Hand back to MB Finance

[ca-uk]

our slk goes back next week and reading this has got me a bit worried - it's in immaculate condition (we've kept it in cotton wool, figuratively) - but now i'm worried they're going to stiff me!

the only thing i haven't been sure about is the service - the car was registered 08/08/08 but is going back on 26/07 - so technically the service isn't due until 8th august (it's done 17k miles, had 1 service at 12 months) - but i'm a bit worried as they're not particularly clear on that point.. it says 'must be serviced in accordance with the manufacturer service schedule'

 

[davidjpowell]

Why so cheap??
Because a 730d costs BMW UK around £40k to buy, and they know they will get £32k retailing it at the end, so they are only funding £8k and they are still making £14k on the finance, although they have to give the dealer approx. £4k to get the deal. But they are still making money and they make the 7 series extremely attractive, which is the whole point.

My old man went for a 730d sport over his usual S320cdi last time, so it works.

BMW (or their lender!) are still funding £40K for the duration of the loan. They will not use their cash to pay the £32k that they need to use until the end of the term when they can sell the car.

 

[Rory]

You have hired a car, you have to return it in the condition you got it in, obviously they let you off a little, but you can't hand it back with curbed wheels, scratches and dents!!!

You're allowed fair wear and tear, relative to the age and mileage. BVRLA has a leaflet about what is reasonable and, ideally, the finance company should use this as a reference.

They have to sort these before they can sell it on and they will not be spending lots of time and effort trying to find the cheapest place for each job, which you can do.

They often don't actually do the repairs - many ex-finance cars are driven straight to auction.

 

[akmal17]

However....BMW were offering this car for £1499 deposit +vat and 35 x £499+vat a month which works out £22280 over the same period.

Is this deal still available?

 

[gIzzE]

Is this deal still available?

No, although did see a deal on the new one for £1799 deposit and 35 x £599, didn't pay much attention as I was waiting for the parts guy.

Worth looking at the contract hire sites for the best deals, if BMW are offering something someone else will be offering the same or better.

 

[gIzzE]

BMW (or their lender!) are still funding £40K for the duration of the loan. They will not use their cash to pay the £32k that they need to use until the end of the term when they can sell the car.

Of course, Alphera funds their cars for them, same with all the used cars on the forecourt, nearly all on stocking plans.

 

[davidjpowell]

Of course, Alphera funds their cars for them, same with all the used cars on the forecourt, nearly all on stocking plans.

I also think that they might have caught a cold on some of these deals. I bought a 2006 730D 2 years ago, that had, I reckon just come off one of these deals.

I paid, not £32k, but £21,500

 

[gIzzE]

They definitely got bitten hard, as did most manufacturers.
Apparantly Mercedes was the worst hit, they were over £9,000,000 upside down on buy backs at the end of 2009, but then cars were trading at absurdly low prices and now they are probably at their highest they have been for years.

 

[MOCAŠ]

There are companies that offer a specialist service in preparing cars for lease return, such as this one.

I have no connection with the company and have never used their services, but it could be worth investigating if they have experience of what the lease companies are looking for.

 

[hawk20]

Contract Hire can work out far cheaper as the manufacturer always owns the car, therefore they can afford to sell at cost, buy back at retail and only make money on the finance.

Good example is BMW 730d.

£61,000 new
Value after 3 years and 30k miles £28000.

Cost to run for 3 years with cash purchase £33,000 or £916/month.

Cost to run for 3 years using finance at 8% apr £1225/month and a balloon of £28000 at the end. So £44100 over the 3 year ownership.


However....BMW were offering this car for £1499 deposit +vat and 35 x £499+vat a month which works out £22280 over the same period.

So approx. 50% cheaper to rent it than it is to finance it on a PCP type agreement.


Why so cheap??
Because a 730d costs BMW UK around £40k to buy, and they know they will get £32k retailing it at the end, so they are only funding £8k and they are still making £14k on the finance, although they have to give the dealer approx. £4k to get the deal. But they are still making money and they make the 7 series extremely attractive, which is the whole point.

My old man went for a 730d sport over his usual S320cdi last time, so it works.

I don't accept the logic here. It's the same car whether they supply it as PCP or contract hire.

Normally, every time I have checked, the contract hire and PCP rates are very similar. That's true whether you look at MB or BMW. PROVIDED that you remember that the Contract Hire rates are usually excluding VAT and for business users only.

The current BMW offer on the 7 series is £4,368 deposit and 35 payments of £699. Ex Vat. Nothing cheap about that.

 

[gIzzE]

I don't accept the logic here. It's the same car whether they supply it as PCP or contract hire.

Normally, every time I have checked, the contract hire and PCP rates are very similar. That's true whether you look at MB or BMW. PROVIDED that you remember that the Contract Hire rates are usually excluding VAT and for business users only.

The current BMW offer on the 7 series is £4,368 deposit and 35 payments of £699. Ex Vat. Nothing cheap about that.

Contract Hire means the car stays with BMW UK, where as PCP means the dealer buys the car and takes the gamble.

BMW wanted to sell more 7 series than Mercedes were selling S Classes a couple of years ago, hence threw money at the 7 series to get them out there and on the road. The dealer still got a slice and BMW never really lost money, but it probably made them nothing.
However, if they sold 10,000 7 series and it cost them £3k a car when all done and dusted it is still cheap advertising.

The current 7 series has no deals on it right now, but I am sure it will soon enough, as do Mercs with their cars, just look at the contract hire price on a C63 at the moment, customer of mine just paid £1500 down and 35 x £449 plus vat for one, he couldn't have bought one for cash and lost less over 3 years.

 

[Mudster]

The current 7 series has no deals on it right now, but I am sure it will soon enough, as do Mercs with their cars, just look at the contract hire price on a C63 at the moment, customer of mine just paid £1500 down and 35 x £449 plus vat for one, he couldn't have bought one for cash and lost less over 3 years.

This is the key with contract hire. You can't go into a garage and specify something bespoke and expect the Sale of the century on it.

You have to be flexible. With my company vehicles, as long as it's comfortable and presentable I'm not entirely bothered what they are. Even better if I can snag a deal on an outgoing model which is fully loaded with all the goodies at no more list price (therefore no P11d extra value).

So you ask, What's on offer and what can I get a good deal on? - Then make your choices.

The outgoing model is usually the best deals you'll ever see, they really shift some metal for silly money, it's how we ended up with a pair of Saabs for peanuts.

 

[gIzzE]

I don't accept the logic here. It's the same car whether they supply it as PCP or contract hire.

Maybe this is the point that needed explaining better??

It is of course the same car, however it is all about control, being able to have a handle on what happens to the product price wise.

If you look back at Mercedes last spring, spring 2009 I mean, Mercedes were upside down by £9m on residual values, and they had nearly 10,000 new C and E classes sat in fields.

Now what where Mercedes to do? What were their options with all those cars??
They could have offered them out to car supermarkets at a loss to get some money back in the coffers, they could have sold them onto dealers with a massive reduction too, however, this then devalues the cars already out there and sat on dealers forecourts overnight with huge fianancial consequences for the dealers, and annoying the customers who have just paid full whack.

It also means that come resale time in 2 or 3 years the dealers will have control and again could give poor buy backs base on the extremely low original purchase price.

So, Mercedes started to offer contract hire deals that were bordering on silly, not through Mercedes themselves but through third party brokers, I got 3 people into a C180k Estate for £599 deposit and £199 a month and 4 people into E220cdi's for £699 deposit and £229 a month.

There was over 1500 C180K's showing available in April and by May they were all gone, so this worked, they cleared those 10,000 cars sat in fields, they have money coming in over 2 and 3 years for them and at the end of teh term they have them back to do what they want with, they will be in control of the used market value and thus they won't be upsetting owners who are trading their 3 year old E220cdi that they bought.

Put it like this, the price of £229 a month for a new E220cdi was based on Mercedes needing to get £18k for that car, a new E220cdi was what? £30k, so a saving of £12k or 40%, if a dealer had sold that for £18k new what would he be offering after 3 years? £8-9k tops, why would he pay any more for the same car that someone had bought for £30k, or even £25k with a discount? He wouldn't he would be offering them the same and seriously pissing them off.

So, a lot of it is to do with keeping control.

 

[Rory]

So, Mercedes started to offer contract hire deals that were bordering on silly, not through Mercedes themselves but through third party brokers, I got 3 people into a C180k Estate for £599 deposit and £199 a month and 4 people into E220cdi's for £699 deposit and £229 a month.

Someone else who works in vehicle leasing explained this to us too a while ago, particularly as the manufacturers get towards the end of quarters and want to shift car and/or increase registration numbers.

The thing that baffles me, as a potential customer, is how do the leasing companies / brokers actively sell these deals to customers? It's not like you can 'phone someone up and get them to buy 10 cars in an end-of-quarter deal as if your were selling bags of coal - you either need a car (usually only 1) or you don't.

 

[gIzzE]

They sell them through the brokers, whether that is an individual who has a few customers they can call or online brokers like coast2coastcars, Ling cars, contracthireandleasing.com, leasecarsdirect.co.uk etc. etc. who have companies searching their offers.

 

[jonnyboy]

oooo just seen a stock q7 in correct spec for lease.....cheers Guy

 

[parksie]

I had this same issue last year when handing back my BMW 318, I was worried about the wheels, so got 2 refurbed at £40 ea, as BMW said it would cost £150 per wheel. I got some chips/scratches filled in by one of those mobile smart repairs and the inside fully cleaned (as having a cream interior and 2 toddlers is not really advisable)!!

BMW finance were obviously well pleased with the condition as they didn't charge me for going over the mileage limit by 4000 miles!!

On a side note, I was so p1ssed off with BMW, because the showroom where I bought the car from did not want to trade it for a newer car I wanted. So I told them they had lost my business and bought a B200 CDI and not looked back since!!

 

[hawk20]

I had this same issue last year when handing back my BMW 318, I was worried about the wheels, so got 2 refurbed at £40 ea, as BMW said it would cost £150 per wheel. I got some chips/scratches filled in by one of those mobile smart repairs and the inside fully cleaned (as having a cream interior and 2 toddlers is not really advisable)!!

On the subject of avoiding being overcharged for damage etc see this thread: -
http://www.mbclub.co.uk/forums/gene...back-leased-pcp-agility-cars.html#post1026037

 

[Simon_M]

OK, my car went back and I got a pretty heft bill.

Repairing this poorly touched-up chip on the drivers door was £292 They claim they need to totally respray the front and rear doors

Note the big blob is just rain water, and the small blobs - the paint chip is the central part

 

[C240Sport97]

it's completely unreasonable not to expect a paint chip or 2 on a 3 year old car .. have they not heard of reasonable wear and tear???