correct, or credit cards!!!! some dealers do make it very difficult to buy.....
Would you like to take a 2% hit on a £10 000 bike?
BMW Finance - Blindingly expensive !
- Thread starter WindyChuffer
- Start date
Would you like to take a 2% hit on a £10 000 bike?
You guys really need to educate yourselves on how vehicle finance works. APR is a totally different animal to a flat rate .....................
the-other-bradders
Guest
other places who sell things do...kitchens...furniture shops....car dealers 9well some anyway)...jewellers
most annoying tho is the advert 'we take all credit cards' what they dont say is 'up to £500!!!'
oh, and they will take it for a 2k service bill!!
wake up - its called 'sales' for a reason
WindyChuffer
Registered user
Thats a bit harsh mate. You are correct in saying that APR is difference to base rate, but not sure what your point is.
A finance deal is comprised of the balance to which base rate applies, and then there are invariably additional fees added; with BMW credit arrangement fees, purchase fee and whatever else they can get away with. These are costs of credit and effectively increase the interest rate. Factor these in, some basic maths and out pops the APR, which provides a % figure that can be used to compare deals against each other.
If you try to compare finance deals using just the base rate and not the APR, you are kidding yourself.
I was shown, by a BM salesman, that APR can be calculated a number ways 
the-other-bradders
Guest
nice post old chuffer....loads of things need comparing, especially of going PCP route, but the main test is:
whats the total purchase price
how much am I paying in total after I have cleared every bit of debt and own it
and maybe do I want to own it or trade it every say two years
ignore the rest
sup:
whats the total purchase price
how much am I paying in total after I have cleared every bit of debt and own it
and maybe do I want to own it or trade it every say two years
ignore the rest
sup:
WindyChuffer
Registered user
I was shown, by a BM salesman, that APR can be calculated a number ways
Motortrade salesmen aren't exactly known for their financial acumen... LoL.
nice post old chuffer....loads of things need comparing, especially of going PCP route, but the main test is:
whats the total purchase price
how much am I paying in total after I have cleared every bit of debt and own it
and maybe do I want to own it or trade it every say two years
ignore the rest
Ta. You've hit the nail on the head.
Motortrade salesmen aren't exactly known for their financial acumen... LoL.
Ta. You've hit the nail on the head.
Well I am one of those said Motortrade salesman and all I've read pretty much without exception is a lack of understanding of how it works. I'm not saying it's your collective fault as it is tediously complicated.
The fact is that you CANNOT work out an APR with a calculator and with the greatest respect (and I mean that) to those that think you can I'm afraid you are mistaken.
Example ............
Mrs. Miggins asks for a quote for £3000 from the dealer over 2 years and her APR is 12.5%. Her payment will be about £140 per month. She then asks for a quote over 1 year and the payment logically doubles to £280. However the 1 year agreement had an APR of 28% yet she pays exactly the same rate of interest ie. it costs her the same amount of money to borrow the money per year.
APR is affected by so so so many things and in reality bears little connection with the rate of interest you pay. It has calculus based on document fee, term of loan, amount of money borrowed etc etc.
Flat rate finance however is childs play and is as simple as basic maths.
5% flat is quite simply that. if you borrow £1000 over a year you pay 5% in interest (£50) The percentage is calculated on the amount you borrow by the term you borrow it. 5% per year. So borrowing the £1000 over 5 years attracts 25% interest over the whole period.
Flat rate is what you get paid on your savings, APR is something banks use to confuse people into thinking you are getting a better deal.
I once got a quote from a Motorrad dealer which was 3.25% flat, The APR however was 16% owing to all the other criteria ie ocument fee, term of loan, amount of money borrowed. Doesn't change the fact that I only paid 3.25% interest for every year I borrowed the money!
Confused? ......................... I don't blame you!!!
the-other-bradders
Guest
0% is 0% however you wrap it up
While its aimed at buying a car, the following advice on Moneysavingexpert.com makes a lot of sense
http://www.moneysavingexpert.com/shopping/cheapest-new-cars
When I bought my GS1200 I followed the advice and got a bank loan for just over 5%. BMW couldn't get anywhere near it. While there were no discounts off the list price at the time I did get a discount on accessories.
http://www.moneysavingexpert.com/shopping/cheapest-new-cars
When I bought my GS1200 I followed the advice and got a bank loan for just over 5%. BMW couldn't get anywhere near it. While there were no discounts off the list price at the time I did get a discount on accessories.
Marjorie Proops
Guest
Sorry Tunneruk, but (assuming there are monthly payments as you say) your 'flat rate' examples are wrong!
To use your example of £1,000 over 12 months with an interest rate of 5% = £50 would only be correct if you kept the whole £1,000 for a year and then paid back £1,050 in one go. If you start paying back after one month and make a payment each month thereafter you haven't borrowed all of the £1,000 for a full year, so you haven't been charged (only) 5%!
I'm amused that you think I'm wrong, Mathmatically yes what you are saying is true (once you had paid the first payment then you actually owe less so the 5% interest should then be based on the balance outstanding month on month etc etc)
However out here in the real world the fact is that a flat rate is calculated over the given period at the start of the agreement and charged per annum.
You're really gonna have to trust me on this, I DO THIS CALCULATION EVERY DAY!
I'm amused that you think I'm wrong, Mathmatically yes what you are saying is true (once you had paid the first payment then you actually owe less so the 5% interest should then be based on the balance outstanding month on month etc etc)
However out here in the real world the fact is that a flat rate is calculated over the given period at the start of the agreement and charged per annum.
You're really gonna have to trust me on this, I DO THIS CALCULATION EVERY DAY!
So going on this, the flat rate is used to hide the true cost, as you do pay some of the capitol back every month, and the real cost is shown by the APR rate, because it adds all those little arragement fees and the fact you pay the capitol back during the year, aint that why the APR rate is shown?
So going on this, the flat rate is used to hide the true cost, as you do pay some of the capitol back every month, and the real cost is shown by the APR rate, because it adds all those little arragement fees and the fact you pay the capitol back during the year, aint that why the APR rate is shown?
IIRC that's why "they" wanted APR to be quoted as it gave the "real" cost. But APR can be calculated in so many different ways that it can be hard to compare two quotes if you only look at APR.
And MrWindyPuffer, the salesman showed an article from a newspaper
APR is a funny beast and you can get misleading/unhelpful results but its often a good starting point. But as someone said - the only safe way is to look at what the total loan cost is to you and compare that across quotes/options.
Sorry mate that is just wrong. The rate of interest in your second example is far higher. You can not seriously argue that the same total payments over half the time have the same rate of interest.
Your point about flat rate interest calculations being simple is correct. It is also one of the most misleading quotes invented by financial man and one of the reasons APR was introduced.
Sorry mate that is just wrong. The rate of interest in your second example is far higher. You can not seriously argue that the same total payments over half the time have the same rate of interest.
Your point about flat rate interest calculations being simple is correct. It is also one of the most misleading quotes invented by financial man and one of the reasons APR was introduced.
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IIRC that's why "they" wanted APR to be quoted as it gave the "real" cost. But APR can be calculated in so many different ways that it can be hard to compare two quotes if you only look at APR.
And MrWindyPuffer, the salesman showed an article from a newspaper
So its easy to be conned using finance then, especially if your financialy unaware
Glad I dont really do finance anymore
gsbiker
Registered user
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%
I think my rate is 13.9%. The main reason I went for the BMW finance was so that I could pay the monthly installments from my business account where as Tescos wouldn't allow that for a personal loan. Plus it was much more straight forward to deal with BMW direct rather than waiting for paper work, sending it off etc because by then I was already accepted by BMW. As it turns out the salesman got it wrong so I had to pay for my loan payments out of my personal account which was quite annoying. In hind-side the Tesco loan would have been the better way to go but I made a decision based on what I was told at the time.
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.
Not so easy these days as the Money laundering Regs prevent it. some places will not accept cash over £1000.
Try paying £12000 in cash .
Sounds ridiculous to me that you can't pay a 'mere' ten grand in cash to a vehicle dealer. If a person were buying one a week then fair enough, that is really suspicious and would surely alert the authorities to some form of money laundering. But for a one-off purchase ??? Can't you simply sign some form of 'disclaimer' at the dealership at the point of sale ?
I'm not rich BTW (actually I'm broke and unemployed at present but I'll bounce back soon enough) but I hate paying for credit. I despise paying any salesmen and bankers a commission 'fee' from my hard-earned and would rather go without and save the cash until I can afford said purchase.
No new toys for me for a while then.......
Sounds ridiculous to me that you can't pay a 'mere' ten grand in cash to a vehicle dealer. If a person were buying one a week then fair enough, that is really suspicious and would surely alert the authorities to some form of money laundering. But for a one-off purchase ??? Can't you simply sign some form of 'disclaimer' at the dealership at the point of sale ?
I'm not rich BTW (actually I'm broke and unemployed at present but I'll bounce back soon enough) but I hate paying for credit. I despise paying any salesmen and bankers a commission 'fee' from my hard-earned and would rather go without and save the cash until I can afford said purchase.
No new toys for me for a while then.......
Plenty of Pikeys with brand new cars like Mercs/Beemers and Landrovers
Bet they paid cash, so explain that little one
