Finance Question

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cookie1892
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Finance Question

Post by cookie1892 » Wed Jun 20, 2018 9:19 am

Hello All

Sorry if this is in the wrong place but I have a question that is troubling me

I have a 15 month old M140i on finance that I have had since new

problem is, ive already done 24000 miles in it and I am worried that because I am way over my stated mileage that when I want to hand it back and upgrade I am going to be massively stung

Any advice or knowledge on here?

JCM140
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Re: Finance Question

Post by JCM140 » Wed Jun 20, 2018 9:22 am

I would have thought that the cost per mile over the limit would be stated in your paperwork from BMW Financial Services. Should be an easy calculation to see what it would cost you if you continued accumulating mileage at your current rate.

EDIT: A letter
Last edited by JCM140 on Wed Jun 20, 2018 9:40 am, edited 1 time in total.

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Uncle Tupelo
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Re: Finance Question

Post by Uncle Tupelo » Wed Jun 20, 2018 9:37 am

There are a few options, but all will have a financial impact which might be lessened by contacting BMWFS and arranging for a new monthly payment which more accurately reflects your real world usage.


1. If you hand the car back at the end of the agreement, the over-mileage charge mentioned by JCM140 above will kick in - see your agreement paperwork.
2. If you trade the car in, it will be worth less than the GFV by (very approximately) 1% for each 1000 miles over the agreed mileage.
3. If you sell the car, it will be worth less - pretty much as 2. above.
4. If you VT the agreement at the 50% point, over-mileage charges will apply as with 1. above.
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Kerr
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Re: Finance Question

Post by Kerr » Wed Jun 20, 2018 1:00 pm

24,000 miles in 15 months is a good amount of usage.

How long is your finance and how many miles have you agreed to?

A quick Google suggests about 9 pence per mile is the cost for additional mileage.

If you've signed up for 4 years at 8000/10000 for 4 years and carry on at that mileage you'll owe a lot of money if you hand the car back. The car will also be worth far less than the GFMV if you trade it in.

Depending on your agreement this could hit you for around £4000.

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Re: Finance Question

Post by ellingtj » Wed Jun 20, 2018 6:25 pm

Uncle Tupelo wrote:
Wed Jun 20, 2018 9:37 am
There are a few options, but all will have a financial impact which might be lessened by contacting BMWFS and arranging for a new monthly payment which more accurately reflects your real world usage.


1. If you hand the car back at the end of the agreement, the over-mileage charge mentioned by JCM140 above will kick in - see your agreement paperwork.
2. If you trade the car in, it will be worth less than the GFV by (very approximately) 1% for each 1000 miles over the agreed mileage.
3. If you sell the car, it will be worth less - pretty much as 2. above.
4. If you VT the agreement at the 50% point, over-mileage charges will apply as with 1. above.
4 is not strictly correct, over mileage charges are not a feature of voluntary termination. As long as the vehicle is in good condition then mileage charges are not enforceable. However, if you wish to use BMWFS again then a VT will make you look less attractive especially if they had to swallow an over mileage.
https://www.thecarexpert.co.uk/car-fina ... on-pcp-hp/

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Re: Finance Question

Post by ASB1960 » Wed Jun 20, 2018 7:28 pm

I do not believe the excess mileage has not been tested in court. There is some body of opinion that if the contract is correctly drafted (and they have changed in recent years) that the excess mileage may be enforceable.

There is a 6 year period of waiting for a claim if you resist.

In my case when i vt'd something there was an excess mileage calculated at around 500. After about 6 months of squabbling it was settled at less than half that.
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Uncle Tupelo
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Re: Finance Question

Post by Uncle Tupelo » Wed Jun 20, 2018 9:16 pm

ellingtj wrote:
Wed Jun 20, 2018 6:25 pm
Uncle Tupelo wrote:
Wed Jun 20, 2018 9:37 am
There are a few options, but all will have a financial impact which might be lessened by contacting BMWFS and arranging for a new monthly payment which more accurately reflects your real world usage.


1. If you hand the car back at the end of the agreement, the over-mileage charge mentioned by JCM140 above will kick in - see your agreement paperwork.
2. If you trade the car in, it will be worth less than the GFV by (very approximately) 1% for each 1000 miles over the agreed mileage.
3. If you sell the car, it will be worth less - pretty much as 2. above.
4. If you VT the agreement at the 50% point, over-mileage charges will apply as with 1. above.
4 is not strictly correct, over mileage charges are not a feature of voluntary termination. As long as the vehicle is in good condition then mileage charges are not enforceable. However, if you wish to use BMWFS again then a VT will make you look less attractive especially if they had to swallow an over mileage.
https://www.thecarexpert.co.uk/car-fina ... on-pcp-hp/
The Financial Ombudsman has already found against someone who tried to avoid over-mileage charges when VTing.

http://www.ombudsman-decisions.org.uk/v ... leID=65660
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Re: Finance Question

Post by ASB1960 » Wed Jun 20, 2018 10:11 pm

That decision becomes binding on the parties I believe. But from a legal perspective does not set precedent.

If one were determined to challenge the only way would to be sit it out until the finance company launched a court claim.

This is, in fact, a no lose option. Provided one complied with the pre action protocal there is no risk of costs - it should be allocated to the small claims track.

Were the case lost lost there is no risk to credit rating provided the judgement were settled in 30 days.

But it would be a daunting prospect.
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Uncle Tupelo
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Re: Finance Question

Post by Uncle Tupelo » Wed Jun 20, 2018 10:17 pm

Personally, I'd be happy to see it tested in court and the over mileage charges found to be reasonable. I'm not sure why anyone would expect other customers to subsidise the cost of their high mileage.
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Re: Finance Question

Post by ASB1960 » Wed Jun 20, 2018 10:30 pm

I agree.

I think it should be found reasonable. I can see a legitimate question over whether the allowance should be pro rated or taken to term.

The lender is taking market risk in terms of residuals - and charges you a high APR to compensate. They are not taking risk for the hirer not keeping to their side of the bargain in terms of use.

Nevertheless clarification through the judiciary is the only way to fully resolve the conflict.

Edit: there is also a question mark in the process. In my case it was a peugeot. It was punted off to some firm in leeds who clear them. There is an argument about contractual nexus since the bill came from the clearers not the finance company.
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Re: Finance Question

Post by Spud1 » Thu Jun 21, 2018 8:26 am

If you are actually looking to trade in your car rather than handing it back to the finance company (which it sounds like you are if you are buying another car) then the excess mileage does not matter one bit. All it will mean is that your car is worth slightly less than it would if it had less miles, just like if you were selling a car that never had a limit :)

You will likely find that most dealers will just hide that difference by giving a slightly smaller discount on the new car though, so you probably won't notice. I wouldn't worry about it, the difference will by tiny.

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Re: Finance Question

Post by NISFAN » Thu Jun 21, 2018 9:47 am

Spud1 wrote:If you are actually looking to trade in your car rather than handing it back to the finance company (which it sounds like you are if you are buying another car) then the excess mileage does not matter one bit. All it will mean is that your car is worth slightly less than it would if it had less miles, just like if you were selling a car that never had a limit :)

You will likely find that most dealers will just hide that difference by giving a slightly smaller discount on the new car though, so you probably won't notice. I wouldn't worry about it, the difference will by tiny.
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Re: Finance Question

Post by marco_polo » Thu Jun 21, 2018 9:53 am

Agreed, 'hiding' £4,000 is trickier than you'd think Spud!
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Re: Finance Question

Post by Uncle Tupelo » Thu Jun 21, 2018 10:48 am

And there's a great danger that people become "serial offenders" in this regards, carrying forward (and refinancing) negative equity on car after car over the years, slowly building up a massive "hidden" debt. It's not a good idea.
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Re: Finance Question

Post by ellingtj » Thu Jun 21, 2018 10:57 am

Uncle Tupelo wrote:
Wed Jun 20, 2018 9:16 pm
ellingtj wrote:
Wed Jun 20, 2018 6:25 pm
Uncle Tupelo wrote:
Wed Jun 20, 2018 9:37 am
There are a few options, but all will have a financial impact which might be lessened by contacting BMWFS and arranging for a new monthly payment which more accurately reflects your real world usage.


1. If you hand the car back at the end of the agreement, the over-mileage charge mentioned by JCM140 above will kick in - see your agreement paperwork.
2. If you trade the car in, it will be worth less than the GFV by (very approximately) 1% for each 1000 miles over the agreed mileage.
3. If you sell the car, it will be worth less - pretty much as 2. above.
4. If you VT the agreement at the 50% point, over-mileage charges will apply as with 1. above.
4 is not strictly correct, over mileage charges are not a feature of voluntary termination. As long as the vehicle is in good condition then mileage charges are not enforceable. However, if you wish to use BMWFS again then a VT will make you look less attractive especially if they had to swallow an over mileage.
https://www.thecarexpert.co.uk/car-fina ... on-pcp-hp/
The Financial Ombudsman has already found against someone who tried to avoid over-mileage charges when VTing.

http://www.ombudsman-decisions.org.uk/v ... leID=65660
This I had not seen, but it does raise the question of how a strict legal interpretation would look in court?

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