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  #1  
Old 03-02-2008, 08:10 AM
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Location: England
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nicke is on a distinguished road
Financing Purchase, New X5, UK

Hi,

I've ordered a X5 3SD M Sport and it's due for delivery around the first week of April.

I'm currently looking at how to finance the purchase.

BMW Select (PCP - guaranteed residual) has a flat rate of 5.7% - when I run the numbers through Excel (thank you MS for the PMT function) this equates to approx 12% APR. This is high given the base interest is less than 6%.

The business manager won't negotiate on the PCP rate since he claims any reduction in rate will mean their subsidising the finance.

He did mention though that the lease purchase rates are lower but hasn't got back to me yet.

Anyone know what the lease purchase rates run at? My understanding is the only difference between Select and Lease Purchase is that the residual isn't guaranteed with the latter.

Any other comments / experiences you've got with UK financing would also be most welcome.

Thanks
Nick
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  #2  
Old 03-02-2008, 09:22 AM
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adrian.b is on a distinguished road
I bought mine straight, using BMW finance.. Cant remember the rate now but it was a lot less them PCP.. I just couldnt get my head around PCP, yes the payments per month were less than straight finance, but I would have needed to find £18,000 or hand the car back at 4 years!! Just doesnt make sense to me.

As it is now I`m 2.6 months in to the finance and I owe £11,000 (got settlement figure the other day).. So I defintiely made the right choice.

However this time I`m thinking about leasing a car, because i`ve worked out that I have lost more buying this car than if I had leased it. I know the car isnt yours with a lease, but lets be realistic, is a car like this ever yours, do you keep it long enough to make it yours? Everybody`s different but I might bank the money I make from selling my car and lease the next one.
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X5 3.0D 2003
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  #3  
Old 03-03-2008, 11:38 AM
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nicke is on a distinguished road
I'll take a look at 'pure' leasing as well.

The concept of PCP is fairly simple from a maths perspective. A residual (future value) is set - this is obviously the balance you need to pay at the end of the term to keep the car. To simplify it there's two components to the finance, a repayment element and an interest only piece.

So if I purchase the car at 65k with a future value set of 30k - I will be financing 35k repayment (principal and interest) and interest only on the 30k.

This results in lower monthly payments but as you state you've still got a balance at the end of the term. This may be beneficial to some people as the balance may end up more than the car is worth in which case it can be returned to the dealer.

The appeal to me for PCP is that I'm not taking the full depreciation hit over 3 years when I plan on keeping the car for longer.

So does anyone know the lease purchase rates?
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  #4  
Old 03-03-2008, 11:53 AM
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i am a business manager here in the states, although with a different manufacturer. I believe what you are calling a pcp is actually a balloon payment that needs to be made at the end of the term. Generally not a good option. I just leased our X5. The lease factor was .00270. This equates to a 6.48% interest rate. (lease factor x 2400 = interest rate). This is usually set by the lease company (in this case BMW financial) but can be marked up by the dealer. The residual was 60% (set by Lease co. also) and not negotiable. I have been leasing for my past 3 cars. it makes sense for our family. we keep the mileage under 15k miles, and we always have a new car under factory warranty. If you drive a lot of miles or keep your cars forever then leasing doesn't make sense. Usually the residual value is higher than the steet value of the vehicle at the end of the lease. Thats when you know you made the right decision. There is also the option of a "one pay lease" basically makeing all of your payments up front for the term of the lease. You still pay interest but its usually less.
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Old 03-03-2008, 12:18 PM
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justinl is on a distinguished road
I'm also due to take delivery of an X5 sd M sport (late May) and will probably lease purchase. Try Kam (
[email protected]) - he's recommended over on the RR Sport forum.

The rates I've been quoted are at 7.5% APR (with an initial deposit and a balloon at the end).

Good luck!
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