BMW Finance - Blindingly expensive !

WindyChuffer

WindyChuffer

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Out of interest I got a finance quote on a new 12GS today - a BMW finance quote from a BMW dealer. I almost fell off my chair when i saw the interest rate. 15%. FFS. Dont these guys know that base rates are down !!!! Typical personal loans are around 8%. What are they smoking?

Absolute rip off !!!
 
and you can get 0% on nearly all new bikes at the mo...even Ducati!!!
 
the-other-bradders said:
and you can get 0% on nearly all new bikes at the mo...even Ducati!!!
Click to expand...

Well I bought a new bike a couple of weeks ago through BMW finance and the rate was only 2% more than I was quote from Tescos personal loan. Tescos rates then were typically 8.2% APR but when I enquired, despite having and EXCELLENT credit score I was offered 12.9% APR.
 
you should be very careful - the rate they quote may be 15% but it is worked out on the total amount. for example

10k bike 1k deposit, 2 years finance with a residual payment of say 4k,
the rate will be applied to 9k initially dropping to 4 at the end so you'll be paying 15% on an average of 6.5k rather than what you might expect.

Go to a bank!

Or better still don't buy it if you can't afford it, times is tight:rob
 
ph4824 said:
Well I bought a new bike a couple of weeks ago through BMW finance and the rate was only 2% more than I was quote from Tescos personal loan. Tescos rates then were typically 8.2% APR but when I enquired, despite having and EXCELLENT credit score I was offered 12.9% APR.
Click to expand...

Let me get this straight: You were offered 12.9% @ Tesco, and then offered a 2% more expensive deal by BMW which you accepted. So it seems you signed up to a 14.9% finance deal then at a time when base rates were at 3% :blast.
 
OK. Try moneyextra.com. Typical rates around 8%. Rubbish I hear you cry. But, 53% of the BMW rate !

How about this. You are going to take out a loan for a bike for say 4 years and are being quoted a rubbish rate. You have a mortgage, at say 5%. Lend yourself some ££ from that, BUT be diligent about paying it back over the same period, 4 years, or make the same payments as you would have done with an expensive loan and end up paying it off a damned site quicker. Only suitable for the financially disciplined.

BMW are attempting to take the piss by offering discounts on stock bikes, but offering expensive finance to claw some ££ back, and some people fall for it. :blast.
 
Just done some quick calcs in Excel. Consider these two scenarios.

- £10K borrowed over 48mths
- at 5%, you would pay approx £230pcm, and pay a total of £11,054 over the period
- at 15%, you would pay approx £278pcm, and pay a total of £13,358 over the period.
- a difference of £48 pcm or £2,304 over the 48 month period. A lot.

Heres how:
Get the 5% (or better) rate from equity release from your house, and be diligent in paying it back as if it were a loan so its paid back over the same 48 month period. Ok it may cost you say £300 or so to do the equity release but you can see its worth it !

OR you could do the same equity release thing, and instead of paying £230pcm, be extra disciplined and pay the £278pcm. If you did this you would pay the bike off in 39 months; 9 months later. No early repayment fees, you are in control etc...

OR you could do the same equity release thing, and only pay what the mortgage co wanted, £66pcm approx and pay the bike off over 25 years, which would be plain stupid !
 
Loads of people borrowing money to buy stuff they cannot afford is what got us into the current economic mess in the first place. Whether this is done via an equity release mortgage, a personal loan, or a credit card doesn't matter.

What's wrong with buying either a less expensive motorcycle or a used one (or renting a house/flat or buying a smaller one rather than taking out a sub-prime mortgage at a killer rate)?

If you know that lenders are taking you to the cleaners and you proceed anyway, you're in effect paying a penalty surcharge for living beyond your means. Don't complain. It was your choice.

If you don't realise what's happening, you're being charged extra for being stupid. This is economic Darwinism at work. Read the fine print.

Achim
 
IMO it's all down to what you can afford and the risks if your income drops to below a point where you can afford the additional payments.

Option 1: Personal loan - default on this and you could end up with a CCJ but keep the bike (though selling it might be a better option)

Option 2: HP - default on this and you lose the bike, it's auctioned and you end up with a CCJ for the inevitable shortfall

Option 3: Equity release - default on the mortgage payments and you lose your home but could keep the bike.

Personally I'd avoid equity release unless income is guaranteed.
 
Achim said:
Loads of people borrowing money to buy stuff they cannot afford is what got us into the current economic mess in the first place. Whether this is done via an equity release mortgage, a personal loan, or a credit card doesn't matter.

What's wrong with buying either a less expensive motorcycle or a used one (or renting a house/flat or buying a smaller one rather than taking out a sub-prime mortgage at a killer rate)?

If you know that lenders are taking you to the cleaners and you proceed anyway, you're in effect paying a penalty surcharge for living beyond your means. Don't complain. It was your choice.
Click to expand...

Or you could be like me.

I'm looking at getting a new GSA with a £10k loan. Now I could afford to pay cash for it but....

I'm self employed. I have in my bank enough cash to let me last about a year and a bit with no work on current expenditure levels.

If I were to buy the bike cash then I would get around 6 months of that taken off and be to sub 1 year.

Now taking the loan means £200 a month on the payments which means I can pay myself less and not go into the 40% tax bracket (leave the rest of the money in the company instead of paying £4000 in extra tax on the £10k more than the £2500 interest charges) and also leave myself with more money/time to look for work if/when it dries up.

So a loan is not always the worst option if you have reasons for doing it that way. Yes if you can't afford it then save/buy cheaper but if you can loans can help you end up with more money if used properly.
 
WindyChuffer said:
Out of interest I got a finance quote on a new 12GS today - a BMW finance quote from a BMW dealer. I almost fell off my chair when i saw the interest rate. 15%. FFS. Dont these guys know that base rates are down !!!! Typical personal loans are around 8%. What are they smoking?

Absolute rip off !!!
Click to expand...

Your right you can get loans from 8% but they do say Typical, however rarely will you get that rate. Don't be tempted to apply to different lenders as each time you apply, a credit check is done and logged on your credit file.

If you have a number of searches done in a short space of time any potential lender will see this and assume you are trying to mass large amounts of credit, lenders are less lightly to lend or increase the lending rate. Each search done will stay on your credit file for six months from the date of entry.


Ty
 
Assuming you have it, you could always try paying in cash. You could get laughed at as nobody likes it anymore, there is no commission to be made and it means somebody having to get off their arse and take it to the bank to deposit it rather than simply swiping a card.

Anyone else remember the day when you took a fistfull of the folding stuff if you wanted to buy? Only pukka businessmen in flash suits had credit cards, us mere mortals had to save for what we wanted, or put the best suit on and book an appointment with the bank manager to beg for a loan.:rob
 
Pukmeister said:
Assuming you have it, you could always try paying in cash. You could get laughed at as nobody likes it anymore, there is no commission to be made and it means somebody having to get off their arse and take it to the bank to deposit it rather than simply swiping a card.

Anyone else remember the day when you took a fistfull of the folding stuff if you wanted to buy? Only pukka businessmen in flash suits had credit cards, us mere mortals had to save for what we wanted, or put the best suit on and book an appointment with the bank manager to beg for a loan.:rob
Click to expand...

I think they don't like payments of over £5000 in cash any more due to anti money laundering laws.
 
birdseye said:
do you really believe that 0% finance actuially means it doesnt cost you anything?:blast
Click to expand...

of course it does, well someone has to pay!! but check for yourself...log on to George White Motorcycles, 0% PLUS loads of bits for you and the bike. Yes you may pay near full list, but the extra bits, if you need them, more than compenstate, and dealers still seem reluctant to haggle (BMW ones especially!!) Or for Ducati check Wm Snells - ok new 1198 will replace 1098 hence the deal, but 0% plus £1000 worth of termis aint bad ;)

I've just bought my 05 GS; Abbey Natioanl Zero card, 6m 0% with £0 charge on balance transfers, then if any balance at the end will switch to another (obviously providing there are some) and pay the 3% switching fee...so 3% or less apr ;) best way to finance if you can get it!!

and I dont charge for this, consider it a gift :)
 
Nippy Normans supply Touratech, Wunderlich, Desert Fox and many other makes of accessories.
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