Bmw car finance

Trapventures

I get that but I think it works every £1k = around £25-30 off the Monthly payment, it isn’t that much different in the grand scheme of things. I’d have to drop a heavy deposit for it to be a big difference.

Trapventures

Why would I move out at 21 when I’m comfy saving, earning a solid wage and my dad and I enjoy living together. I’m good at what I do and I get paid accordingly.

Is that dark? Or are you showing signs of jealousy? Lol.

Regardless, what you’ve said contains 0 advice or help so I’ll leave it there.

BoGoF

For somebody that claims to be stingey you don't seem to have a problem throwing money away. But at the end of the day your money/your decision.

Trapventures

Cars are my vice...hence why my first car was and currently still is a 2L petrol 3 series M sport with all the spec options. It’s where my interests lie, so naturally I’ll be willing to be flexible in my purchases.

Others waste money on cigarettes and alcohol, I do neither.

BoGoF

I get that and in your position would be tempted to do same.....but lending 32k to a 21 year old is a risk the finance company may not be prepared to take

Trapventures

Oh don’t get me wrong I understand the risk on paper entirely, but I’m sure my statements etc will reiterate that I’m no risk affordability wise....and if it doesn’t, I’m lucky enough that family trust me and know the above is correct.

So guarantor options are available to me too, if they accept that. I think they do, need clarification though.

bazzyb

Trapventures wrote: »

Nobody with common sense buys a 32k vehicle outright, in 2 years it would be worth 20k. I’d of lost 12k.

Which is still less than how much you will be losing at £444 per month + £2k.

Have you looked in to leasing? As you have no intention of keeping the car this could be a better option.

AnotherJoe

Trapventures wrote: »

Car = 32k (4.9% Apr) Monthly £444 dep 2000 ... I pay £306.00 pm as it is.

If you deposited an extra £10k, eg £12k instead of £2k, then each year you'd pay £490 less interest. Probably on £10k thats in a bank or similar you arent getting much more than 1% so that would be £100, so roughly you are losing £390/year so on a 2 year deal nearly £800 better off. Not be sniffed at.

DrEskimo

Trapventures wrote: »

That!!!8217;s BS. Sorry but it is.

Nobody with common sense buys a 32k vehicle outright, in 2 years it would be worth 20k. I!!!8217;d of lost 12k.

Buying a car with the !!!! already fallen out of it, yes I agree with. Buying a brand new/almost new? Nope.

It's a very common misconception that financing a new car with PCP is somehow better than buying a new car. I'm on a few car forums and I've read the same arguments you have put forward time and time again. I imagine you also subscribe to the phrase 'rent an depreciating asset, buy an appreciating one'.

Whilst there is some truth, the issue is that PCP is not renting. It's a loan.

I don't have all the details of your PCP agreement, but will fill in some blanks based on an educated guess to illustrate why buying a new car with PCP is much more expensive that buying with cash, which begs the question; why exactly is 'renting' the car better?

RRP £32k
Monthly £444
Deposit £2,000
APR 4.9%
Term (not given so guessed) 48months
GFV (not given so guessed) £13,000

Lets assume that in 4yrs time the BMW finance team have nailed the expected future price and the trade in is exactly £13,000. You would have paid £2,000 deposit and 47 payments of £444.

Total = £22,868.

Now what if you paid cash. £32k paid for, and again, in 48months you decide to trade the car in. Now trade isn't dependent on how you buy the car, so cash buyer gets exactly same price as PCP buyer above, £13,000

Total = £19,000.

Cash buyer has saved £3,686. This is the cost to borrow the money in the form of PCP finance. Guess he wasn't that stupid after all....

Even if the car depreciates to £10k, the cash buyer is still better off. Whilst the PCP buyer has saved £3k in unexpected depreciation, the cash buyer has saved £3,686 in interest costs, so cash buyer is still £686 up (a highly unlikely scenario and not worth spending £3,686 to mitigate against...!).

Trade in early at any point, same applies. The car will depreciate independent of how you chose to buy it. PCP just adds high amounts of interest costs on top. This does make it more affordable (lowers 'monthlies'), but it ends up more expensive overall.

Leasing can be different. Leasing a new car can be cheaper than the expected depreciation. But this is more restrictive, and the depreciation can be minimised by buying discounted/nearly new and selling private to maximise sale cost.

HTH :beer:

fiisch

I do the same.... It definitely isn't MSE though - my current PCP was £1500 down and £479 a month, but I've started to see the error of my ways (we have two of the bloody things to worry about!).

I suspect it's come back as a maybe as you have a missed payment - even "only" one in the last 1-2 years might give lenders a cause for concern. I suspect ultimately they'll come back and approve given your situation, but you could offer a higher deposit if they don't agree the initial amount.

Would echo what has been said already - for PCP, higher deposits are the way forward. If you're into cars, I trust you're after something a bit more interesting than a 320 this time around.......

Worth considering that higher monthlies will hurt your borrowing capacity when you come to apply for a mortgage - but then, you can pay a PCP down mid-term if you need to reduce those payments to improve your lending power.