[SpeedTrip]

Seems like a good time to ask people - whats the pro's & con's of settling up a 3 year BMW Finance agreement early ? (Taken out in Aug 2013)

Just concerned that any equity in my 530d may be hit hard if I let the deal run to full term .... then again I guess theres a penalty for early settlement ....

Obviously I'll need to ask them my outstanding balance, and get a part-exchange quote ... but any clues about the current F10/11 values and timing of an exchange ?

[HighlandPete]

Originally Posted by SpeedTrip

Seems like a good time to ask people - whats the pro's & con's of settling up a 3 year BMW Finance agreement early ? (Taken out in Aug 2013)

Just concerned that any equity in my 530d may be hit hard if I let the deal run to full term .... then again I guess theres a penalty for early settlement ....

Obviously I'll need to ask them my outstanding balance, and get a part-exchange quote ... but any clues about the current F10/11 values and timing of an exchange ?

My questions are, if you settle early is that to get another car? If so, are you leaving off driving a 5-series until the new model appears? Driving some sort of 'cheapo' with low depreciation in between decent cars. If not, where does the logic to settle early help you driving the current car, until the new model?

HighlandPete

[E60MKF]

In my experience I haven't been hit too hard by new models... I've been financing for over 15 years- about 14 cars now.
Just be patient and wait until you no longer have a negative equity and the discounts kick in. For me this has meant changing my cars every 2/3 years to now changing my car every 4/5years (the wifes car somehow is able to been changed within 2/3 years still). My E60 was perfect until the day I handed it in so there was no rush to change it apart from having something new and the financial aspect was more important than having something new.

The finance manager at the dealership suggested that you usually come out of negative equity around the 26-27 month mark of a 4 year deal

[SpeedTrip]

Thanks all - will start tracking the equity status as suggested.

If not, where does the logic to settle early help you driving the current car, until the new model?

The point is that I wanted to get some insight into how much the new (2016?) Five's arrival will hit the value of my 2013 car.

I had a Dec 2011 E91 which got hit by the F30/31 models 2012/13 arrival when I bought this F11 in Aug13, so wanted to avoid a repeat !

[HighlandPete]

Originally Posted by SpeedTrip

Thanks all - will start tracking the equity status as suggested.


The point is that I wanted to get some insight into how much the new (2016?) Five's arrival will hit the value of my 2013 car.

I had a Dec 2011 E91 which got hit by the F30/31 models 2012/13 arrival when I bought this F11 in Aug13, so wanted to avoid a repeat !

Am I missing something here, but how will tracking the equity status help you financially, if you don't sell the car and get out of the model to model chain? Settling doesn't change the car market, as new models always hit the old one, so do LCI models these days. We are all in that loop to some degree.

You have a GFV don't you? Anything in addition when you trade is a bonus isn't it. I'd imagine BMW finance already build in some allowance for future model to model depreciation, when setting residual values.

Is your intention to get into one of the last of the old models, or into one of the first new models? That is where I see timing and discounts can make a real difference to ownership costs.

I notice you only kept the 3-series for less than 2-years, not typically good news if you want to get the best value out of a car. The longer the ownership, normally the better it works out financially.

HighlandPete

[SpeedTrip]

Not sure why you are being so vehement about this topic ?!

Yes, you do seem to be missing something .... as said, I'm trying to decide the best time to settle up to minimise upgrade costs - with an eye of the impact of a new Model on residuals, given past experience.

You have a GFV don't you? Anything in addition when you trade is a bonus isn't it. I'd imagine BMW finance already build in some allowance for future model to model depreciation, when setting residual values.

Yes, but still worth exploring options.

Other responses seem to relate to this OK .....

[HighlandPete]

Originally Posted by SpeedTrip

Not sure why you are being so vehement about this topic ?!

Yes, you do seem to be missing something .... as said, I'm trying to decide the best time to settle up to minimise upgrade costs - with an eye of the impact of a new Model on residuals, given past experience.


Yes, but still worth exploring options.

Other responses seem to relate to this OK .....

I apologise if my comments are coming across the wrong way, I assure you it is not my intention. One of the problems with posts on forums. If we were speaking face to face you would know I'm genuinely interested in the thought process.

I sense you got stung on the sale of the 3-series, due to an early trade-in, and recognise it is a minefield in gauging the time to strike for the best deal.

I'm just curious how tracking the settlement, (not just yourself but others as well) really helps on striking the best deal.

Guys with negative equity can still get good deals, there are so many factors which get us to an acceptable "cost of change".

In your first post you asked about the best time for a settlement. But also about the best time to change.

Originally Posted by SpeedTrip

Seems like a good time to ask people - whats the pro's & con's of settling up a 3 year BMW Finance agreement early ? (Taken out in Aug 2013)

... but any clues about the current F10/11 values and timing of an exchange ?

Hence the questions, are you wanting to settle, period? Or settle and change early, meaning into the existing model again, or are you wanting to change into the new model? To me, there is a lot of difference in the above, both for timing and how to get the best deals.

Sorry if I've come across as not helping, these sort of discussions are best over a pint.

HighlandPete

[SpeedTrip]

No worries Pete.

I was certainly irked at the figures offered for the E91 back in 2013 - I had put less than 6K miles on it in 18months, and the reason for its low residual was stated as the new F30/31 having impacted values .... and of course I hadnt made much of a dent in the Finance deal, so the settlement figure also hit me.

So with little or no equity in the deal to upgrade to the 530d, I yet again had to pay a bigger deposit than I wanted to keep the monthly payments achievable ...

So the purpose of this query is to try & get a general feel of the benefit/impact of settling before 3 years is complete - with the knowledge that my deal would end as the new Five was announced ...and deja vu for impacted residuals ... incidentally, the GFV doesnt apply if the Finance hasnt gone full term - one is offered a buy-in figure by the Dealer, and a Settlement figure by BMW FS..... so you know where you are going forward into a new deal and have to do your best negotiating to keep the Monthly payments as low as poss, and avoid feeding too much more cash into the deal ...

There again, with a 5 to 6 year Model cycle, and the typical length of a Finance Deal, I guess its inevitable ....

As to my plan (a grandiose word - LOL) I do find the 530d a bit big for me, and now only having one dog, I dont need the capacity either ... so I wont be going for another Five ..

So overall, dunno ! Suspect I may as well just let it roll on, but wondered if anyone had a feel for the Finances better than me !

[MalithS]

If you are badly in negative equity cant you always walk away from the PCP as long as you have paid off 50% of the total amount owed? So at 3 years if you want to get out and you still owe more than the car it should work in your favour?

[HighlandPete]

Originally Posted by SpeedTrip

...As to my plan (a grandiose word - LOL) I do find the 530d a bit big for me, and now only having one dog, I dont need the capacity either ... so I wont be going for another Five ..

So overall, dunno ! Suspect I may as well just let it roll on, but wondered if anyone had a feel for the Finances better than me !

At least you have a bit of time to see how the market pans out before the new 5-series range.

You have a few more options than some, who just want to move to the next model, as you are likely going to a different range. Say it is another 3-series, the LCI will be around and probably running decent discounts ahead of the time the new Five comes on the scene, and really starts hitting your current car.

As you are not tied to a specific date for a new model, timing with dealers, like end of the month/quarter will give you more buying power.

Obviously timing will depend on how much equity you have in the car, (that will partly depend on the amount of deposit you put in), but dealers can work around that anyway, particularly if they are keen to get a deal to help them meet targets.

I'm aware of users who keep their dealer informed of their future intentions. Often get offered exceptional deals to move on, when they are short of a sale to meet a target. The dealer may have a customer looking for your model, and/or a chance to move a car at the right time for them. A bit of "you scratch my back...."

HighlandPete

[SpeedTrip]

Interesting points .... as it happens just been invited to a Bollox-sounding 'VIP' event at my Dealers for early March, so may chat to them along those lines ..

Many thx !

[Piers]

IME the easiest way to lose money, is to keeping buying and selling. Over time, it settles down, but it the buy/sell premium either way that kills you.