[AyrshireColin]

Okay so I know this isn't a massive concern in the grand scheme of things but stick with me....

Collecting an X3 M40i a week on Friday and VT'ing my current 335d (I'm paying up to clear me of the current car). New car is costing me £XXXpcm which I'm good with and not really looking to reduce.

Basically due to having a pot of cash to play with for the car change (budgeted solely for this reason) and by the time I square up BMWFS on the current car and make a smallish contribution I'm making to the new car I have £1k left over. I toyed with just putting it into the new car and further reducing the monthlies by £22/£23pcm but as above I'm with okay the numbers I have and would rather just keep the £1k than 'save' £22/£23pcm.

I'm considering just taking the new car and then in January calling BMWFS and making a £1k payment against the finance - does anyone have any experience of doing this and what is the benefit in doing so? I'm really struggling with what I gain (besides £1k off my finance balance!) and can't decide if I'd be best just keeping the cash in my pocket!

[isleaiw1]

Originally Posted by AyrshireColin

Okay so I know this isn't a massive concern in the grand scheme of things but stick with me....

Collecting an X3 M40i a week on Friday and VT'ing my current 335d (I'm paying up to clear me of the current car). New car is costing me £XXXpcm which I'm good with and not really looking to reduce.

Basically due to having a pot of cash to play with for the car change (budgeted solely for this reason) and by the time I square up BMWFS on the current car and make a smallish contribution I'm making to the new car I have £1k left over. I toyed with just putting it into the new car and further reducing the monthlies by £22/£23pcm but as above I'm with okay the numbers I have and would rather just keep the £1k than 'save' £22/£23pcm.

I'm considering just taking the new car and then in January calling BMWFS and making a £1k payment against the finance - does anyone have any experience of doing this and what is the benefit in doing so? I'm really struggling with what I gain (besides £1k off my finance balance!) and can't decide if I'd be best just keeping the cash in my pocket!

Options:

1. Ceramic coating
2. Winter tyres
3. Pay it down now (not sure why you would wait 3 weeks till Jan rather than do it at start...)
4. Stick it in a stocks and shares ISA, add a few extra quid every month and see if it grows to be enough to pay balloon by time you want to swap again...
5. a good xmas
6. booze
7. waste it....

[doncarlyon]

What's the APR on your finance?

[2CRO4TV]

If it's a pcp don't put the money into the car if you can afford the monthlies. If HP reduce your term with the lump sum.

[Run Silent]

Irrespective of it you decide to reduce the monthly or pay directly on the loan balance, don't just keep the money in the 'pocket' so to speak.

To do that, is the same as saying "I'm going to borrow £1,000 on my car to have walk around money" - that, I imagine we would all agree, would be a stupid financial decision.

Whether you pay the bond down to reduce the monthly, or make a 1 time additional payment, I don't believe either way will net to a difference in overall expenditures.

Bottom line - use the extra money to pay down the debt on the BMW or pay down debt elsewhere - don't just keep it.

[isleaiw1]

Originally Posted by Run Silent

Irrespective of it you decide to reduce the monthly or pay directly on the loan balance, don't just keep the money in the 'pocket' so to speak.

To do that, is the same as saying "I'm going to borrow £1,000 on my car to have walk around money" - that, I imagine we would all agree, would be a stupid financial decision.

Whether you pay the bond down to reduce the monthly, or make a 1 time additional payment, I don't believe either way will net to a difference in overall expenditures.

Bottom line - use the extra money to pay down the debt on the BMW or pay down debt elsewhere - don't just keep it.

unless you can invest it and earn more than the interest on the car...

[AyrshireColin]

Originally Posted by isleaiw1

Options:

1. Ceramic coating
2. Winter tyres
3. Pay it down now (not sure why you would wait 3 weeks till Jan rather than do it at start...)
4. Stick it in a stocks and shares ISA, add a few extra quid every month and see if it grows to be enough to pay balloon by time you want to swap again...
5. a good xmas
6. booze
7. waste it....

3. My thinking is that (as sh*t as it sounds planning like this - but let's call a spade a spade!) if I look to VT again in the future it works better for me. If I put in at the start then it's £1k less borrowed but essentially works as £500 when considering 1/2 of the amount payable to VT. If I use it as a one off payment in January (or whenever) it's a flat paid £1k against the total payable.

For arguments sake £20k payable = £10k paid to VT vs. £19k payable (£1k in) = £9.5k paid to VT.

[AyrshireColin]

Originally Posted by doncarlyon

What's the APR on your finance?

2.9% (current X model support) so I get that no point paying interest on money I don't need to borrow but all things considered (cost of a new car) I'm not going to worry about the impact that extra £1k at 2.9%.

[AyrshireColin]

Originally Posted by 2CRO4TV

If it's a pcp don't put the money into the car if you can afford the monthlies. If HP reduce your term with the lump sum.

Yeah it's a PCP which is why I struggle with doing anything other than just leaving it in the bank. The deals are based on a GFV which I can't alter so really don't see how it does anything other than just reduce the monthlies a wee bit.

I know it's not a massive amount of cash I'm talking about, just trying to gauge if I'm missing something in my thinking.

[isleaiw1]

Originally Posted by AyrshireColin

3. My thinking is that (as sh*t as it sounds planning like this - but let's call a spade a spade!) if I look to VT again in the future it works better for me. If I put in at the start then it's £1k less borrowed but essentially works as £500 when considering 1/2 of the amount payable to VT. If I use it as a one off payment in January (or whenever) it's a flat paid £1k against the total payable.

For arguments sake £20k payable = £10k paid to VT vs. £19k payable (£1k in) = £9.5k paid to VT.

Ha, I have never VT'd so that wasnt in my thought process. Is that how it works? Thought it was half of total amount payable under agreement (including deposit) so bigger deposit reduced VT point..?

[SuperHamz]

The best solution is to donate it to me

[2CRO4TV]

Originally Posted by AyrshireColin

Yeah it's a PCP which is why I struggle with doing anything other than just leaving it in the bank. The deals are based on a GFV which I can't alter so really don't see how it does anything other than just reduce the monthlies a wee bit.

I know it's not a massive amount of cash I'm talking about, just trying to gauge if I'm missing something in my thinking.

Either pimp up the car or be sensible and leave the money in the bank.

[Blacktemplar]

Stick it away to cover servicing costs

[Abzynthe]

Are you VT'ing or trading in?
Surely if you VT, you shouldn't have to pay anything extra, unless you have excess mileage.

[AyrshireColin]

Originally Posted by isleaiw1

Ha, I have never VT'd so that wasnt in my thought process. Is that how it works? Thought it was half of total amount payable under agreement (including deposit) so bigger deposit reduced VT point..?

Yeah I won't quite say needs must but the current car is a 67 plate 335d - 26 months old and the ar*e has well and truly fell out of it value wise (£46.5k list/£40.5k paid/£21k trade offered) so if I want to change it's VT for me (even at that I'm having to pay over £5.2k to make up the difference between my VT figure and my finance balance!!)…..first time I've ever done it but has certainly opened my eyes and has now changed my thought process!

I'm lacking clarity on the including deposit piece to be honest and struggling for a conclusive answer, if it was included/considered I'd just throw it in as a wee bit extra on the deposit.

[Kam05]

Coke and hookers!

As someone already said said put the £1k aside for servicing or tyres

[AyrshireColin]

Originally Posted by Abzynthe

Are you VT'ing or trading in?
Surely if you VT, you shouldn't have to pay anything extra, unless you have excess mileage.

I'm having to pay the difference between my VT point and my current balance......obviously you have the 'option' to just carry this over into a new finance agreement but that's just carrying over negative equity/bad debt.

[Goneinsixtyseconds]

Originally Posted by isleaiw1

Ha, I have never VT'd so that wasnt in my thought process. Is that how it works? Thought it was half of total amount payable under agreement (including deposit) so bigger deposit reduced VT point..?

Yes, you're right, even if the £1k is put in at the start, it still counts full off your half way point.

Total amount payable including interest, less deposit in full (yours and BMW's listed deposit contribution), divided by monthly payment, gives you total months to VT point.

It is still wasting money if you put a deposit in and VT though, as your deposit reduces your payment by an equal amount across the full term. So if you end early you've wasted the deposit on the unused months.

Paying £1000 after a month or two is no different to paying £1000 2 months before the VT point to get you to it quicker. May as well keep it and do something else with it in my opinion.

[isleaiw1]

Originally Posted by AyrshireColin

I'm having to pay the difference between my VT point and my current balance......obviously you have the 'option' to just carry this over into a new finance agreement but that's just carrying over negative equity/bad debt.

If you are at VT point you just hand back and pay no more so I suspect that you are not at VT point yet and so are just paying the amount to settle the finance versus the current part ex value....

Or you are paying all the payments needed to get to VT point (which might be cheaper than above)....

I would check your numbers / deal very carefully...

[AyrshireColin]

Originally Posted by Goneinsixtyseconds

Yes, you're right, even if the £1k is put in at the start, it still counts full off your half way point.

Total amount payable including interest, less deposit in full (yours and BMW's listed deposit contribution), divided by monthly payment, gives you total months to VT point.

It is still wasting money if you put a deposit in and VT though, as your deposit reduces your payment by an equal amount across the full term. So if you end early you've wasted the deposit on the unused months.

Paying £1000 after a month or two is no different to paying £1000 2 months before the VT point to get you to it quicker. May as well keep it and do something else with it in my opinion.

Yeah that's exactly where I'm at in my head - zero benefit in reality. Just was looking for someone else to endorse the thought!

[AyrshireColin]

Originally Posted by isleaiw1

If you are at VT point you just hand back and pay no more so I suspect that you are not at VT point yet and so are just paying the amount to settle the finance versus the current part ex value....

Or you are paying all the payments needed to get to VT point (which might be cheaper than above)....

I would check your numbers / deal very carefully...

I'm not at my VT point - I'm paying up the difference between my balance and VT point to allow me to VT.

Loosely speaking £27.5k balance/£22.3k VT point/£21k PX value so would cost me £5.2k to BMWFS to VT or £6.5k negative equity to trade - VT it is!

[Goneinsixtyseconds]

Originally Posted by AyrshireColin

I'm not at my VT point - I'm paying up the difference between my balance and VT point to allow me to VT.

Loosely speaking £27.5k balance/£22.3k VT point/£21k PX value so would cost me £5.2k to BMWFS to VT or £6.5k negative equity to trade - VT it is!

£5k is a lot to pay to change cars. Have you had your car valued elsewhere to see if you can limit that a bit more? Motorway.co.uk will get you a few valuations. MashinBenzin has a friend at BMW who buys second hand BMW's and I'm told he offers more than dealers generally do.