Sad Ending.......bye bye BMW

[stevo555]

Maybe I'm venting here but unfortunately my relationship with BMW and their cars has come to an end. Hopefully this will also serve as a warning to others so you don't end up high and dry like yours truly here.
Have a 2006 Z4M Roadster (my 5th BMW in a row) that I bought new from a main dealer in April 2006 at a cost of just under £46k.
Wind forward the clock to now and have been trying to sell/part exchange it for a larger car (have a newborn and hence need 4 doors). I posted the car for sale a couple of times and also posted it on Pistonheads & Top Marques. Have had 2 -3 enquiries total (I realise that this is a specialised car and also the wrong time of the year). The sad statistics are:

car bought from new at £46,850 on Lease Purchase with a £23,000 balloon after 4 years.
Car now is almost 4 years old, fully loaded and with 15,500 miles on the clock.
Settlement figure: £27,000
Part Exchange value: £15,100


So, bottom line is that the car is £12k in negative equity. To hand the car back I would give them the vehicle PLUS £12,000. And walk away with f$$$ all. I don't know any sane person that would be willing to do that. However it's the situation that I'm faced with. There's no Guaranteed Future Value and no hand back clause. I've spoken to numerous dealerships (one dealer said that he'd never seen a worse situation) and also BMW Financial Services who basically said 'tough'.
I usually keep my cars (had 3 new ones in a row now-never again) 2 years and then trade up. However this situation has left me truly high and dry and feeling royally shafted.
So my only options are:
1. Try and sell the vehicle privately (I have to settle the agreement in June which is £23k), am even looking abroad in right hand drive countries such as Malta, get as much as possible and then pay the balance.
2. Take it up the obvious and give them the car plus £12k of my hard earned £££. Not good.

In any case I'm feeling so jaded by the whole deal that as soon as it's sorted I'm off to the land of four circles and see what Audi have to offer. I love BMW and their cars but this is just too much....

[Jonttt]

Stevo

I'm not sure exactly what deal you have with BMW but I have in the past (and know plenty of people who have also including my girlfriend recently) called in the little publicised but legitimate "hand back" clause.

So long as you have paid more than 50% of the credit agreement (including any set up costs etc....) you can just hand the car back and pay no more.

It should be in the "fine print" of any credit agreement and is called a "voluntary termination" or "VT".

It does not affect your credit rating but is recorded as a VT so car companies can take the hump if there are lots of VT's on your record.

Worth looking into as I know lots of people who have done this rather than carry on paying for a car when there are better deals out there.

You just inform BMW financial services that you are thinking of a VT and they confirm what if any the cost would be (normally its just any damage to the car + excess mileage, don't let them stuff you for alloys, they always try but its fair wear and tear so you just object and they drop it )

Worth looking into as it may apply to you (there is no way they ever "volunteer" to tell you about this but they are obliged to do it if you have a financial agreement under the consumer credit act )

[G2JRP]

Jontt

Totally agree with your comments we were advised by our local dealer to explore this route when I wanted to hand back my wifes BMW early. As you say BMW Financial services were not keen on looking at but when I did get them to look at it we had not paid 50% of the agreement, short term and high GFV.

Definately worth a try.

regards

[stevo555]

Thanks guys,

I'll definitely check into it but I think this may be the clause that was brought in a couple of years ago to protect consumers from such an eventuality. BMW Finances explained that this cluse came in for agreements of £25k and under in May 2006 (& therefore not applying to me) and for all other agreements from 2008.
Hopefully this will apply to me but am not holding out much hope to be honest. BMW Finances phrase was 'sorry but we can't help you' which went down well seeing as it's their agreement, and I thought customer retention was in their best interests. Not so it seems. Will speak to them and see what comes back. Fingers crossed. Cheers for the info though.

[Jonttt]

It will tell you on your agreement, don't rely on them

[estocks]

A 2006 Z4M is only worth £15k?

[Jonttt]

Trade yep

I was offered a 2006 Z4m roadster with 30k but NO run in service for £14k

Was actually tempted as out of warranty anyway but I can't get away with two cars with 2 seats

good examples are retailing for c£20k with full spec

Thats one hell of a hit if you paid >£40k 3 years ago.

But I ran an S320, cost >£60k after 2 years and 60,000 miles got £21k trade in (company car thank god!)

Thats why lots of people take out 4 year credit agreements on low miles, run for just over 2 years and hand the keys back under voluntary termination / pay the excess mileage. Works out a lot cheaper

[TrickyZ1]

I'm off to the land of four circles and see what Audi have to offer. I love BMW and their cars but this is just too much....

Wow, drastic measures indeed. It's such a shame that BMW "customer support" is so poor. I hope you find a solution that doesn't involve you having to drive around in an Audi

[badboyblue]

30% residual after 4 years seems a reasonable deal on a trade in TBH - seems to me like you didn't look into the deal before you signed, as those figures would never have worked.

[estocks]

I'm off to the land of four circles and see what Audi have to offer.

Front suspension made of chocolate and terrible quality control. I used to own one, and they are famous for being terribly built. BMW and Jag (post 2001) are where it is at for build quality. Don't forget, your grief is with the finance, not the vehicle.

[PooBear]

Insurance would cover the costs at all?

[crossyy]

Let me know how you get on as I have exactly the same problem with the same contract on one of my cars with BMW which comes to an end in August of this year. Not quite as negative as yours but will get about 18k on a 23k ballon so still 5k out of pocket. I also took mine out before the changes in the law so cant use the hand back clause and BMW Finance have also said tough and that I have to sell the car and give them the difference. My 7th BMW in a row, I think I must have spent about 200k with them in the last 10 years and now will never buy another one because of the attitude of BMW finance.

[Mike Fishwick]

60% depreciation after four years on a car with limited customer appeal does not seem unusual these days. Lots of 'normal' cars lose 50% in three years.

The more you pay, the higher the depreciation amount - it's a normal expectation.

I don't understand the details of leasing etc, but these systems were basically introduced to give an advantage to business users, by allowing them to set the cost against their tax, which is a pretty good way to buy a new car every few years.

It means that us ordinary tax payers have to come up with more tax to compensate the government for this lost taxation revenue - wish I could do that.

Perhaps if you factor in the fiscal advantages of the way in which you bought the car, it will look better.

Of course, you could always keep the Z4 and buy a runabout as a family car, or just use the Z4 - our daughter's first transport was an MGB-GT, and it didn't do her any harm. Of course, she isn't very tall, and is addicted to powerful cars, so one never can be sure . . .

[Hard Top]

I have always had a soft spot for the MGB-GT.

HT

[Dave L2]

I'm a little confused here.

Is Lease Purchase different to a Personal Finance Plan? I know several people who bought Z4Ms around the same time the OP did and got a similar deal. Once it was clear that the residuals on the Z4M were going to be rubbish BMW finance were begging to buy the cars back after only 2 years to minimise their loss on the GFV.

Also, is it not possible to refinance the baloon as it is with a PFP?