[JustChris]

I wasn't aware of this, seems there's a law change coming. Reading between the lines of TRLs post below on Baby BMW seems the same rate in future will be applied across the board?

Thoughts?

Hey Buddy. Just to explain how that works... there was a large chassis support contribution from BMW UK in Q1,2 and 3. But at 4.9% APR>
IN Q4 BMW UK moved to a standard interest charge of 2.9% APR on all new car product (as the law is about to change on charging customers different interest rates)... To fund that move to 2.9% BMW removed all of the chassis support (on nearly every model). Thats why you have seen the discount
shrink to what you are seeing now. The dealers margin has always been around 10-12% and thats the best anyone can hope for now.

TRLs page and specific price increase thread here.

https://www.babybmw.net/forum/viewto...14024#p1614024

[Tengocity]

That's interesting. Shows just how critical the PCP buyer is as this totally screws things up for "cash" buyers.

[Goneinsixtyseconds]

Originally Posted by Tengocity

That's interesting. Shows just how critical the PCP buyer is as this totally screws things up for "cash" buyers.

Not entirely sure it will work that way.

The finance contribution has disappeared, but discounts are still there. Wouldn’t a cash buyer get all the discount now as none of it is dependent on taking out finance?

Maybe I’m a cynic, but the discounts on some BMW cars are as big as ever, it’s just shown all as discount and none on finance. My initial thoughts were it was being done because big finance contributions reduce the VT point by 6 months or more sometimes.

I just thought they were shuffling the numbers round to stop customers taking advantage of that.

[Tengocity]

Maybe you're right. I'm just thinking based on what's happened this quarter, which is smaller upfront discounts, but lower average PCP. It's an odd quarter though, so may not be usefully representative of what's to come, however they make buying a new BMW relatively less attractive for someone not buying on BMW finance.

[Goneinsixtyseconds]

Originally Posted by Tengocity

Maybe you're right. I'm just thinking based on what's happened this quarter, which is smaller upfront discounts, but lower average PCP. It's an odd quarter though, so may not be usefully representative of what's to come, however they make buying a new BMW relatively less attractive for someone not buying on BMW finance.

Just as an example the Mini JCW we bought had 25% discount and was the same for pcp or for cash. All discount, no finance contribution.

And if the discount had included £2.5k of finance contribution instead of just a straight £9k discount, the VT point would have been month 36, doing it the new BMW way it’s now month 42.

[JD6]

There still seem to be some reasonable discounts out there - here are some Stratstone examples:

£13k off a 530d https://www.stratstone.com/search/of...dr-auto/19730/

£21k off an 840i https://www.stratstone.com/search/of...dr-auto/69911/

£30k off a 730d https://www.stratstone.com/search/of...dr-auto/14358/

I don’t think that BMW will last long without big discounting in this environment. They seem to be set up for high production levels so when demand is weak they always blink first...

[225]

The discounts must surely be back to normal on 3ers etc in q1 2021. A month lock down, run up to Christmas and unemployment going up will wipe out q4 sales.
While I am still frothing at the mouth to get back in a 6pot bmw I'm glad I have waited thus far. Better all the 6month old m340s are sat on display at a dealer going down in price for a month rather than sat on my drive costing me 500 quid a month.

[HighlandPete]

Originally Posted by 225

... I'm glad I have waited thus far. Better all the 6month old m340s are sat on display at a dealer going down in price for a month rather than sat on my drive costing me 500 quid a month.

Same here. With very low mileage this year, it is no time for me to be buying a new/nearly new car. I'm waiting to see what next spring brings.

[ZedsRedBaby]

I'd be interested to know what law's changing. The only thing I'm aware of in the offing is the Financial Services Bill and there's nothing in there about rates charged to consumers.

[ZedsRedBaby]

Originally Posted by Goneinsixtyseconds

Just as an example the Mini JCW we bought had 25% discount and was the same for pcp or for cash. All discount, no finance contribution.

And if the discount had included £2.5k of finance contribution instead of just a straight £9k discount, the VT point would have been month 36, doing it the new BMW way it’s now month 42.

Interestingly, the £21k on the 840i deal linked by JD6 is deposit contribution, which knocks 18 months off the VT point compared with a discount of the same amount.

[SantaEugence]

Originally Posted by ZedsRedBaby

I'd be interested to know what law's changing. The only thing I'm aware of in the offing is the Financial Services Bill and there's nothing in there about rates charged to consumers.

I assume this is the FCA ban on motor finance discretionary commission models rather than a legislative change.
So no doubt as with most FCA changes aimed at helping consumers, it'll benefit the minority whilst largely shafting most people.

[ZedsRedBaby]

Originally Posted by SantaEugence

I assume this is the FCA ban on motor finance discretionary commission models rather than a legislative change.
So no doubt as with most FCA changes aimed at helping consumers, it'll benefit the minority whilst largely shafting most people.

Yes, of course. Which I don't think actually prevents BMW from offering different rates for different models, as long as it's the same for all customers. So not the driver for the new 2.9% across the range, unless I'm missing something?

[SantaEugence]

Originally Posted by ZedsRedBaby

Yes, of course. Which I don't think actually prevents BMW from offering different rates for different models, as long as it's the same for all customers. So not the driver for the new 2.9% across the range, unless I'm missing something?

It could be their approach to ensure compliance with the new rules, blanket policy so there's less risk of a slip up

[ZedsRedBaby]

Originally Posted by SantaEugence

It could be their approach to ensure compliance with the new rules, blanket policy so there's less risk of a slip up

Maybe. In fact, just re-reading the FCA publication, the dealer can still negotiate the rate as part of the deal, as long as it doesn't affect the amount of commission they receive. So not a ban on different interest rates at all.