[philreid]

Hey,

I've recently got a 57 reg 325i M Sport in Titanium Silver, which I absolutely effing love.

I financed the car through BMW on a 4 year Select deal, which of course guarantees the future value of the car at the end of the agreement.

But I was wondering if anybody has experience of a similar finance arrangement, but where you trade the car in after two years? Did you find that you were offered a decent price for your car in order to keep you as a customer? Or did they offer a knock-down price to either get the most cash out of you or make you wait until the end of your deal?

As I said, I love the car but four years is quite a long time to keep it, and I'd ideally like to trade in after two (in Feb 2012) but no way I'm doing it if I have to fork out a fortune to make up the difference.

Thanks

[Boyd1963]

Phil,

You will have to double check this but I was told by a Lexus finance adviser that you could hand a car back once you had paid off half the term. Apparently there is some sort of FSA legislation that allows this. He was trying to get the payments on a Lexus down to £320 a month and this is what he suggested I so. I don't know if it affects your credit rating but apparently it is legit.

Got that 2 year itch myself!!!!

Cheers

Boyd

[Boyd1963]

Here is some more reading

http://forums.moneysavingexpert.com/...d.php?t=193156

This seems to only apply to HP so is probably no use to you

[stupot]

BMW Select is flexible in that you can early settle at any point in the agreement, so changing mid term is an option.

You need 2 figures to work out if changing is a good idea. You need a settlement figure and a part exchange value.

The settlement figure is obtained by either the dealer or yourself phoning the finance company. They will let you know how much they require to settle your agreement off. This will be all your remaining payments plus the big final payment less a rebate of some interest.

The part exchange value is what your dealer is willing to give you for your car. The fact your current car is on BMW Select should have no effect on this figure.

Put both figures together. If your part ex figure is above your settlement all is good. You have equity to move on to your next car. If its negative you are not in a great position to change you should keep the car a bit longer. It is still possible to change though, you could put more money in to clear the negative, or you could carry it forward into the new loan, although you can’t carry it into another Select deal, BMW don’t allow this.

As a general rule of thumb we tend to find that the time to change is around ¾ of the way through till the end. At the 2 year stage I would expect you to a little negative, although will differ depending on the model/spec/original deposit.

Hope this helps.

Stu.

[philreid]

Thanks to both for your replies, both make perfect sense!

I'll check out the forum and will just see what happens at the two year point - though I'll probably be in no huge hurry to change at exactly two years, unless a good deal is available. I'd probably be happy enough to wait until 3 years if it meant I get a decent deal - four years just seems a bit long!

Also, I think Select is actually HP as opposed to a PCP, so perhaps the FSA regulation would be on my side there.

[stupot]

Originally Posted by philreid

Also, I think Select is actually HP as opposed to a PCP, so perhaps the FSA regulation would be on my side there.

FSA regulate the sale of insurance products, they have nothing to do with car finance.

Select is defo PCP, but PCP is just a form of HP, so anything that applies to HP applies to PCP too.

What the Lexus BM was referring to is your right to terminate an agreement once you have paid 1/2 the total amount payable. On a 48 month PCP this is normally around the 3 year point. In theory once you have passed this point you can hand it back to the finance company.

They don't like you doing this though and will chase you for excess miles/damage and will note on your credit file that you have done it. Whether the next lender takes any notice of this is up to them.

[creepy coupe]

Originally Posted by stupot

, you could put more money in to clear the negative

Can you do this with select Stu, because I was allowed to up my payments on straight finance?

[stupot]

Originally Posted by creepy coupe

Can you do this with select Stu, because I was allowed to up my payments on straight finance?

If going into another Select deal the negative would need to be clear. They will not pay a deal out if there is negative on the invoice. Other finance companies aren't so strict though and will let you add the negative on top and have a higher payment.

[creepy coupe]

Originally Posted by stupot

If going into another Select deal the negative would need to be clear. They will not pay a deal out if there is negative on the invoice. Other finance companies aren't so strict though and will let you add the negative on top and have a higher payment.

Ok ta.