BMW full circle finance

[jozeff]

Hi guys,

So whos used BMW full circle finance? What are the pros and cons?

I'm only thinking about it for my next BMW because there's no guaranteed value with a normal Chattel Mortgage or Commercial Hire Purchase. So if my Kms suddenly start to increase, the residual value of my car drops and won't cover the payout figure.

What do you guys reckon?

[micha3l]

If your km's suddenly increase, full circle won't help, I'm pretty sure you need to nominate a level of km's you will travel.

My parents financed a car using it a few years ago, and for the extra cost they said they wouldn't use it again

[BBK]

Just another way to make money for BMW...

[pavo335]

Like any financial product it depends upon your individual circumstances.

Personally I don't like/need the guaranteed buy back and prefer the good ole days where you could have a $1 residual

[BMWRX]

Originally Posted by BBK

Just another way to make money for BMW...

True. They don't do it to make friends.

[amk2912]

Does anybody honestly think a finance scheme is ever designed to benefit the customer?

[Otaku]

The idea that the residual equals a balloon bothers me to say the least, and the guaranteed future values aren't exactly the market levels, gauging from what I've been quoted in Aus.

[Otaku]

To add, the benefit portrayed is that you get a "guaranteed future value" that could be higher than the market value when you go to change over, regardless of model facelifts or changes to market conditions. As others have suggested, the real benefit is given to BMW, getting first crack at the next sale.

[135BANDIT]

HI
I have BMW finance on both cars (1 x chattel mort & 1 x hire purchase) , i had to negotiate very hard , but managed to get a rate that was similar to Home loan rates at the time in 2010.
BMW did however offer the largest residual on the X5 (55%) and this made a significant impact on my decision.

Direct debit each month and aligned for ease of budgeting - couldn't be happier. The X5 comes out of the mortgage next year and I will owe 60k on X5 3D LCI with all the fruit ......... not bad I think.

[VGR00]

I wouldn't do full circle as I like to be in control of when I want to get out of my car. If you do a 3 year deal then want to get out of it after 2, then you will be hit very very hard.

[Coupe135]

i had a full circle lease on my 130i. with a payout fiqure of $25k and six months left on the 3 year lease i sold the car for $35k.
Would not do it again. for the extra charges and limited to 15000km a year.
Definately have a look at there leasing as they have one of the best rates if you negotiate.

[Taymaishu]

Any car finance that has a residual requires an estimated km useage.

That's how they calculate maintenance costs and the residual at term end.

Ie: you will struggle to get any finance (apart from a bank/personal loan) without declaring your K's.

If done through work and salary sacrificed, it's a tax requirement to calculate FBT owed by the employee.

[pavo335]

Originally Posted by Taymaishu

Any car finance that has a residual requires an estimated km useage.

That's how they calculate maintenance costs and the residual at term end.

Ie: you will struggle to get any finance (apart from a bank/personal loan) without declaring your K's.

If done through work and salary sacrificed, it's a tax requirement to calculate FBT owed by the employee.

I think you are referring to an operating lease. Finance lease is different ( and these days) the lessee is responsible for residule

[Taymaishu]

More a novated lease. The lessee is still responsible for the residual. The again, BMW FInance do not do one off novation

[pavo335]

Originally Posted by Taymaishu

More a novated lease. The lessee is still responsible for the residual. The again, BMW FInance do not do one off novation

Nah novation has nothing to do with BMW as such it is a legal thing between company and employee, so employee is responsible for car not company (individual cant do a lease normally only company, with fbt only company can use statutory method) and I'm pretty sure BMW finance still do them.

[Taymaishu]

Originally Posted by pavo335

Nah novation has nothing to do with BMW as such it is a legal thing between company and employee, so employee is responsible for car not company (individual cant do a lease normally only company, with fbt only company can use statutory method) and I'm pretty sure BMW finance still do them.

Yup, they offer novation through companies that are in the corporate plan. At least that was in 2009!