[jusdorange]

I've noticed a lot of people here got a lease

Now if you have the cash to pay upfront can a lease still be the better option ? Bigger discounts etc?

Or does it depend on how long you intend to keep the car?

Thanks

[ukbeemerboy]

Assuming your referring to PCP rather than a lease then yes better deals are to be had due to the dealer contributions that are sometimes offered. They aren't being offered at the moment but it won't be long until they are offered again.

[JustChris]

I just prefer to lease rather than tie up the cash in the car. I know it's got interest built in so costs a little more but PCP takes out the hassle of selling etc etc etc. Lazy but good for me

[nordberg]

I think the OP is referring to leasing rather than PCP?

[M4dski11z]

Originally Posted by ChesterX5

I just prefer to lease rather than tie up the cash in the car. I know it's got interest built in so costs a little more but PCP takes out the hassle of selling etc etc etc. Lazy but good for me

I don't like tying cash up in a car either. I'd rather have that cash sat in some kind of investment that's easily accessible, then pay the monthlies out of that.

[jusdorange]

Which is the one with low monthlies ? Change 3 years later ?

[nordberg]

Originally Posted by jusdorange

Which is the one with low monthlies ? Change 3 years later ?

PCP or leasing?

[M4dski11z]

PCP - personal contract purchase. Usually set up by main dealers.
PCH - personal contract hire. Usually setup by an online broker such as fleetprices.co.uk, ukcarcontracts.co.uk etc.

[teaston]

Originally Posted by Ray335d

PCP - personal contract purchase. Usually set up by main dealers.
PCH - personal contract hire. Usually setup by an online broker such as fleetprices.co.uk, ukcarcontracts.co.uk etc.

I'm pretty sure the OP is talking about PCP as it has the option to buy at the end.

PCP will work out more expensive in the long run as although you can get better discounts (maybe 20% or more compared to about 15%) but at an interest rate of 4.9% over 4 years the maths speaks for itself.

Saying that PCP feels cheaper as it's only little bits coming out each month. And you have the choice of easily changing it after 3 years without the hassle of selling the old one!

[nordberg]

It was only £7 more p/month for me to PCP rather than PCH as the deals were so good at the back end of last year..

Not sure what they're like at the moment....

[teaston]

Originally Posted by nordberg

It was only £7 more p/month for me to PCP rather than PCH as the deals were so good at the back end of last year..

Not sure what they're like at the moment....

The closest TRL could get to my £432pm for same spec was about £460pm, this was a couple of months ago.

[nordberg]

Originally Posted by teaston

The closest TRL could get to my £432pm for same spec was about £460pm, this was a couple of months ago.

What was your deposit and term?

[teaston]

Originally Posted by nordberg

What was your deposit and term?

My PCH is £1400 deposit + £300 admin fee for 2 years

TRL's PCP quote was £1500 deposit inc £500 BMW loyalty contribution, 4 years!

[M4dski11z]

On the flip side of the above prices... Not a single PCH deal could get close to my £1500 down and £495/m PCP once I added the options I wanted.

[Quakered]

Cash is always king. The incentives they offer on rental contracts are available to cash buyers - remember BMW are in the business of flogging cars and not running a finance company. Any business would preferred to be paid up front for their product rather than a stream of rental payments followed by flogging the car secondhand in 3 or 4 years time. Car companies offer finance so they can supply new cars to those who cannot really afford them!

I think paying cash also makes for more sensible decisions when going though the options list. I think considering whether an option is worth so many hundreds of £ leads to more sensible decisions than whether it is worth a few quid a month!

[j.s.]

Originally Posted by Quakered

Cash is always king. The incentives they offer on rental contracts are available to cash buyers - remember BMW are in the business of flogging cars and not running a finance company. Any business would preferred to be paid up front for their product rather than a stream of rental payments followed by flogging the car secondhand in 3 or 4 years time. Car companies offer finance so they can supply new cars to those who cannot really afford them!

As a company BMW, or any other large company selling physical products, may wish to have a non-insignificant of their products sold on terms which does not involve a big upfront payment, and then no income until the product is replaced years later. Such a financial model is very vulnerable to general economic up and down turns - if the economy in Europe in general slows down, it will have an immediate effect on the number of cars sold, causing the financial results of the likes of BMW to show large fluctuations. This is something the stock markets does not like, they prefer predictability - for this reason leasing and/or financing is actually a good thing for the likes of BMW, even if there is a slowdown in the economy, they will still have money coming in from all the contracts signed in the previous years, meaning they will have far less abrupt fluctuations in their financial results, which again means less of an impact to their stock price - which is what any publicly listed company at the end of the day care about, shareholder value.

To us as car buyers, it means that the question of what gets the best overall deal, cash, lease or finance is not as simple as we might think.

[chiark]

Bmw made nearly half a billion euros in profit from financial services... That's a quarter of their overall profit.

There was a time a few years ago that they made more money from finance than making cars. At that point they were a finance company that made the things they were financing

Just look at every cost and work out what works for you... There's no "right" answer for everyone.

I'm putting half down in cash and financing the rest on a straight loan. That'll cover depreciation over 3 years. I intend to keep the car for 6+ years, so a PCP where I was paying a load of interest didn't interest me as I had the cash...

If you're changing cars in 3 years and don't want to put much down, I'd look at leasing.

[....,,,,..,,..]

Originally Posted by Quakered

Cash is always king. The incentives they offer on rental contracts are available to cash buyers - remember BMW are in the business of flogging cars and not running a finance company. Any business would preferred to be paid up front for their product rather than a stream of rental payments followed by flogging the car secondhand in 3 or 4 years time. Car companies offer finance so they can supply new cars to those who cannot really afford them!

I think paying cash also makes for more sensible decisions when going though the options list. I think considering whether an option is worth so many hundreds of £ leads to more sensible decisions than whether it is worth a few quid a month!

I think that May have been model followed once upon a time.

However now, they target lease and pcp markets.

Just look at their very competitive April deals etc.

If it was purely cash sales and relied on large discounts, you would not see the same number of cars on the road.

I know I would not be getting one, even though I get a very very good deal.

Car manufacturers would likely be more at risk if people kept their cars for 6 + years. Most dealerships in non city locations would likely fold, what with the joneses and smiths changing cars every 7 years.

I did not have ability to put half price of car down, however my opt out money covers monthly pcp, gap and innsurance, hence keeping options under a certain amount.

[dopper99]

Originally Posted by chiark

Bmw made nearly half a billion euros in profit from financial services... That's a quarter of their overall profit.

There was a time a few years ago that they made more money from finance than making cars. At that point they were a finance company that made the things they were financing

Just look at every cost and work out what works for you... There's no "right" answer for everyone.

I'm putting half down in cash and financing the rest on a straight loan. That'll cover depreciation over 3 years. I intend to keep the car for 6+ years, so a PCP where I was paying a load of interest didn't interest me as I had the cash...

If you're changing cars in 3 years and don't want to put much down, I'd look at leasing.

My PCP is 3.9%. I wouldnt call that a "load of interest"?
Nothing stopping you putting some cash on a PCP deal, then you'll get the cheap PCP interest rate on the rest you owe. You would probably save less in interest than a straight loan. Current loans appear to be around 6%+ for borrowing around £20K.

[teaston]

Originally Posted by dopper99

My PCP is 3.9%. I wouldnt call that a "load of interest"?
Nothing stopping you putting some cash on a PCP deal, then you'll get the cheap PCP interest rate on the rest you owe. You would probably save less in interest than a straight loan. Current loans appear to be around 6%+ for borrowing around £20K.

Yes BMW finance is cheaper than a loan, because all a loan company makes from you is the interest, but BMW also get the sale of a car from you!

[ukbeemerboy]

Originally Posted by Quakered

Cash is always king. The incentives they offer on rental contracts are available to cash buyers - remember BMW are in the business of flogging cars and not running a finance company. Any business would preferred to be paid up front for their product rather than a stream of rental payments followed by flogging the car secondhand in 3 or 4 years time. Car companies offer finance so they can supply new cars to those who cannot really afford them!

I think paying cash also makes for more sensible decisions when going though the options list. I think considering whether an option is worth so many hundreds of £ leads to more sensible decisions than whether it is worth a few quid a month!

Sorry but I'm afraid in these current times, cash isn't king anymore. Credit is. Dealer contributions on PCP prove that and they don't make as much money out of selling the cars as you'd think through cash buyers. BMW don't really want you paying cash for your car. For one, once you've driven off, they've lost the connection with you bare servicing, and two you aren't paying them any interest through any finance deal.

Once your on a PCP, your sort of locked into the brand. I know you can terminate early, but they've still got the chance to talk you round and keep you loyal.

[....,,,,..,,..]

Originally Posted by ukbeemerboy

Sorry but I'm afraid in these current times, cash isn't king anymore. Credit is. Dealer contributions on PCP prove that and they don't make as much money out of selling the cars as you'd think through cash buyers. BMW don't really want you paying cash for your car. For one, once you've driven off, they've lost the connection with you bare servicing, and two you aren't paying them any interest through any finance deal.

Once your on a PCP, your sort of locked into the brand. I know you can terminate early, but they've still got the chance to talk you round and keep you loyal.

Exactly, just look at other makes that initially lost ground to likes of BMW.

In 2012, I would have been paying almost £200 a month more for a similar car to my 320d m sport plus tourer.

Even this time round I checked out ford and Jaguar, neither could give me as good a deal as I got.

Low arp rates and simple policies are king now, especially with more people taking opt out rather than company car schemes.