP deal, Third party finance vs Franchise finance, which is better?

Spur

Hi All,

Hoping someone can help.
I'm currently looking at 'purchasing' a car (an approved used BMW) on a 3-year PCP plan.

They are offering a 10.9% APR, which is fairly high.

However, i also have a current account with Halifax, who offer a Flex Car Plan (their own PCP deal) at only 4.3%.

My question is this. If i use the Halifax finance, instead of the BMW finance - does this mean i will be left with little barganinig/negotiating power with the franchise??
ie they won't be inclined to give me any extras - servicing, additional warranty, road tax etc.

Any help would be really appreciated.
This is my first foray into financing.

Many thanks
Spur

neilmcl

You should negotiate a discount, regardless of payment type but if they don't offer a reasonable "contribution" to take their finance then do indeed look elsewhere.

You'll need to consider exactly how much, over a 3 year term will the Halfax deal save you and then factor this in to the deal.

And don't get sucked in with the talk of "extras", you want to negotiate purely on cold, hard price.

Cornucopia

In another recent thread, lease rates on new BMWs were found to be competitive with PCP rates on used. (Presumably in part because of the high interest rates).

Spur

neilmcl wrote: »

You should negotiate a discount, regardless of payment type but if they don't offer a reasonable "contribution" to take their finance then do indeed look elsewhere.

You'll need to consider exactly how much, over a 3 year term will the Halfax deal save you and then factor this in to the deal.

And don't get sucked in with the talk of "extras", you want to negotiate purely on cold, hard price.

Very useful info - thanks very much.
The saving from Halifax is exactly what i'm working on and agree on focusing on the hard price!

Spur

Cornucopia wrote: »

In another recent thread, lease rates on new BMWs were found to be competitive with PCP rates on used. (Presumably in part because of the high interest rates).

This is a really good point and something i've looked into.
You're spot on, for a new BMW, using their own financing, the rates are much more competitive - around 4.6%
But as soon as you look at Approved Used, its a starting rate of 10.9% ouch!!

The only issue i've found though, is spec. Arguably you're going to get a better spec car through their used network, for a half decent monthly fee - than you would with a brand new car.

Tbh it's all a bit of a minefield - more research needed i think!

neilmcl

Spur wrote: »

This is a really good point and something i've looked into.
You're spot on, for a new BMW, using their own financing, the rates are much more competitive - around 4.6%
But as soon as you look at Approved Used, its a starting rate of 10.9% ouch!!

The only issue i've found though, is spec. Arguably you're going to get a better spec car through their used network, for a half decent monthly fee - than you would with a brand new car.

Tbh it's all a bit of a minefield - more research needed i think!

Not necessarily, I recently negotiated a 20% discount on a new 1 series spec'd up to what I wanted and I dare say I may have got it slightly cheaper on a pure contract hire deal rather than a PCP. I suppose it depends on how old the car you're looking at and just how much you're thinking on spending/can afford per month.

motorguy

Spur wrote: »

Hi All,

Hoping someone can help.
I'm currently looking at 'purchasing' a car (an approved used BMW) on a 3-year PCP plan.

They are offering a 10.9% APR, which is fairly high.

However, i also have a current account with Halifax, who offer a Flex Car Plan (their own PCP deal) at only 4.3%.

My question is this. If i use the Halifax finance, instead of the BMW finance - does this mean i will be left with little barganinig/negotiating power with the franchise??
ie they won't be inclined to give me any extras - servicing, additional warranty, road tax etc.

Any help would be really appreciated.
This is my first foray into financing.

Many thanks
Spur

Check the fine print on the Halifax finance deal - a lot of the third party deals don't offer a "handback" option at the end of the term - they just leave with you with a large final payment to make.

Spur

@motorguy - thanks for the heads up!

From the initial overview, the Halifax PCP deal looks the same as the franchise offer - but i'll definitely look at it in more detail.

Cheers!

almillar

You're spot on, for a new BMW, using their own financing, the rates are much more competitive - around 4.6%
But as soon as you look at Approved Used, its a starting rate of 10.9% ouch!!

Same for Audi, and I guess all other manufacturers. I don't know how much negotiation is in it, but I guess someone along the line wants to sell new cars more than used cars. Also, 5% of £40k is better than 10% of £10k, over the same term...

motorguy

Spur wrote: »

@motorguy - thanks for the heads up!

From the initial overview, the Halifax PCP deal looks the same as the franchise offer - but i'll definitely look at it in more detail.

Cheers!

I just had a check there and found this on the Halifax website, so its all good...


Optional Final Lump Sum
At the end of your plan you can either choose to:

• Return the car, or;
• Pay the lump sum to own the car.

Fees may apply if the car is not in a good condition or not within your agreed mileage limits.