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APRS
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Went to see the new F30 3 series yesterday, which was nice enough but once again was drawn to the F10. So had a semi-serious chat regarding finance.

New one is 4% or thereabouts, and thanks to the current offer is £368 per month over 4 years and 48k miles. But I think the low APR is fairly common for new cars as Mercedes have quoted similar for the W212 E Class.

But the used deals are a lot more...12% APR for example, so on the deals that I am looking at, the new one is basically cheaper by £170 pcm. Anybody got an idea as to why the APR for used is three times that of new? Is it just to cover the lower residuals or what?

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BMW Car Magazine @QuentlyBentin

I've noticed this as well and don't understand it at all. Volkswagen and Audi seem to have the biggest differences.

I can only think of 2 reasons, the need/ desire to shift new cars, or the ability to allow significant room for negotiation on a used car.

Manufacturer incentives.

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Jobbo said...

Rev is correct, of course

Crazy. I got 0.9% on my E60 from the dealer, the same as I got on the last one which was new. I guess Murkans don't bend over so easily :D.

Your confusion at basic economics Shocky D does not suprise, given your purchase history!

Manufacturers tend to be keen to sell their products. It helps come accounts time.

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Cheers,
Mike

Subsidised by manufacturer new car sales shocker :D

Should probably have pointed out that both new and used deals came from the same franchised dealer. I did wonder whether perhaps it was due to the incentives for new sales, but in terms of purely shifting stock, it does the used sales staff no favours.

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BMW Car Magazine @QuentlyBentin

Why buy a depreciating asset when there are some very, very attractive lease deals available. No need to worry about discounts off new or resale values.

Use it, abuse it & return the keys. ;)

McSwede said...

Why buy a depreciating asset when there are some very, very attractive lease deals available. No need to worry about discounts off new or resale values.

Use it, abuse it & return the keys. ;)

Unless they bum you come return time...

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Cheers,
Mike

I suppose "abuse" is open to all sorts of interpretation.

My meaning was to cane it mercilessly rather than bounce it off stationary objects. Although the latter may occur whilst the former is taking place :lol:

I suspect the APR isn't the main reason for the price difference. Higher GFV, dealer contribution to deposit to consider on a new one, whereas used its simply price paid vs price sold for; no special offers, just supply and demand.

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JL said...

Oh b*llocks you're right

Jobbo said...

I suspect the APR isn't the main reason for the price difference. Higher GFV, dealer contribution to deposit to consider on a new one, whereas used its simply price paid vs price sold for; no special offers, just supply and demand.

Spoke to the dealer this morning - he called to confirm the costs - so I asked him direct. He confirmed it was subsidised by BMW to move metal and the lower APRs along with dealer contributions and higher residuals are there to shift new cars. They don't give a toss (BMW, that is) about the used market. Just seems a bit strange to have such differences evident from the same garage but hey ho, preferred to ask.

So I reckon a 520d SE will be seriously looked at. If not now then when their offer is next available.

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BMW Car Magazine @QuentlyBentin

Basically that doesn't mean they don't want to sell the used cars, they just don't want to finance them.
So for them a used car should be paid cash (but I suppose you could borrow money from a bank at better conditions than 12% - maybe 5% or 6%?) or they will inflict you a ridiculous APR.

Updated November 28, 2012 at 12:42 PM

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Pilouil
Citroen C3 1.4 HDI 69.0424 bhp

I was just looking at a lightly used £25k M3 Saloon on the BMW dealer search and I could without really trying better their quoted finance figures by £102/month.

Not very competitive!

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Tim

Toyota. Flat Cap. Grey Slacks. Slipons. Slower than everyone.

Used cars are pretty cheap so most will just pay cash so it doesn't really matter.

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How about not having a sig at all?

Mito Man said...

Used cars are pretty cheap so most will just pay cash so it doesn't really matter.

isnt it time for your nap?

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Cheers

Rich

The higher GFV on a new one doesn't really benefit the customer unless it's so high that it's inevitable you'll give it back. In which case, you should just lease anyway.

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JL said...

Oh b*llocks you're right

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