Extending PCP term?
Discussion
Our G22 420i is on a PCP and approaching the end of its 4 year term.
Having looked at the current prices for the 4 series, and interest rates being where they are now, there's no way we could afford to replace it with anything as nicely-specced, so we've been thinking of keeping hold of it.
The dealership has been in contact offering the option of refinancing on a further 3 year PCP term. The idea is pretty appealing because the monthly cost would be massively lower, and I don't have to find the money to buy the car.
Anyone done this? What are the pros and cons? (for example, I wonder if the (optional) final payment will be closer to, or less than, it's value at the end of the term than was the case on the original term (where they want you to end up with the deposit for a new one)).
Having looked at the current prices for the 4 series, and interest rates being where they are now, there's no way we could afford to replace it with anything as nicely-specced, so we've been thinking of keeping hold of it.
The dealership has been in contact offering the option of refinancing on a further 3 year PCP term. The idea is pretty appealing because the monthly cost would be massively lower, and I don't have to find the money to buy the car.
Anyone done this? What are the pros and cons? (for example, I wonder if the (optional) final payment will be closer to, or less than, it's value at the end of the term than was the case on the original term (where they want you to end up with the deposit for a new one)).
gregch said:
Our G22 420i is on a PCP and approaching the end of its 4 year term.
Having looked at the current prices for the 4 series, and interest rates being where they are now, there's no way we could afford to replace it with anything as nicely-specced, so we've been thinking of keeping hold of it.
The dealership has been in contact offering the option of refinancing on a further 3 year PCP term. The idea is pretty appealing because the monthly cost would be massively lower, and I don't have to find the money to buy the car.
Anyone done this? What are the pros and cons? (for example, I wonder if the (optional) final payment will be closer to, or less than, it's value at the end of the term than was the case on the original term (where they want you to end up with the deposit for a new one)).
Never done this, I've ended up getting a loan to cover the balloon previously which then gave the flexibility to sell the car at any point, interest rates are high now so not sure if that would be an option also.Having looked at the current prices for the 4 series, and interest rates being where they are now, there's no way we could afford to replace it with anything as nicely-specced, so we've been thinking of keeping hold of it.
The dealership has been in contact offering the option of refinancing on a further 3 year PCP term. The idea is pretty appealing because the monthly cost would be massively lower, and I don't have to find the money to buy the car.
Anyone done this? What are the pros and cons? (for example, I wonder if the (optional) final payment will be closer to, or less than, it's value at the end of the term than was the case on the original term (where they want you to end up with the deposit for a new one)).
Do you have any kind of service plan, warranty, will that cover an additional 3 years? Is there a big service looming, i.e. cambelt, what about reliability of a 7 year old 4 series etc. MOT's any current advisories that could become issues over the next 3 years.
I guess what I am saying is the monthly PCP costs could be lower, but you may end up spending the same/more to keep the car on the road over that period.
Then in 3 years time what do you want to do then, buy the car outright as the balloon should be less or look at another PCP deal on a new car, but you run the risk of being in the exact same position you are now. Maybe if you are lucky and the money saved over the 3 years and you have no issues with the car could go against a deposit for the next car.
As an example, my wife had a lease on a Jeep Wrangler, it was an amazing deal at the time just as the latest Wrangler came out in 2020. She had always wanted one and it was kind of a no brainer. It was only a 2 year lease but as we approached the end of the term she had the option of another 2 years albeit slightly more expensive as the retail price had gone up dramatically. She continued for the next 2 years with the hope she could buy at the end of the 2nd term. Unfortunately 1/2 way through the 2nd term every door started to corrode (well documented issue now) and the complete shambles that ensued trying to get Jeep to acknowledge the issue meant at the end of the lease it was handed back (all the corrosion remained).
if the corrosion has been addressed I have no doubt she would have bought the car, she still misses it today.
Gary C said:
Ive done this with a couple of cars but just gone onto straightforward finance and still have on 10 years later 
^^^^ This is the answer don't take another PCP just take out a loan for the outstanding amount
Compare a 5 year loan over the 3 year pcp and I can guarantee you'll have paid less and owe less at the end of the pcp term and you'll own the car outright from the moment you pay off the current PCP
Have bought outright at the end of a PCP in the past, with a Jag (well, an x-type) that we kept for a few years after - but it was absolutely falling apart at that point and was a real pain to offload. I get that hopefully a 4er isn't that, but still.
Whatever happens I'd have the BMW warranty (as I do now in year 4). The cost of that plus the PCP payments would still be a fair bit less than the current PCP payments, so it's tempting to have the low monthly cost for 3 years.
I totally get that doing a further PCP means I'll own nothing at the end, unless I wanted to pay to buy it at that point, which I wouldn't. But if the car turns out to be worth less than expected at the 7 years point, it would be the finance company's risk rather than me having to find a buyer - and I'm conscious that in 3 years' time the neue klasse 4er will be out and my 420i might be looking a bit old fashioned.
I guess if I had the capital spare to buy outright it's a no brainer, I'd just buy it, but there's other demands on money right now so those low, low monthlies are very tempting.
Whatever happens I'd have the BMW warranty (as I do now in year 4). The cost of that plus the PCP payments would still be a fair bit less than the current PCP payments, so it's tempting to have the low monthly cost for 3 years.
I totally get that doing a further PCP means I'll own nothing at the end, unless I wanted to pay to buy it at that point, which I wouldn't. But if the car turns out to be worth less than expected at the 7 years point, it would be the finance company's risk rather than me having to find a buyer - and I'm conscious that in 3 years' time the neue klasse 4er will be out and my 420i might be looking a bit old fashioned.
I guess if I had the capital spare to buy outright it's a no brainer, I'd just buy it, but there's other demands on money right now so those low, low monthlies are very tempting.
Gassing Station | BMW General | Top of Page | What's New | My Stuff