Finance Problem (BMW / Polestar)

inandbetween

Hi,

Last year (Feb 21) I got an approved used BMW diesel X2 on PCP. I got it on the assumption that I would be going back into the office (10k miles PA) but my company is now going to work from home mostly permanently and we head into the office when needed.

The car is nice but as it's currently costing me £490 per year in tax and I don't need a diesel... I'm looking to get rid. I got the car on 4500 miles and today over a year later it's sat on 8500 miles... 4000 miles in a year.

I'm looking at going electric because I now only do short journeys and I really like the Polestars.

The problem I have is Polestar don't have dealerships and so they don't do trade-in's, they just refer you to We Buy Any Car or Motorway. My PCP contract says I cannot sell the BMW so I'm stuck as to how to get the equity I have out (~ £5k) so that I can pay the Polestar advanced payment.

The only thing I can think of doing is to sell the car on Motorway which wipes the slate clean and then I'll have to order the Polestar and be without a car for a few months (March 2022 earliest delivery). My worry though is what happens if I sell the BMW and then fail on the finance application for the Polestar or who knows?

Is there any better way around this and has anyone had similar experiences?

DrEskimo

You are fine to sell the car to a broker, local dealer or privately. It's just the logistics of who settles the finance as part of the transaction.

Private is complicated, so if you can get a decent price selling to a dealer or broker, that is often easier. You would only need to put the full deposit down when you collected the car, normally a nominal holding deposit of £500 when you place the order. So shop around whilst waiting for the new order and then sell close to the time to the highest bidder. I've found my local garages have been competitive and the proximity makes it easy.

As for whether you would fail the finance, that's unlikely but possible I guess. Either don't rely on finance or take the risk.

Grumpy_chap

inandbetween said:

Hi,

Last year (Feb 21) I got an approved used BMW diesel X2 on PCP. I got it on the assumption that I would be going back into the office (10k miles PA) but my company is now going to work from home mostly permanently and we head into the office when needed.

The car is nice but as it's currently costing me £490 per year in tax and I don't need a diesel... I'm looking to get rid. I got the car on 4500 miles and today over a year later it's sat on 8500 miles... 4000 miles in a year.

I'm looking at going electric because I now only do short journeys and I really like the Polestars.

The problem I have is Polestar don't have dealerships and so they don't do trade-in's, they just refer you to We Buy Any Car or Motorway. My PCP contract says I cannot sell the BMW so I'm stuck as to how to get the equity I have out (~ £5k) so that I can pay the Polestar advanced payment.

The only thing I can think of doing is to sell the car on Motorway which wipes the slate clean and then I'll have to order the Polestar and be without a car for a few months (March 2022 earliest delivery). My worry though is what happens if I sell the BMW and then fail on the finance application for the Polestar or who knows?

Is there any better way around this and has anyone had similar experiences?

What exactly does the PCP contract say?  

PCP is simply a finance product.  You own the car when the debt is fully repaid, so the likes of WBAC or Motorway will buy the car from you, settle whatever the outstanding finance is and then pay you any excess.

It is odd that your concern / motivation to switch cars is the VED rate and not the actual PCP costs, which must be much higher.

If you are doing only 4k miles per year, do you really need to go for something as expensive as the Polestar - that will be a large outlay of £40k which will become depreciation.  You've said you can be without a car for a few months between selling the BMW and delivery of the Polestar, so could you divest the car altogether and simply hire a car when required?

Flight3287462

OP can you really afford a Polestar?  If you can't put down the deposit from savings it all sounds a bit tight to me.

Bigwheels1111

March is the earliest date, what if it’s June or July etc.

Herzlos

You'd be much easier funding the Polestar payment elsewhere, then selling the car to Motorway a couple of days before collecting the Polestar. It's a gamble if the car values change much but they'll be crazy for a while.

Or just go buy something that's in stock somewhere and do a regular trade in.

ratrace

Also if you have only done 4k miles in a year in the x2 and are going to be working from home why do you need such an expensive car just to look good on the drive for 8hrs of the day it makes no sense to me why you would want to take on a load of debt, as the poster said above this all seems a little to tight

best thing you can do is a buy a petrol 5k car for cash after selling x2 and bank the pcp payments the goal should be to get out of debt and stay out, otherwise you are banking everything on the job not letting you go, hope that helps 

born_again

If Op wants a EV, then plenty of 2nd hand ones that will cover 4K miles a year no problem.

But it's up to the OP to decide what car they want to sit on the drive for most of the year.

Indout96

As you say you cannot sell the BMW in the contract are you sure its a PCP and not a PCH ?

Steve182

This is a crazy idea

Whichever way it's acquired the car will cost over £1/mile in contract hire or depreciation

Why would you want to do this?

On a separate note, have you test driven a Tesla 3? I've driven both and ordered a T3LR

For equivalent spec the polestar is about £7K more than the Tesla. The more favourable lease costs for Tesla 3 VS Polestar suggest significantly better residuals for the T3