Thinking of buying an M140i Shadow Edition and need some PCP advice

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Mr Ed
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Thinking of buying an M140i Shadow Edition and need some PCP advice

Post by Mr Ed » Sun Sep 16, 2018 11:31 am

I know this topic has been discussed a lot in this forum, so apologies if I'm covering old ground.

My current car (2012 125D sports auto) is 6 years old at the end of this month. I'm thinking it's maybe time to move to a new car and the only one that really interests me is the M140i shadow edition. I drove a 3-series 330i before I bought my 1-series and loved the smoothness of the straight-6 engine.

My dilemma is whether I finance the car myself (part-exchange and loan) or go for PCP. I've never bought a car using PCP before and despite reading articles on numerous web sites, I can't decide whether I should look to buy new, using PCP or look for a nearly new approved car instead and finance it with a loan.

I generally keep my cars for 5-6 years (although maybe moving to PCP, I'd maybe look to change more often).

I realise there's a resident helpful sales person on these forums who is renowned for helping people get a good deal, but just wanted other people's thoughts and experiences.

From a financial perspective, large monthlies aren't really a problem, but if I could put a larger deposit down and reduce the monthlies, then that would be better. Some people say don't put a large deposit down as it's effectively dead money, although it does reduce the amount of interest paid. With interest rates so low at the moment, is that still a valid argument?

I specced up my ideal car on BMW's web site and putting in the maximum deposit, with mileage of 8,000 per year (I only do around 6,000 miles per year), over 4 years, I could get the monthlies to around £250.00. I didn't really pay too much attention to the dealer deposit but the APR was 4.9%.

The issue, I guess is that in 4 years time, unless I put money away, I'll then have no deposit, other than any equity left in the vehicle (which could be zero I guess) when I come to either choose to buy the car or trade to a different one.


Buying a new car using a loan isn't something I could easily justify as we're talking about a £37,000-£38,000 car, with mine in part exchange. Again, I'm led to believe that there are better PCP deals on new cars. I'm not sure is this is actually true or not.

There are a few 18-reg M140i shadow editions coming up around the £28,000 mark and the ones I've seen do pretty much have the spec I'm looking at, so financing a car at that price would be more "palatable"!

I'm hoping more knowledgable people on this forum can give me some good advice and help me make a decision on which way to go.

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Thinking of buying an M140i Shadow Edition and need some advice

Post by NISFAN » Sun Sep 16, 2018 11:53 am

When buying a car on PCP, it generally works out to be more cost effective to buy a brand new one. Reason being, you get manufacturer incentivised finance rates, a deposit contribution and more favourable final valuation (GFV). These make up a lot over a young used car.

Anyone saying deposit is dead money is an absolute brain dead moron (or a car salesman that wants to sell you another car next year). The more money you put into the deal, the less money overall you’ll pay, as you pay less interest. But as people generally get into the habit of buying to their monthly max limit, putting in a big deposit to lower the monthlies is too complex for their simple brains. The end up buying an even more expensive car, which bites them when they get to the end of the contract and find they can’t buy the same car again, they no longer have that large deposit they had last time.
If sensible, you use the large deposit to lower the monthlies, and ‘save’ the additional amount each month that the deposit reduced your payment by. This becomes your next deposit.

The auto industry seems to be pushing PCP very strongly, so you tend to get the best APR on PCP, which makes it better than the HP deals.




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Re: Thinking of buying an M140i Shadow Edition and need some advice

Post by stevei » Sun Sep 16, 2018 12:59 pm

I've just bought a 420i on PCP.
Am I right in thinking that a lower MGFV is better as there is more chance of having some equity?
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Re: Thinking of buying an M140i Shadow Edition and need some advice

Post by msej449 » Sun Sep 16, 2018 1:01 pm

I bought my previous 330d xDrive Touring on a dealer finance package, but my current car was a cash purchase, initially using my offset mortgage but paid off in 2 years. So the answer is, 'it depends'.

Overall, I saved about £4100 over 3 years paying up-front cash financed by the offset, compared to any financing equivalent. My offset mortgage effectively gave me a 1.9% interest rate, while the best interest rate from the financing on offer was never less than 2.9% (and that meant a big down payment, which rather negated the point of financing).

So my advice is to build a realistic baseline model of cash up-front financed by a cheap loan (especially if you have access to low rate loans), and then use that as the basis for comparison. As a discipline, I set myself the target of paying-off the capital loan within 36 months, even if the ownership/comparison period was longer. In the end, I paid off the capital sum in 26 months.

Finally, if you do buy up-front cash, I'd recommend getting gap insurance, which for what it is seems very good value. Otherwise you'll not be able to afford to replace as new if your wholly-owned car is written-off and the insurance valuation means there's a gap.

PCP isn't magic. All other things being equal, financing is always more expensive than paying cash up-front. It has to be, because you pay more to borrow money than you lose in interest on cash. But of course, if your personal cost of borrowing is high, then that's a factor. Or you may be an investment wizard and can make 20% on your cash. Or you may value some element of the contract, such as an option to buy at a preset price at the end of the term etc. But any arrangement that finances something you couldn't otherwise afford needs to be scrutinised carefully (e.g. the point made above that if you have a trade-in car the first time 'round, you don't subsequently). Of course, most people buy their home on a 25+ year timescale without anything like the funds to 'afford' it up-front: the difference is that homes appreciate (well, usually) but cars depreciate.
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Re: Thinking of buying an M140i Shadow Edition and need some advice

Post by moulin12 » Sun Sep 16, 2018 2:44 pm

Some good input and advice above. I'd just note that a new car with some decent options would be nearer 30K, as 20% discount on new is available. So beware the dealer flogging a nearly new car at only 20-25% off list and who says you're getting a bargain.
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Re: Thinking of buying an M140i Shadow Edition and need some advice

Post by Daaaavvveee » Sun Sep 16, 2018 3:03 pm

If you move quick you can secure one on a 1.9% deal, several dealerships still have cars.
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Re: Thinking of buying an M140i Shadow Edition and need some advice

Post by Mr Ed » Sun Sep 16, 2018 3:31 pm

moulin12 wrote:
Sun Sep 16, 2018 2:44 pm
Some good input and advice above. I'd just note that a new car with some decent options would be nearer 30K, as 20% discount on new is available. So beware the dealer flogging a nearly new car at only 20-25% off list and who says you're getting a bargain.
Agreed. Some excellent advice and thank you to everyone who's commented.

Are you saying that even a high specced car could be available for around the £30,000 mark? Is this only available using PCP or if I decided to get a loan and pay cash?

Presumably there aren't any main dealers offering these discounts? What are people's experience of using third party car companies? Coast-2-Coast is a name I've seen mentioned on here before. Presumably, you have to make absolutely sure you specify every option you want correctly as I'm guessing there are no showrooms as such?

How easy are they to deal with and are there any things to watch out for?

Again, thank you for all the advice.

One thing I'm struggling to reconcile in my own mind is that I've spent quite a bit this year on front pads and discs, rear pads, 2 new rear tyres and a full service. The main reason for looking to switch is that I have a couple of albeit small, intermittent issues with the car and I'm loathed to spend more money getting BMW to troubleshoot and fix them. I can live with them, but I'm concerned other problems might start to creep in. The car's only done around 35,500 miles which I guess is bad for a diesel!
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Re: Thinking of buying an M140i Shadow Edition and need some PCP advice

Post by NISFAN » Sun Sep 16, 2018 3:47 pm

When you use BMW finance, you get what they call a “deposit contribution”. You won’t get this if you use cash or your own finance company.

Whilst people talk about 20+% discount, that includes the deposit contribution. The dealer themselves can only give around 12-15% on their system.

C2C is only a broker, once you decide to go with them you will be passed onto the bmw dealer that supports the C2C offer and go through the normal ordering system you get from going to any bmw dealership. You can change spec etc.

Good luck


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Re: Thinking of buying an M140i Shadow Edition and need some advice

Post by moulin12 » Sun Sep 16, 2018 7:52 pm

I'm simply saying that a decently spec'd 5 door with an automatic gearbox would be around 30K. If you ticked just about every available option (sunroof, led adaptive, memory seats etc) it would be around 34.5K.

On a decently spec'd new car you can get around 8K off, so that needs to be factored into a decision on a price being of offered on a nearly new car.

As above, the discount comes from a combination of dealer discount and finance contribution. Dealer discounts are in the range quoted. The finance contribution requires taking out PCP which you commit to when buying (picking up) the car. You can gain from the finance contribution but remove yourself from the agreement in one of two ways: 1. cancel the contract within 14 days (cost will be a 2-3 quid per day interest) or 2. terminate the contract at any time after 14 days (small termination cost and minimum of 1 month's interest payment). Simply ring BMW finance and give them your debit card details - no fuss, no hassle. Plenty of people have done this, including myself on my BMW car and motorbike.

Whilst not every dealer will give you a 13% discount rate, you'll find a number that will, especially if they know you're serious and you're armed with a C2C quote. The discount rate should minimally apply to base price + options. Some dealers will also apply the dealer discount to OTR costs and extras such as service packs (mine did).

Regards C2C, as has been said, they'll put you in touch with dealer. This might not always be in your immediate locality. It depends on how you feel about that. As said, you could always look for a more local dealer to price match instead. There's no catch with C2C really - they simply stick on a small commission (around £350 I think) for introducing you to the main dealer.

Have a look at this recent thread viewtopic.php?f=63&t=113709&p=1433081#p1433081

The real gotcha here will be your current car. If you're looking to trade-in then dealers may have you over a barrel by giving you a low-ball offer on the current car. The only answer there is to be armed with knowledge on what a fair trade-in price would be or else sell privately.
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Re: Thinking of buying an M140i Shadow Edition and need some advice

Post by GingerOtter » Tue Sep 18, 2018 11:23 pm

stevei wrote:
Sun Sep 16, 2018 12:59 pm
I've just bought a 420i on PCP.
Am I right in thinking that a lower MGFV is better as there is more chance of having some equity?
A high GFV means less money paid each month, but potentially no equity or a high final balloon payment if you want to keep it.

A low GFV means potentially higher monthlies but a lower final purchase price and maybe some equity but you might end up paying interest on money you don't need to because your still paying interest on any equity built up (unless on a 0% deal).

Anyway it depends on what you want to do at the end. If keeping the car then a low GMFV could make it easier to pay the final balloon payment. If it’s in good condition and IF the car is worth more than the GMFV (not always) and your hoping to use the difference for a new PCP then lower is better.

If wanting to literally have the car for 3 years then give it back and put in a new deposit for a new car without relying on any equity then that could be better because you may have paid less interest.

Each PCP deal varies based on person and there isn’t a hard or fast rule. The GMFV is also based on loads of variables depending on model, mileage etc. For example someone on a low GMFV deal may change jobs and go over mileage limit which is expensive and lose any equity whilst potentially paying more interest. Or those with a diesel may find their car value is less than the GMFV and have no choice.
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Re: Thinking of buying an M140i Shadow Edition and need some PCP advice

Post by NISFAN » Wed Sep 19, 2018 10:44 am

GingerOtter wrote:
stevei wrote:
Sun Sep 16, 2018 12:59 pm
I've just bought a 420i on PCP.
Am I right in thinking that a lower MGFV is better as there is more chance of having some equity?
A high GFV means less money paid each month, but potentially no equity or a high final balloon payment if you want to keep it.

A low GFV means potentially higher monthlies but a lower final purchase price and maybe some equity but you might end up paying interest on money you don't need to because your still paying interest on any equity built up (unless on a 0% deal).

Anyway it depends on what you want to do at the end. If keeping the car then a low GMFV could make it easier to pay the final balloon payment. If it’s in good condition and IF the car is worth more than the GMFV (not always) and your hoping to use the difference for a new PCP then lower is better.

If wanting to literally have the car for 3 years then give it back and put in a new deposit for a new car without relying on any equity then that could be better because you may have paid less interest.

Each PCP deal varies based on person and there isn’t a hard or fast rule. The GMFV is also based on loads of variables depending on model, mileage etc. For example someone on a low GMFV deal may change jobs and go over mileage limit which is expensive and lose any equity whilst potentially paying more interest. Or those with a diesel may find their car value is less than the GMFV and have no choice.
You are confusing people with your references to interest.

For clarity the amount of interest you pay is the same regardless of differences in GFV. You pay interest on the entire balance of the contract value after your deposit. That includes the final balloon or GFV value.

Regarding the GFV figure, this is set by BMW finance and cannot be manipulated for a set deal. You can change the basis of the deal to get a different GFV (term or mileage allowance mainly) but the GFV is typically very accurate to the cars final value. If you look after the car, no wheel curb marks, no dents, etc then you should have some equity. Excess mileage, and scuffs/poor condition and it could be worth less.


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Re: Thinking of buying an M140i Shadow Edition and need some PCP advice

Post by garysan » Wed Sep 19, 2018 11:08 am

The way I worked things out regarding the PCP deals/offers I managed to negotiate on my two cars was taking deposit+ballon+monthlies (47 in my case) all into account and adding them up to see the absolute total I would pay over the full term. On the Mini Cooper SD, it was over £1,500 less then if I'd have paid cash money for the car which is effectively 0% AND £1,500 off.

The M135i was/is still a bit less then an outright purchase but not as good as the Mini deal - guess I was a bit more experienced\savvy as it was the second time around the block for me when I got the Mini.
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Re: Thinking of buying an M140i Shadow Edition and need some PCP advice

Post by GingerOtter » Thu Sep 20, 2018 10:06 am

NISFAN wrote:
Wed Sep 19, 2018 10:44 am
GingerOtter wrote:
stevei wrote:
Sun Sep 16, 2018 12:59 pm
I've just bought a 420i on PCP.
Am I right in thinking that a lower MGFV is better as there is more chance of having some equity?
A high GFV means less money paid each month, but potentially no equity or a high final balloon payment if you want to keep it.

A low GFV means potentially higher monthlies but a lower final purchase price and maybe some equity but you might end up paying interest on money you don't need to because your still paying interest on any equity built up (unless on a 0% deal).

Anyway it depends on what you want to do at the end. If keeping the car then a low GMFV could make it easier to pay the final balloon payment. If it’s in good condition and IF the car is worth more than the GMFV (not always) and your hoping to use the difference for a new PCP then lower is better.

If wanting to literally have the car for 3 years then give it back and put in a new deposit for a new car without relying on any equity then that could be better because you may have paid less interest.

Each PCP deal varies based on person and there isn’t a hard or fast rule. The GMFV is also based on loads of variables depending on model, mileage etc. For example someone on a low GMFV deal may change jobs and go over mileage limit which is expensive and lose any equity whilst potentially paying more interest. Or those with a diesel may find their car value is less than the GMFV and have no choice.
You are confusing people with your references to interest.

For clarity the amount of interest you pay is the same regardless of differences in GFV. You pay interest on the entire balance of the contract value after your deposit. That includes the final balloon or GFV value.

Regarding the GFV figure, this is set by BMW finance and cannot be manipulated for a set deal. You can change the basis of the deal to get a different GFV (term or mileage allowance mainly) but the GFV is typically very accurate to the cars final value. If you look after the car, no wheel curb marks, no dents, etc then you should have some equity. Excess mileage, and scuffs/poor condition and it could be worth less.


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I agree but any equity in the car isn’t a real term amount that’s all I’m saying. So £2k equity isn’t really £2k.

And GMFV is manipulated all the time by the finance dept. - on my 140 they fluctuated it by £3k as they tired to make the numbers work for them even though it was on the same monthlies and deposit I was prepared to pay.
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Re: Thinking of buying an M140i Shadow Edition and need some PCP advice

Post by NISFAN » Thu Sep 20, 2018 10:25 am

GingerOtter wrote:
I agree but any equity in the car isn’t a real term amount that’s all I’m saying. So £2k equity isn’t really £2k.

And GMFV is manipulated all the time by the finance dept. - on my 140 they fluctuated it by £3k as they tired to make the numbers work for them even though it was on the same monthlies and deposit I was prepared to pay.
The equity is as real as the price guide in Parker’s blue book, is it guaranteed? No, it depends on the colour, condition, spec, etc, but it is reasonably accurate indicator for an average vehicle of that spec. So if on paper you gave £2k equity in your car, are you going to get £2k out? Roughly, yes, it might be £1700-2300 but around those numbers provided there is no market changes that affect the general value of used cars.

The dealer has some tricks he can apply to manipulate the GFV, but BMW finance do not. As I said, changing the term or mileage or (little effect) the specification can affect the GFV, but they are BMW finance set figures for those inputs and cannot be adjusted.
For clarity, every 140i bought on an 8k per year/ 48 month contract on the same day, will have the exact same GFV all up and down the country. The dealer cannot influence that fact.
Occasionally the GFV gets recalculated if market conditions change, but that is not something buyers or dealers would be able to forecast.


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