[philreid]

I've got a 2007 E90 325i, currently on BMW Select at 10% APR. I'm conscious that I'm getting shafted so am considering paying off the finance with a M&S car loan (6.0%).

The BMW Select plan is up in Jan 2014, so just under two years left. I was thinking of taking a M&S loan over two years which would save me £50 a month and leave a balloon payment of £5750 at the end.

Do you think this is a reasonable approach? I want to avoid taking too long a loan period since the car is already quite old, and I know I'm effectively going to lose the guaranteed future value in favour of a lower finance rate.

What would you do? Thanks guys.

[philreid]

Lots of readers, but nobody has any thoughts on it. Oh well, not to worry

[TripleD]

Well 2 years into it, it's a tough choice.
What's your plan for the car? to keep it or move on?

The 6% is only valid for £7500 - £14999 loans I think £15k-£25k is then 9.9% APR.

[DanTheManc]

I bought my car using an M&S car loan plan. I got it at 6% but you need to be aware that you may not get offered 6% because it's different for each applicant.

Paying off finance with finance sounds wrong but if it works out cheaper overall then why not? If its only a cheaper monthly payment but higher overall due to the balloon payment then don't bother.

[philreid]

Thanks for the info.

I do plan to keep the car for a year or two, yeah - I'm just keen to reduce the finance costs and I think it might be worth taking the risk on the future value of the car and ditch the BMW Select.

Thing is, their GFV is £6,373 for February 2014 which seems quite high.

I thought of getting a newer car so I went to a dealership - they were offering me what seemed like a decent deal on a 61 reg pre-registered 3 series, but their trade in price for my car was so dire that idea was swiftly sunk!

[craneboy]

Have a chat with Kam @

http://www.mhcfinance.co.uk/

They look after the Range Rover Sport guy's very well.
Could be of some help.

HTH

Andy

[dobbo99]

Originally Posted by philreid

Thanks for the info.

I do plan to keep the car for a year or two, yeah - I'm just keen to reduce the finance costs and I think it might be worth taking the risk on the future value of the car and ditch the BMW Select.

Thing is, their GFV is £6,373 for February 2014 which seems quite high.

I thought of getting a newer car so I went to a dealership - they were offering me what seemed like a decent deal on a 61 reg pre-registered 3 series, but their trade in price for my car was so dire that idea was swiftly sunk!

surely the higher GFV from BMW is negated by the fact you pay more over the remaining monthly payments at 10%??

my view would be that your better served with a lower monthly payment for the next 2 years, and ending up with a car that still holds a level of equity that you can use to trade in against anything you want.

[philreid]

Thanks a lot guys, I think it's true that a lower monthly payment is better which will have a lower balloon payment left than the GFV - hopefully the car should hold its value well enough to match that or sell for a bit more at the end of the 2 years.

Think I'll try applying for the M&S loan

[dobbo99]

ive just looked at the m&s thing myself, as Id not seen it before, bit of a no brainer really, as it give you the cash to barter with then.
i always feel that its a bit one sided when it comes to negotiating a price, and then finance, with dealers.

[mgarvey]

The only downside to paying off a loan some way into it is that many loans are somewhat front loaded in terms of interest, so in the later years you are paying off more capital each month. That said, if 2 years payments plus balloon with BMW is more than 2 years plus balloon with M&S it really is a no-brainer!

I've found BMW Financial Services are pretty good about providing settlement figures and settling early, so you shouldn't have too many problems.