[martin85]

The PCP deal on our X3 is up at the end of the year and BMW have been in contact with the usual sales pitch.

We are looking at all options before making a decision on what to do, one of which would be to refinance the balloon payment.

BMW have provided a quote for a 2 year option, with a balloon payment of ~85% of the existing balance to be financed.

Would you recommend any third party lenders to get some alternative quotes, or are they all likely to be similar offerings?

BMW are obviously keen to get us into a new model X3, but as the current one only has 45k miles and given current prices and interest rates, that seems pointless.

[Armaan]

What interest rate are they offering?

That'd be a useful starting point to see if anyone knows of something more competitive.

Armaan

[martin85]

Originally Posted by Armaan

What interest rate are they offering?

That'd be a useful starting point to see if anyone knows of something more competitive.

Armaan

Good point - 8.9%

I doubt I would see much better, though worth looking.

[Daftasabrush]

https://www.moneysavingexpert.com/lo...ersonal-loans/

That's what I did with the wife's car when PCP balloon was due.

[Tengocity]

As far as I know, other lenders are around high 7s/8s on HP with baloon rates, but that's changing all the time. They may not MGFVs though, so BMW does give you backstop if there is an almighty crash in values and you just want to offload.

If you can though, I'd recommend a Personal loan. Most folks should be able to get a 25k loan at 3%. The monthly payment might a bit higher, but you'll accrue equity in the car at a faster rate, and pay a lot less interest overall.

[Pond]

Agree with a personal loan. My bank (Barclays) keep sending me letters offering me them at around 3% for £15k ish. Always found it amusing that since I have cleared my debts, they really encourage me to get more.

[MashinBenzin]

Originally Posted by Tengocity

As far as I know, other lenders are around high 7s/8s on HP with baloon rates, but that's changing all the time. They may not MGFVs though, so BMW does give you backstop if there is an almighty crash in values and you just want to offload.

If you can though, I'd recommend a Personal loan. Most folks should be able to get a 25k loan at 3%. The monthly payment might a bit higher, but you'll accrue equity in the car at a faster rate, and pay a lot less interest overall.

+1

The reason the GFV is 85% of the current PCP GFV is that the car is worth way more. Your personal loan will be financing an asset that's worth more than the loan, just keep an eye on WBAC if you want to track that value over the length of the loan.

the fact that BMW FS are setting it at 85% today means they have reasonable confidence of it landing there or higher. They don't want to trade the profits from that 8.9% rate against the car being worth less than the GFV. I'd trust their homework on that.

[Kam05]

Did the same with my SQ5 last month which was on PCP, new car deals were out of my budget or the salesman was trying to sell me something I didn’t want.

Contact Oracle Car Finance, they have PCP or HP options to suit you.

BOE rate has gone up and will likely go up again over the next few months so you need to move quick to get a low APR.

[martin85]

Thanks for all the suggestions. I tried Oracle, but the minimum they finance is 25k and there is only 20k outstanding on the car - we are too cheap! It makes sense that BMW's offer is in the ball park of what anyone would offer.

Will definitely get some quotes on the personal loan front. I'm never keen on paying the balance out of savings, especially when the cost of borrowing is still pretty cheap in the grand scheme of things.

[gangzoom]

Originally Posted by martin85

I'm never keen on paying the balance out of savings, especially when the cost of borrowing is still pretty cheap in the grand scheme of things.

Inflation is at double digits, looks like interest rates for short term loans are getting there. If you have cash in the bank its literally dropping in value daily, if you have something substantial to spend it on, just spend it. Why would you borrow, pay interest, and watch inflation devalue the savings?

I wish we could spend the cash saving we have in the bank on the house, but just cannot do anything at the moment .

[SteveChester]

Originally Posted by martin85

Thanks for all the suggestions. I tried Oracle, but the minimum they finance is 25k and there is only 20k outstanding on the car - we are too cheap! It makes sense that BMW's offer is in the ball park of what anyone would offer.

Will definitely get some quotes on the personal loan front. I'm never keen on paying the balance out of savings, especially when the cost of borrowing is still pretty cheap in the grand scheme of things.

I think you have answered your own question - if you have savings then either pay it off or pay some of it off. Otherwise you'll have savings earning less interest than the interest you will pay on the loan…. You will SAVE money this way!

[AlRex]

My bank (Halifax) offer both HP and PCP. I have a HP for my wife’s and a PCP for mine through them. PCP rate was better than what BMW offered me, although GFV was lower, but I looked at it like I pay the same amount but owe less at the end.

[Scoobyd]

As some others have said consider using your savings, depending on how much you have. It's a loan to yourself rather than paying a loan and interest monthly. Then just pay yourself back into your savings each month until you're back to where you were. Most interest you'd be getting on instant access savings right now is 1.86% and you won't be finding a loan cheaper than that.

[KRS_SN]

8.9% on 20k over 24m is around £150per month. In interest. I'm not sure I'll part with that happily especially as the savings they hold is not giving me any money back. At 3.2%apr with tesco bank personal loan at £53pm its a different story of course. That extra 100pm can go into getting an extended warranty.

[robwils]

Wow a GFV of 85% ? Although I suppose that’s on a used car that should be on the flatter part of curve.

I was shocked the other day when I got a PCP quote for a highly specced 340i touring - 65K price and GFV of £23.5K after 4 years and 10K miles pa.

I guess there pushing you to pay more off the car to reduce there risk and exposure ….