BMW Finance - Blindingly expensive !

[Pathologic]

Credit card safety

It is worth pointing out to the cash lovers among you that if you pay for anything over a hundred quid with your credit card the crdit card company is jointly responsible with the dealer for supplying your goods (reference anybody?). If the dealer goes under in these difficult times you can claim of VISA or Mastercard and get your money back. If you pay cash and your bike is still on order you will find yourself at the back of the queue of creditors.

Of course you should never pay interest on your credit card, but it can give you a breathing space whilst you sort out better finance. Almost any loan is better than credit card debt. Remeber, you are not a philanthropic organisation and they are NOT a worthy cause!

Just my five pennth.

Regards,

Path.

 

[Paul Wakefield]

Can't you simply sign some form of 'disclaimer' at the dealership at the point of sale ?

No - any business prepared to accept over €15k (or equivalent) in cash has to register with HMRC and apply full anti-money laundering procedures. Consequently many businesses do not register and do not accept amounts over about £9k (which was then felt to be a safe exchange rate cf the euro); to do so would be a criminal offence. A disclaimer would not work.

This is is at the sensible end of anti-money laundering legislation. You should see some of the stuff that accountants/lawyers, etc have to do and have to report. Unpaid grasses we are.

But you can still have your toys - pay by cheque. Plenty of free banking out there still (surprisingly) if you're keeping your account in credit so no need to pay the bankers and even a derisory rate of interest is better than keeping it under the mattress.

 

[Owen Snell]

.....But you can still have your toys - pay by cheque. Plenty of free banking out there still (surprisingly) if you're keeping your account in credit so no need to pay the bankers and even a derisory rate of interest is better than keeping it under the mattress.

Surely cheque is the riskiest option - you have to pay them and wait for it to clear with no recompense if something goes wrong. I paid for my bike and my last car with a debit card at the dealer. That way, the keys are on the desk with you when you are paying, so you take possession immediately that you have paid.

On interest rates, both APR and flat rates can be confusing (deliberately, IMO). It is not just a matter of comparing rates, but also comparing best discounts without the finance deals and self financing. 0% is just a discount wrapped up differently. Total amount paid is the key point here. Dealer finance make big margins because it is easy for the customer - easy but expensive. Also remember, on a PCP you are paying interest on the whole amount including the balloon - this means interest on a PCP will be more than on a straight loan, even if the monthly payments are lower.

 

[sandyB]

Earlier this year I purchased an 06 GS1200 (only 4,000 miles)with full luggage and all the toys, instead of going for a new one and having to pay for the extras. The deal from BMW was as good as anywhere else although I did haggle a bit and they offered dealer finance protection at a fraction of the cost that BMW offered.

But this was just before the melt down of finance bussiness.

 

[Marjorie Proops]

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 accept that it is the way it is done by countless salesmen every day, I also accept that you do it (in good faith) no differently. But if you borrow £1,000, start paying it back in equal monthly instalments from month 1, and finally pay £50 interest - that is not 5% flat rate interest no matter how much you would like it to be .
(Yes, I have a Consumer Credit Licence too).

 

[LittleMark]

get a 0% credit card and use that.

Bought mine with £5k on the debit card, £5k on a new credit card (0% on purchases for 12months) and a trade in of me old Bandit.

The way I figure it, after 12months I can transfer whatever I still owe on the creidt card to a new credit card with 0% on balance transfers for 12 months.
That way I've essentially borrowed £5k from the credit card company with 0% interest.... Hell of a lot better than a loan (ok, I'll probably get charged something for transfering the balance no doubt, but not much).
Mind you it's also the first credit card I've owned (I don't like debt) and at the moment it's nigh on impossible to find a credit card with 0% on purchases for 12 months!

 

[Paul Wakefield]

I paid for my bike and my last car with a debit card

Yep - debit card is good (that's how I paid last time). The point is there are still old and new fashioned ways of paying without having to use either credit or cash.

 

[WindyChuffer]

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...

...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...

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!

Like I said earlier, Motortrade salesmen aren't exactly known for their financial acumen... LoL

 

[Owen Snell]

Like I said earlier, Motortrade salesmen aren't exactly known for their financial acumen... LoL

I don't know, he sounds fairly astute to me. Tell the customer it's a 5% rate, which sounds good. Actual APR based on monthly interest calculation is getting on for 10%, which is much closer to the real cost of the loan. Not so good.

 

[teamwimp]

interesting thread - Tunnertuk expects us to believe him because he "does this every day" - when he clearly is mistaking what he says for fact.

Flat rate means nothing - ask any used car salesman
APR is the only way of comparing two offers BUT

each offer will have terms that may be more attractive to the customer

1. A lot of BMW owners use the BMW finance deal because they get to change their bike evry two years without large capital outlay every two years - i.e. it's easier and their partner may not complain

2. the actual interest paid is based on how much and for how long (at the APR) and some on fixed incomes will find a longer loan is more affordable on a month to month basis even though it's more expensive overall

3. The dealership makes money out of finance and so may be prepared to be a little kinder in tems of accessories/price than otherwise

4. Nobody takes serious money in actual cash any more (anti money laundering has taken care of that) when we talk about cash we actually mean a debit card and direct transfer from your bank to the dealer's bank.


5. finance deals appear to be complex because they are very tuneable

purchase price, deposit, rate, length of agreement, residual value all have an effect but you can work it all out with a spreadsheet or a claculator (but you may need some paper as well)

6. Be aware of the fact that the credit company charge fees (over and above the interest rate)

 

[(RIP) Tunneruk]

I accept that it is the way it is done by countless salesmen every day, I also accept that you do it (in good faith) no differently. But if you borrow £1,000, start paying it back in equal monthly instalments from month 1, and finally pay £50 interest - that is not 5% flat rate interest no matter how much you would like it to be .
(Yes, I have a Consumer Credit Licence too).

You should be ambarassed to admit that you have a 'Consumer Credit Licence' given your obvious lack of understanding of finance agreements.

"There are those in life that know they don't know, There are also those that don't know they don't know"

With respect Marj, You fall into the latter!

 

[Paul Wakefield]

Flat rate is what you get paid on your savings

I wish.

 

[Marjorie Proops]

You should be ambarassed to admit that you have a 'Consumer Credit Licence' given your obvious lack of understanding of finance agreements.

"There are those in life that know they don't know, There are also those that don't know they don't know"

With respect Marj, You fall into the latter!

There are those in life that know that 'embarrassed' starts with an 'e' not an 'a'.

There are those in life that don't bother with deals less than £1mm (Super yacht sales used to be my thing when I last worked).

There are those that, having done the above for many years for others, don't need to do either salesman jobs or finance.


But what do I know?

Take care matey,

 

[(RIP) Tunneruk]

There are those in life that know that 'embarrassed' starts with an 'e' not an 'a'.

There are those in life that don't bother with deals less than £1mm (Super yacht sales used to be my thing when I last worked).

There are those that, having done the above for many years for others, don't need to do either salesman jobs or finance.


But what do I know?

Take care matey,

Last time I looked a spelling test (Or typo's) wasn't part of the 'Consumer Credit Act'

I have no interest (No punn intended) in what your job was, how much money you've earned, how super the product was or what job you do now that you don't have to slum it as a salesman anymore. If you have nothing constructive to contribute then I feel sorry for you that you have to mention how much better you are than the likes of myself.

I posted on this thread in order to maybe enlighten a few people on how vehicle finance works from someone who is 'currently' working in the industry (Not super Yachts)

However instead of reading what I have to say and trying to digest it (What reason on this earth would I have to lie about it??????) the general replies have been obtuse to say the least.
Out of curiosity I showed the thread to my work collegues (I work for one of the largest dealer groups in the uk) to see if I'd phrased anything that could be taken a different way. All 6 of the people I showed (Including our regional finance director) shook their heads at the lack of understanding showed within these posts.

All I'll say is good luck to you all, You obviously all know much more about it than I do ............ These will be my final words on the subject.

 

[Marjorie Proops]

Last time I looked a spelling test (Or typo's) wasn't part of the 'Consumer Credit Act'

I have no interest (No punn intended) in what your job was, how much money you've earned, how super the product was or what job you do now that you don't have to slum it as a salesman anymore. If you have nothing constructive to contribute then I feel sorry for you that you have to mention how much better you are than the likes of myself.

I posted on this thread in order to maybe enlighten a few people on how vehicle finance works from someone who is 'currently' working in the industry (Not super Yachts)

However instead of reading what I have to say and trying to digest it (What reason on this earth would I have to lie about it??????) the general replies have been obtuse to say the least.
Out of curiosity I showed the thread to my work collegues (I work for one of the largest dealer groups in the uk) to see if I'd phrased anything that could be taken a different way. All 6 of the people I showed (Including our regional finance director) shook their heads at the lack of understanding showed within these posts.

All I'll say is good luck to you all, You obviously all know much more about it than I do ............ These will be my final words on the subject.

Bearing in mind of course that your first (entirely non-condescending) post was:

You guys really need to educate yourselves on how vehicle finance works. APR is a totally different animal to a flat rate .....................


I now accept accept that your calculations are entirely correct except as you say 'mathematically'

(Hope that your regional finance director can do sums 'mathematically' - it would help)

My 'constructive contribution' (that you say I haven't made), is to point out to people that paying £50 interest on £1,000 when you start paying it back after only 4 weeks is not 5% - it's a 'saleman's 5%' - otherwise known as a 'con'.

 

[Paul Wakefield]

Out of curiosity I showed the thread to my work collegues (I work for one of the largest dealer groups in the uk) to see if I'd phrased anything that could be taken a different way. All 6 of the people I showed (Including our regional finance director) shook their heads at the lack of understanding showed within these posts.

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.

Those two quotes are mutually incompatible. If you and your team stand by it, I am shocked at how you must be misleading customers.

I would also be interested to know which of my posts showed any lack of understanding.

 

[Pukmeister]

A good bunfight going on here between our resident 'salesmen'. Very entertaining. Easy with those handbags fellas, all that financial cock waving is getting us nowhere !!

I guess the bottom line is that any form of finance/credit costs and no one (even the experts here) can agree on how much it is or how it is calculated. How reassuring is that for us trusting punters??

I'll be sticking to my usual purchasing methodology (as taught to me from a young age by my Dad, God rest his soul): Only spend what you can afford, and it's not what you have that is important, it's what you owe. Better keep the old 1200 for a few more years yet until I can pay for the Adventure version.

It's all this borrowing more that you can afford that got the world into this financial nightmare in the first place!! I don't see why I should now be made to suffer for other peoples selfish irresponsibility towards their personal finances and spending habits.

 

[karlp]

All I can say is:

One or both of these 'so called' financial wizards does not know his/their job(s) and it is peoole like these in the financial world that have got the country / world in the mess it is today.

Length of service means nothing - cos my old saying always seems appropiate.


'you may have been doing this for many years ( much longer than me) but it takes some people longer to learn than others'

 

[ianboydsnr]

Those two quotes are mutually incompatible. If you and your team stand by it, I am shocked at how you must be misleading customers.

I would also be interested to know which of my posts showed any lack of understanding.

I agree

Tunneruk, Theres the point, everything is there to mislead, its not just that dealership, its worldwide, APR figure was introduced to make the real cost of credit more clear, making the costs clear are not what salesmen want to see, they are not there to be the customers friend, they are in it for themselves, wether they are selling cars,mortgages, or anything else where credit is needed,if different companies use different methods of calculating the APR, then its done purely to mislead, treating us like we are stupid, then backing it up with the vultures in the same game, hardly proves you know more than the rest of us, that think everyone is a mug punter, you cant get away from the mathmatics, to do so is a lie.

 

[Robbo1200ADV]

At the NEC at the weekend and BMW were really trying to Flog their A NEW BMW EVERY 2 YEARS finance ,which is basically leasing ,costs but looks a good option as you know your monthly figure and when the warrenty runs out you get a fresh one. I did it with Harleys a few years ago and it worked,its just when you stop you have no Equity to put against another bike!