Negative Equity

jozeff · 11-01-2013, 02:17 AM

Hi Guys,

For the accounting types, or the ones that have Commercial Hire Purchase agreements, what does one do when they realise they have either done too many Kms on their car, or their value has dropped significantly, that it does not match the dollars owing on the car?

Is there any way to get out of it and minimise the payout figure, or get into a newer car without shelling out a huge amount of money?

Joe

skidz · 11-01-2013, 04:52 PM

no

VGR00 · 11-01-2013, 07:52 PM

You have to pay to play.

dr.bmw · 11-01-2013, 10:46 PM

get someone to wind back the kms

Kabnine · 11-01-2013, 11:56 PM

Quote:

Originally Posted by dr.bmw

get someone to wind back the kms

Cut your losses and realise that you are never going to get your money back and start pouring copious amounts of money into it, so that it is insanely fast and handles brilliantly.

P90Puma · 11-02-2013, 12:33 AM

Yes, you buy a used car instead of a brand new one.

But thankfully people like you buy new ones, so thank you.

Karmic Man · 11-03-2013, 01:26 AM

You should have trade in the car before it hits that many KMs...how many KMs have your car done?

Stuart@BMRAutowerkes · 11-03-2013, 02:06 AM

If you keep making the repayments it'll eventually reach that equilibrium and you'll break even with your payout figure. Unless you have a 50% residual or something, could be tough.

BMJ · 11-09-2013, 10:56 PM

Quote:

Originally Posted by jozeff

Hi Guys,

For the accounting types, or the ones that have Commercial Hire Purchase agreements, what does one do when they realise they have either done too many Kms on their car, or their value has dropped significantly, that it does not match the dollars owing on the car?

Is there any way to get out of it and minimise the payout figure, or get into a newer car without shelling out a huge amount of money?

Joe

when i sell my 335 i will have around 3-5k neg, guy at BMW told me they would carry it forward to a new car if at that level but anything over 5k needed to be paid out...

when selling it's just what the market is offering.. earlier you sell the more interest you have left.. hold longer the less the car is valued on the market... you never normally win on a finaced car.

Scoobs · 11-09-2013, 11:28 PM

After lots of trial and error... More error than trial... ( 8 leased cars in 12 years ), I have found that 3 yr 50% residual seems to work well. At all times during the agreement, the payout seems to be close to market ( maybe not first year ).

Latest example, current lease expired in June on a 2010 135i DCT. Paid $84,000. Payout $42,000. Market price was high $40k's with most sellers at the time asking early to mid $50ks

Worst thing I ever did was take out a 5 yr 40% on an M3. Took a bath on that sucker when I had to get out early.

11-01-2013, 02:17 AM	#1
jozeff Private First Class 20 Rep 139 Posts Drives: BMW 130i Join Date: Jun 2009 Location: Australia iTrader: (0)	Negative Equity Hi Guys, For the accounting types, or the ones that have Commercial Hire Purchase agreements, what does one do when they realise they have either done too many Kms on their car, or their value has dropped significantly, that it does not match the dollars owing on the car? Is there any way to get out of it and minimise the payout figure, or get into a newer car without shelling out a huge amount of money? Joe
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11-01-2013, 04:52 PM	#2
skidz Banned 16 Rep 511 Posts Drives: 1mers nuts :D Join Date: Apr 2013 Location: unda da bridge iTrader: (0)	no
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11-01-2013, 07:52 PM	#3
VGR00 Major 53 Rep 1,497 Posts Drives: 430i Gran Coupe Join Date: Feb 2007 Location: Brisbane - Australia iTrader: (1)	You have to pay to play.
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11-01-2013, 10:46 PM	#4
dr.bmw Chirurgeon 39 Rep 424 Posts Drives: 125i AW/CR Join Date: Apr 2009 Location: randwick iTrader: (0) Garage List 2008 125i [10.00]	get someone to wind back the kms __________________ E Pluribus Unum
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11-02-2013, 12:33 AM	#6
P90Puma Would rather be driving. 12 Rep 175 Posts Drives: 2008 135i 6MT M-Sport Join Date: Aug 2013 Location: Ontario, Canada iTrader: (1)	Yes, you buy a used car instead of a brand new one. But thankfully people like you buy new ones, so thank you.
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11-03-2013, 01:26 AM	#7
Karmic Man Lieutenant Colonel 1996 Rep 1,759 Posts Drives: M2C Join Date: Aug 2013 Location: World iTrader: (0)	You should have trade in the car before it hits that many KMs...how many KMs have your car done?
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11-03-2013, 02:06 AM	#8
Stuart@BMRAutowerkes Major General 808 Rep 5,530 Posts Drives: a black car Join Date: Sep 2010 Location: Sydney iTrader: (3)	If you keep making the repayments it'll eventually reach that equilibrium and you'll break even with your payout figure. Unless you have a 50% residual or something, could be tough.
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11-09-2013, 11:28 PM	#10
Scoobs Banned 7 Rep 252 Posts Drives: 135i Space Grey DCT Join Date: Sep 2009 Location: Sydney Australia iTrader: (0)	After lots of trial and error... More error than trial... ( 8 leased cars in 12 years ), I have found that 3 yr 50% residual seems to work well. At all times during the agreement, the payout seems to be close to market ( maybe not first year ). Latest example, current lease expired in June on a 2010 135i DCT. Paid $84,000. Payout $42,000. Market price was high $40k's with most sellers at the time asking early to mid $50ks Worst thing I ever did was take out a 5 yr 40% on an M3. Took a bath on that sucker when I had to get out early. Last edited by Scoobs; 11-09-2013 at 11:54 PM..
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