Advice please - what to do if you hate your car?

nheather

I know that I risk sounding spoilt and privileged and that I’ve been really stupid - I know all that I beat myself up frequently over the stupid decision and I should have done this or that.

So hate is a strong word but I really dislike my car, I wish so often that I had never bought the thing.

So simple, sell it, get something I like, move on - but it doesn’t feel that simple to me.

The car in question is a BMW 320D M-Sport, bought new on a lease plan just over a year ago.  For the previous 15 years I had driven company cars (most VW Golfs) and with a change in job circumstances and heading for retirement I took the opportunity to buy a nice car that was going to last me ten years or more.  Had always wanted a BMW 3 Series (irrationally), had a short test drive and it seemed fine, but it wasn’t very demanding and I suspect I let my heart colour my judgement.

My job often requires commuting by train so I knew that my annual mileage could be very low but unpredictable.  To be safe I went for a 12,000 plan over 4 years - in its first year I have put around 3,000 miles on the clock.  I knew that risk when I bought becuase the plan was that I was going to keep the car well beyond the lease.

But finding that I dislike the car so much has thrown a spanner in the works.

Truefully, it is a very nice car, hasn’t let me down, I just don’t like it that much - but it is not so bad that grinning and bearing it is an option.

The original plan was to pay off the balloon at the end of the lease and keep the car for a few more years - can’t see me doing that any more.

Another option is to hand the car back to BMW Finance at the end of the lease, wishing I’d gone for three years rather than four.

I know that BMW will contact me before the lease runs out to try ans sell me another BMW - to be honest I don’t think I’d be interested in that.

Anyone else been in this situation?

Are there any other options?

Cheers,

Nigel

rousetafarian

Simple, voluntarily terminate it once you paid off 50% of the total balance including interest and deposit.

You aren’t tied to it for the full term and the vehicle that you spent months researching won’t be hated any longer.

nheather

Thanks for the suggestion, this is all pretty new to me be sheltered by company car ownership for so many years.

So can we work through an example.  These are not the exact numbers, I don't know them off the top of my head but they are ballpark.  Also not sure what the interest obligations are but I remember the Finance guy telling me that I could make extra payments to finish early and reduce interest but questioned whether it would be worth it as the interest rate was so low.  He also mentioned that after the 50% mark I would probably be contacted by the dealership about trading it in for a new car.

So say these are the numbers

Term - 4 years
Loan Value - £20,000
Total Interest - £2,000
Balloon  - £12,000

So I understand that at the end of 4 years, I would have paid £22,000 and that I could then either hand the car back and walk away or pay £12,000 to keep the car.

I had planned to buy the car, probably to keep or possibly to sell or trade in for something different.  I imagined at the time that with low mileage it would be worth more than £12,000 but I'm not so sure about that any more giving the rise in diesel hatred that we have seen in the last six months.

So if I were to voluntarily terminate after two(ish) years having paid 50% what would I pay back

Outstanding Loan - £10,000
Outstanding Interest - £1,000

So would I pay back £10,000 or £11,000 or would they look at the value (say it is worth £18,000 at this point in time) of the car at that time and take that into account?

I'm guessing the answer may be different if I am just going to BMW Finance to wash my hands of it, or to a BMW Dealer to look at a different car.

And could I take it to a different dealership (say Audi) - or would they insist that I cleared the finance first?

Cheers,

Nigel

mjn

What do you dislike about the car?

rousetafarian

The simplest way is to check your agreement on the finance page you’ll see the full term 48 months) and the total amount to pay over the full term.

Take off any deposit paid then divide that amount by your monthly payment which will give you a total number of payments to reach the magic 50%.

My last one worked out at 32 payments from 48 due to the low despost and interest profile.

At this point you’ll not need to worry about any residual values, excess mileage or charges for unfair wear and tear.

I recommend you to look at the legalbeagles website and read up on VT, it’s very simple doesn’t affect your credit but might piss off the lender.

Trollslayer

The lender is doing this as a business so doing that is simply good business for the customer.

nheather

Thanks for the ideas, I will consider it over the next year - maybe it will grow on me.

One question, is the 50%, 50% of the loan or 50% of the value of the car - in other words does it take into account deposit?

Cheers,

Nigel

rousetafarian

50% of the total amount payable including interest and charges over the full term. The deposit will be split out, so if you put a large deposit down it will reduce the number of months it would take to reach the magical 50% threshold.

nheather

Thanks, yes I did put a fair deposit down.  I assume it excludes the manufacturer and dealer discounts.

So it is

List Price - BMW Discount - Dealer Discount   Interest = Amount to Pay

And I’m looking at 50% of that amount to pay.

But will need to look at my finance agreement to see if the interest is the whole amount for the four years or just what was accrued up to settlement.

And the value of the car is irrelevent?  The finance is all based on a value at the end of 4 years.  If I settle after 2 years the car is potentially worth more.

Cheers,

Nigel

un1eash

The 50% includes the gmfv as this is part of the total amount payable. A lot of people don't realise there paying interest on the gmfv also.

"The Total Amount Payable is the total amount borrowed plus interest and fees. It also includes the Guaranteed Minimum Future Value (GMFV) on a PCP. This means that you usually don’t reach the voluntary termination point until very late in a PCP agreement"

If you got a good discount you may break even around month 20 if you sell or trade it in, if you put a big deposit down you risk throwing it away.

PCP will become the new PPI