BMW Select - what's the opinion of it?
Discussion
I was wandering around a main BMW dealer. as you do, and I came across a very nice Z4M Coupe. It was very tempting and on discussion with the salesman he tried to convince me that the best way to pay for it was with finance. He tried to convince me it was "cheaper than using cash". In the past I've always held off buying a car until I could pay for it with cash so I was pretty sceptical about his arguement. What's the general feeling on here about using BMW select and does anybody have first hand experience of it. I'd be grateful for any opinions.
BMW Select is just the posh name for a PCP
i.e. small deposit monthly payments then an "optional final payment" generally weighted to be a little less than the value of the car at that date, always paying interest on the total borrowed amount. Voluntary termination is possible at the 50% point IIRC.
There is a similar "Balanced payments" scheme which is HP with a balloon, gives you more flexibility to chop and change as you just pay interest based on what you currently borrow, but more risky - if the car value at the end is worth less than the balloon, tough s
t, pay up 
Run the numbers and see for yourself how much the deal will cost you. What's a Z4M Coupe worth ? £20k ? tbh you'd be better off with straight repayments, bearing in mind it's not a cheap car to run.
i.e. small deposit monthly payments then an "optional final payment" generally weighted to be a little less than the value of the car at that date, always paying interest on the total borrowed amount. Voluntary termination is possible at the 50% point IIRC.
There is a similar "Balanced payments" scheme which is HP with a balloon, gives you more flexibility to chop and change as you just pay interest based on what you currently borrow, but more risky - if the car value at the end is worth less than the balloon, tough s
t, pay up Run the numbers and see for yourself how much the deal will cost you. What's a Z4M Coupe worth ? £20k ? tbh you'd be better off with straight repayments, bearing in mind it's not a cheap car to run.
Edited by john_p on Monday 20th December 19:21
Had my last three BMW on it. Never actually bought a car for cash. I know lots of people argue that it's stupid to pay charges on finance but I get the car I want now rather than waiting for years to save for it.
Imagine if people waited to buy their house until they had enough cash. How would that work? Live in a rented house which someone else owns until they have it.
Anyway i've never had a problem with BMW finance but remember that the dealer makes his own profit from the deal as well as the finance firm. If you don't mind (and I don't) then that's OK
If you can afford the payments and want the car then why not go for it.
I couldn't care less aboout owning a depreciating asset. I have the fun of it and am happy to pay for it each month.
Imagine if people waited to buy their house until they had enough cash. How would that work? Live in a rented house which someone else owns until they have it.
Anyway i've never had a problem with BMW finance but remember that the dealer makes his own profit from the deal as well as the finance firm. If you don't mind (and I don't) then that's OK
If you can afford the payments and want the car then why not go for it.
I couldn't care less aboout owning a depreciating asset. I have the fun of it and am happy to pay for it each month.
Oortam said:
I was wandering around a main BMW dealer. as you do, and I came across a very nice Z4M Coupe.
Is this a new or used car? PCPs can work well on new cars as there are often incentives such as deposit contribution or low interest rate. These aren't available on used cars so PCP tends to be a worse deal than just getting a loan and buying the car.
A lot depends on the guaranteed final value - you could be "lucky" if you have a PCP and the arse drops out of the Z4 market as you could just walk away from the car at the end of deal. Bear in mind though, at that point you have *nothing* - no car and no money.
It's a second hand car and they're looking for 25k for it. It's a bit more than I can afford for cash but a Z4M does seem to be the best value at the moment for owning a real M version car, without going for an older model. I did a quick run through the figures, taking into account interest paid to me if I had put "my" cash into a high interest account while I was paying the monthly payments, and it seems I do pay more by using BMW select, but not that much more.
A Z4M Coupe for £25k - surely they are having a laugh. I own one, so in theory should be +vely chuffed at their pre-Christmas price appreciation, but the BMW Stealer is taking the mickey at this price point. Plenty of cars with BMW Warranty around the £20k mark with great specs. Get yourself on the z4-forum.com
Haggle a lower price on the car. Refuse to talk about finance at this stage.
Then once you have them down as much as you think possible then haggle a better deal on the finance.
You are after all buying two separate items.
Tell them to stick the gap and tyre insurance.
You might feel better hanging onto your savings and taking a loan secured on the car. You never know you might need your savings and having to sell the car in a hurry will lose you more.
Shop around for a loan and remeber always make them quote the APR rate not the flat rate or monthly rate as this is all smoke and mirrors.
Dealer probably has £3k or more to move on that car. Go for a big discount. Not too many folk buying Z4Ms at Xmas.
Great choice of car BTW. Hope you get it.
Select is just as good or bad as any other PCP deal.
Like any other manufactuer they all say they build equity into the GFV but who knows maybe you will maybe you won't however you should do all the sums on there being no equity in the car total cost over a certain period of time. If the costs are acceptable and affordable and it's the car you want then get it.
You pay a premium for the PCP and that's because you want an insurance policy on it's total cost ie future value.
Like any other manufactuer they all say they build equity into the GFV but who knows maybe you will maybe you won't however you should do all the sums on there being no equity in the car total cost over a certain period of time. If the costs are acceptable and affordable and it's the car you want then get it.
You pay a premium for the PCP and that's because you want an insurance policy on it's total cost ie future value.
Thanks for all the comments so far guys. I won't be buying at that price, even tho' it's a very nice car with a guaranteed very low mileage. I'm watching various cars nationwide just now that are a bit cheaper, but I'm sure the prices will drop even more once we get into January/February. I have to agree that the guaranteed price for your car at the end of the finance period is tempting, but I won't be putting a big mileage on the car, I do about 6k - 8k miles a year, so I'm confident the car will be worth more than the guaranteed figure when the time comes. The big plus for me is keeping your capital in the bank and having the option to walk away if the unexpected happens.
V8A*ndy said:
Haggle a lower price on the car. Refuse to talk about finance at this stage.
Then once you have them down as much as you think possible then haggle a better deal on the finance.
You are after all buying two separate items.
Your more likely to get a lower price on the car if you take finance as the dealer makes money on the finance.Then once you have them down as much as you think possible then haggle a better deal on the finance.
You are after all buying two separate items.
You used to be able to negotiate the deal as if you were going to take the dealers finance, and then pay cash. But you tend not to be able to do that now as the sale and the finance are usually done by different people.
Z4monster said:
Had my last three BMW on it. Never actually bought a car for cash. I know lots of people argue that it's stupid to pay charges on finance but I get the car I want now rather than waiting for years to save for it.
Imagine if people waited to buy their house until they had enough cash. How would that work? Live in a rented house which someone else owns until they have it.
Anyway i've never had a problem with BMW finance but remember that the dealer makes his own profit from the deal as well as the finance firm. If you don't mind (and I don't) then that's OK
If you can afford the payments and want the car then why not go for it.
I couldn't care less aboout owning a depreciating asset. I have the fun of it and am happy to pay for it each month.
You do know that kind of comment really upsets the keyboard warriors on here, it won't be long before one of them comes along with a beard and a Rover to tell you that you that they think you are wrong! Imagine if people waited to buy their house until they had enough cash. How would that work? Live in a rented house which someone else owns until they have it.
Anyway i've never had a problem with BMW finance but remember that the dealer makes his own profit from the deal as well as the finance firm. If you don't mind (and I don't) then that's OK
If you can afford the payments and want the car then why not go for it.
I couldn't care less aboout owning a depreciating asset. I have the fun of it and am happy to pay for it each month.
Edited by Number 5 on Monday 20th December 22:33
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