[badgerbrock72]

Evening all,

thinking of potentially making the move to an F30 340i on a PCP whilst the decent deals are still available, however - never having taken a PCP before I thought i'd ask you guys and girls a couple of questions to set my mind straight...

I have a decent (good) credit score, but a chunky mortgage, no c.cards etc

Between the wife and I we bring in a decent wage.

If i were to go for the car i'd like (and why wouldnt i!!) then after discount it would be virtually a full years salary for me, before deductions.

Does anyone know how BMWFS would view this, as I believe (??) with a PCP the whole amount of the car (including the GFV) goes on credit file even though you may never buy it at the end.

Could afford the payments, but just not sure how the finance people would view car finance that is probably 95% of my annual income.

dont get me wrong, in terms of joint income its totally insignificant, but if they based it on my income alone....

Cheers for any advice, and im probably worrying about nothing as usual!

Garry

[Rbrown]

I'm not sure I have ever been asked my salary by BMW Finance? I wouldnt be comfortable disclosing this to any salespeople.

In which case - dont worry! I dont think this is an issue - as long as you keep repaying the papyments each month, everything will be fine!

[tinytrevor]

Not sure how accurate this is now, but was told you wouldn't get a finance only if you had some serious problems with your finance - a default, ccj etc.
Otherwise they are desperate to shift a car and make you their slave on a PCP deal.
So probably nothing to worry about just as you said.

[Mark1966]

Originally Posted by badgerbrock72

Evening all,

thinking of potentially making the move to an F30 340i on a PCP whilst the decent deals are still available, however - never having taken a PCP before I thought i'd ask you guys and girls a couple of questions to set my mind straight...

I have a decent (good) credit score, but a chunky mortgage, no c.cards etc

Between the wife and I we bring in a decent wage.

If i were to go for the car i'd like (and why wouldnt i!!) then after discount it would be virtually a full years salary for me, before deductions.

Does anyone know how BMWFS would view this, as I believe (??) with a PCP the whole amount of the car (including the GFV) goes on credit file even though you may never buy it at the end.

Could afford the payments, but just not sure how the finance people would view car finance that is probably 95% of my annual income.

dont get me wrong, in terms of joint income its totally insignificant, but if they based it on my income alone....

Cheers for any advice, and im probably worrying about nothing as usual!

Garry

Crikey I would think long and hard on this, there was a post recently that covered salary ratio to amount spent on a car. 95% of annual income is one hell of a financial commitment to just effectively get from A to B.

BMW dont ask me for income level and I would tell them to F off if they did but I have been purchasing cars from them over many years.

Good luck.

[WeaverBeaver]

Originally Posted by Rbrown

I'm not sure I have ever been asked my salary by BMW Finance? I wouldnt be comfortable disclosing this to any salespeople.

In which case - dont worry! I dont think this is an issue - as long as you keep repaying the papyments each month, everything will be fine!

Not strictly true - to be proposed for BMW FS agreement you have to disclose gross salary and other income such as bonus.

However, as you say if you get accepted and make the payments regularly then your credit score will be fine.

It might just mean your capacity for any future debt could be diminished but if you have mortgage and car then anything else likely to be small I guess?

[Mark1966]

Originally Posted by WeaverBeaver

Not strictly true - to be proposed for BMW FS agreement you have to disclose gross salary and other income such as bonus.

However, as you say if you get accepted and make the payments regularly then your credit score will be fine.

It might just mean your capacity for any future debt could be diminished but if you have mortgage and car then anything else likely to be small I guess?

Well I have certainly haven't by BMW, Merc, Porsche etc ever.

I suspect if your credit score is not 'tip top' they may ask but it is not compulsory.

[WeaverBeaver]

Originally Posted by Mark1966

Crikey I would think long and hard on this, there was a post recently that covered salary ratio to amount spent on a car. 95% of annual income is one hell of a financial commitment to just effectively get from A to B.

BMW dont ask me for income level and I would tell them to F off if they did but I have been purchasing cars from them over many years.

Good luck.

He means value of the car as a percentage of gross annual salary rather than monthly payment which is very different. I would imagine many people in similar boat

[WeaverBeaver]

Originally Posted by Mark1966

Well I have certainly haven't by BMW, Merc, Porsche etc ever.

I suspect if your credit score is not 'tip top' they may ask but it is not compulsory.

Nope - my credit score is squeaky clean, but was asked to fill in a standard BMW form right at the outset.

[Mark1966]

Originally Posted by WeaverBeaver

He means value of the car as a percentage of gross annual salary rather than monthly payment which is very different. I would imagine many people in similar boat

Yes I know but 95% of gross annual salary on a car is a lot in my opinion.

It is slightly different than buying a Porsche for £100,000 if your salary is £100,000 as that would leave plenty of meat but at the £45k level surely that would be a bit tight.

Anyway ETTO, but I certainly wouldn't be making that sort of financial commitment if I was earning circa £45k.

[Mark1966]

Originally Posted by WeaverBeaver

Nope - my credit score is squeaky clean, but was asked to fill in a standard BMW form right at the outset.

Im not saying your credit score isnt squeaky clean, I am saying that not everyone has to fill out a financial means form. I am not convinced alot of people would actually do it if they were asked.
Two people know my financial position and that is myself and my Accountant, not even the wife gets a look in so I am damn sure I am not going to tell BMW's latest and greatest Sales Bod

[subsy]

Originally Posted by Mark1966

Yes I know but 95% of gross annual salary on a car is a lot in my opinion.

It is slightly different than buying a Porsche for £100,000 if your salary is £100,000 as that would leave plenty of meat but at the £45k level surely that would be a bit tight.

Anyway ETTO, but I certainly wouldn't be making that sort of financial commitment if I was earning circa £45k.

Tend to agree with Mark but we don't know the full story - maybe OPs wife pays all the bills and the mortgage is only very small so ~450 per month is only 30% of disposable income etc etc

[Mark1966]

Originally Posted by subsy

Tend to agree with Mark but we don't know the full story - maybe OPs wife pays all the bills and the mortgage is only very small so ~450 per month is only 30% of disposable income etc etc

Very true, I wish I had a wife that earned instead of spends

[tinytrevor]

Originally Posted by Mark1966

Very true, I wish I had a wife that earned instead of spends

Well, trade her in and get a more efficient model

[subsy]

Originally Posted by tinytrevor

Well, trade her in and get a more efficient model

There's some good PCP deals on hanoibrides dot com at the moment

[badgerbrock72]

Thanks for all the responses so far,

Yep I realise it's a bit mad to be thinking of committing to a 35k ish car but really I'd just be chucking in a 5k or so deposit then around 400/month so on our combined income that's well do-able but was just worried how the finance people might view it.

[badgerbrock72]

Least I hope it's 400 or so a month if it's much more than that I'd reconsider anyhow!!

[WeaverBeaver]

Originally Posted by Mark1966

Yes I know but 95% of gross annual salary on a car is a lot in my opinion.

It is slightly different than buying a Porsche for £100,000 if your salary is £100,000 as that would leave plenty of meat but at the £45k level surely that would be a bit tight.

Anyway ETTO, but I certainly wouldn't be making that sort of financial commitment if I was earning circa £45k.

I'm not for a second trying to second guess or speculate on the OP's financial position here but just thinking about the wider public I would have thought there are many thousands of people on PCP deals in the 20-40k car value region with gross salaries around the same level, it doesn't mean it's unaffordable or irresponsible of those people, but depends on other commitments and circumstances etc.

Remember that when you take the GFV into account and the depreciation is higher on more expensive vehicles in general, and also those earning more will pay more tax thus net is lower proportion of earnings, the 'effective' level of affordability can be worse higher up the scale you go. But as said, all down to an individual's circumstances.

I'd be interested to know - of all those who have ordered cars on this forum what percentage the purchase price has ended up being of total income.....

[....,,,,..,,..]

Originally Posted by badgerbrock72

Thanks for all the responses so far,

Yep I realise it's a bit mad to be thinking of committing to a 35k ish car but really I'd just be chucking in a 5k or so deposit then around 400/month so on our combined income that's well do-able but was just worried how the finance people might view it.

Things to consider.

How much extra financial stress is a BMW worth?

What costs (monthly) do other manufacturers come in at, some have high Apr.

Is the extra finance worth cancelling those trips to cinema, suprise presents, meals out?

Could you finance the car if mortgage rates did move up following an exit from Europe (likely not happen, however you have to think of these things).

[Mark1966]

Originally Posted by WeaverBeaver

I'm not for a second trying to second guess or speculate on the OP's financial position here but just thinking about the wider public I would have thought there are many thousands of people on PCP deals in the 20-40k car value region with gross salaries around the same level, it doesn't mean it's unaffordable or irresponsible of those people, but depends on other commitments and circumstances etc.

Remember that when you take the GFV into account and the depreciation is higher on more expensive vehicles in general, and also those earning more will pay more tax thus net is lower proportion of earnings, the 'effective' level of affordability can be worse higher up the scale you go. But as said, all down to an individual's circumstances.

I'd be interested to know - of all those who have ordered cars on this forum what percentage the purchase price has ended up being of total income.....

I dont disagree and if the OPs wife is on a good whack and it is there only car then it is more financially prudent.

Would I do it, no I wouldn't, I love my cars but if the wife didn't get her mandatory holidays, dinners out, clothes, furnishings, jewelery etc etc then I would probably end up living in the car

I think the more you earn the easier it gets to support an expensive car in ratio to salary. Lets say you earn £100k a year, that would mean net of approx £5.5k per month and your £100,000 grand car is going to cost you approx £1.5k per month so that would leave a healthy £4k to live on a month.

Now if we take a £30k salary which is approx £2k net per month and your £30k car is costing you £400 per month that would leave you with approx £1.6k to live on a month so you could really miss that extra £300 per month that you would have had if you bought the Fiesta, Fabia etc.

ETTO

[....,,,,..,,..]

Originally Posted by Mark1966

I dont disagree and if the OPs wife is on a good whack and it is there only car then it is more financially prudent.

Would I do it, no I wouldn't, I love my cars but if the wife didn't get her mandatory holidays, dinners out, clothes, furnishings, jewelery etc etc then I would probably end up living in the car

I think the more you earn the easier it gets to support an expensive car in ratio to salary. Lets say you earn £100k a year, that would mean net of approx £5.5k per month and your £100,000 grand car is going to cost you approx £1.5k per month so that would leave a healthy £4k to live on a month.

Now if we take a £30k salary which is approx £2k net per month and your £30k car is costing you £400 per month that would leave you with approx £1.6k to live on a month so you could really miss that extra £300 per month that you would have had if you bought the Fiesta, Fabia etc.

ETTO

Is that 1.6k a month with everything off as in cash or stuff to come off?

One is hard the other bloody hard.

[WeaverBeaver]

Originally Posted by Mark1966

I dont disagree and if the OPs wife is on a good whack and it is there only car then it is more financially prudent.

Would I do it, no I wouldn't, I love my cars but if the wife didn't get her mandatory holidays, dinners out, clothes, furnishings, jewelery etc etc then I would probably end up living in the car

I think the more you earn the easier it gets to support an expensive car in ratio to salary. Lets say you earn £100k a year, that would mean net of approx £5.5k per month and your £100,000 grand car is going to cost you approx £1.5k per month so that would leave a healthy £4k to live on a month.

Now if we take a £30k salary which is approx £2k net per month and your £30k car is costing you £400 per month that would leave you with approx £1.6k to live on a month so you could really miss that extra £300 per month that you would have had if you bought the Fiesta, Fabia etc.

ETTO

Yes agree with all the above.

My main point was referring back to the original thread on car payment vs. net salary, and 400 over 2k at 20% was not shockingly high compared to some answers on that thread if I recall correctly, especially if on a joint income and rest of life expenses such as mortgage etc are already appropriately calibrated to income level. The monthly cash flow is a better indicator of affordability than the total value of the car IMO.

I also wouldn't do it myself but that's because I've got a family to support all on my income and all bills, and also wanting money for savings, holidays, jewellery etc like you say. So for me 500 quid is my monthly self imposed limit which feels easily doable.

[workshybum]

I don't think I was asked my salary by BMW but we were by Ford for my wife's car. We even had to provide evidence of affordability for them, whereas with BMW I was approved almost instantly. It may have something to do with my wife being on maternity, but even so it was quite easily affordable for us and seemed a real pain in the hole having to justify everything.

Generally, with PCP the loan is secured on the car, so if you don't pay they take it back. Tends to make getting credit a little easier.

Also, just on a side note - having no credit cards is actually detrimental to your credit score, you should aim to keep one account open - even if you don't use it, it's still viewed as a positive.