Need a push in the right direction

[Junz]

Hi guys,

I have been on/off recently when purchasing a bmw, im concerned over things like resale and reliability,as of late i came accross a deal which im not sure is worth it or if i should hold on until prices drop. Im a big fan of the F30 , i think its a stunning machine.

I have 40k deposit and 70k in savings ( using this a residual ) and hoping when i trade in one day i wont have to use my savings to pay my residual.

Option 1
. I was offered a msport 320i Estoril Blue with sun roof, automatic, xenons ,pdc rear and 19inch for R443k new. I have a settlement on my current car of 20k which bmw will absorb.


Option 2
Same as option 1 only difference it is white with 18inch rims ,pdc front and rear and msport brakes. cost is 428k and settlement of my car from bmw.

Option 3

320i sportline with pdc sun roof ,18 inch rims,auto. But no exeon lights .cost is 400k with settlement of my car from bmw.


Im planning on financing over 72 months and im worried when i get close to the end of my mp i might not get a good resale to cover my residual

I guess im looking for advice and guidance when purcahsing a bmw. This is my first BMW and i can finally afford one but dont want to regret my purchase down the line.

These are beautiful cars ...i drove a 125 for the weekend and fell in love.

 

[frikkieh]

Option 4 - buy one for R310k with Xenons
http://www.carfind.co.za/showroom_vehicle.aspx?Carid=2321816

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But you will like the 328i more :joy:
http://www.carfind.co.za/showroom_vehicle.aspx?Carid=2389562

419k

 

[Twinz]

Let me throw a curve ball at you:
With the settlement value on your current car (R20,000) - dont sell it. You can pay off this car in one year at a small HP. Then its yours for good. An investment if you like.

The second car: go for the residual that eases your monthly consumable income. Dont relegate on insurance and you good to go for a couple of years with your new cab. Residual payments are often misunderstood as a bad HP debt. But on a vehicle you want to pay as less on a monthly HP as you can since the car depreciates as fast as an M3 goes. On a "fixed" investment you want to pay a higher monthly HP premium to free the debt because the value appreciates not going down.

Just my reasoning. :thumbs:

 

[herr bmw]

pay off the R20 000 then the car is yours

personally wont buy a car over 72 months,always 54 months and try to put as big a deposit as possible.

also if i cant afford it then i dont buy it,rather save up towards the deposit and buy at a later stage

 

[frikkieh]

That's good advice T&C.
Problem is cars are so damn expensive these days.
If you don't put away (or spend) 6k per month on a car, you can forget looking at good finance options (paying less interest etc.)
There is always a good salesman around that can work out a "good deal".

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P.S. New cars apply

 

[herr bmw]

That's good advice T&C.
Problem is cars are so damn expensive these days.
If you don't put away (or spend) 6k per month on a car, you can forget looking at good finance options (paying less interest etc.)
There is always a good salesman around that can work out a "good deal".

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P.S. New cars apply

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never spent more than R3500 a month on a car
currently spending R2200 on my bm,also its the first time in my life that i have bought a car over R200 000,before that the most expensive car i bought was a fiesta for R120 000,took it over 36 months as well

 

[frikkieh]

never spent more than R3500 a month on a car

That means never finance more than R144 350 (@12% over 54 months). And the rest have to be cash.
Therefore no F30 will fit the bill...

 

[Twinz]

Herr...that monthly installment wont work on new bmws not even with a 45% residual.

 

[Junz]

Thanks for the great information guys,

My reasoning for 72 months is the lower interest rate (i got 8.5%) and it gives me a better cash flow at the end of the month (lower installment) and i can still pay extra when i have it.

I could put a 110k deposit, but opted for 40k deposit and a residual of 70 k which i have put into my bond until i need to sell the car and pay that residual amount. Im hoping that after 5 years or 100 000km i could sell it back to bmw without having to pay the residual. Eg. If i owe R120 000 at the end of 5years + 70 000 residual =190 000k , lets say bmw offers me 200 000k trade in.so il still have R10 000 surplus for a new deposit and my 70 000k that i put aside initially wouldnt have been touched. Hope that makes sense.

Can anyone predict what the resale could be for a 320i in 5 years time ?

 

[petrivanzyl]

Difficult to say, but my new 2007 e90 320d dropped from R320k to R140k in just over 5 years.

So a R440-420k car should be about R200k in 5 years?

 

[Junz]

@twins , i still owe ahefty amount on my wifes kia, the car im looking to trade in, the settlement different on what bmw offered is about 20k in need to pay in.

 

[petrivanzyl]

I estimated that the value of a car drop by about 55% in 5 years:

http://www.bmwfanatics.co.za/showthread.php?tid=31822

 

[Junz]

thanks Petrivanzyl , good read, im busy trying my hand at an excel calc to work out what my capital or settlement will be after 5 years , i post the spread sheet if i can get it to work

 

[Kish2604]

Nobody has a crystal ball that works,...:roflol:

My last 5 cars were paid in cash and I will buy my next 10 cars like that.. That's the way I like it and it works for me, so if I were n your shoes and could afford to put 7k a month on Car repayment I would seriously choose the ffg option,

1. Of the 7k budget I would take 5k each month and put it into a fixed investment over a period of 48 months(4 years)which at an 8% growth will mature at R281749, when the 4 years is up then use that as a deposit on Your dream car, and yes the f30 will be around then (it should be in the facelift spec)
2. Take the remainder 2k pm and together with your current car as a deposit settle on a good used e90 320i or 323i and finance that over 48 months with no residual and that car will be freehold when you ready for dream car time,
3. When you ready for the dream car you will have your investment amount of 280k liquid cash and an additional +- 70k on your e90 trade in leaving you to finance less than 50% of your next car... (That's if a new 3series will cost 700k in 4 years time)
4. No residual means less interest being paid on the deal and interest saved is interest earned,
5. Interests rates are not going to stay we're they are right now, be prepared for a long cycle of hyper inflation and high interest rates around the 15% mark.. Will the big debt be sustainable at that point Especially when considering the residual being added,

I am not putting you off your purchase if a dream, and believe me the peer pressure on this forum to own a legend (bmw) is hard to overcome :tease:

Disclaimer. If you on a company car allowance then it does change things slightly but the general idea I am trying to share still sustains itself..

Whatever you do, make the right choice..

 

[Jerez]

I can't advise you in finance options as that's between you and your wage slip.
I'm not sure why you are being offered the m sport brakes- Is this M sport with 18s/19s pushing over 400bhp and are you going to to track days which will warrant the better brakes OR are you having this option cos the calipres say m sport, if so- eliminate that option and just do the Estoril with graphite 19s- that will save u a few bob-Estotil was a classic colour

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Nobody has a crystal ball that works,...:roflol:

My last 5 cars were paid in cash and I will buy my next 10 cars like that.. That's the way I like it and it works for me, so if I were n your shoes and could afford to put 7k a month on Car repayment I would seriously choose the ffg option,

1. Of the 7k budget I would take 5k each month and put it into a fixed investment over a period of 48 months(4 years)which at an 8% growth will mature at R281749, when the 4 years is up then use that as a deposit on Your dream car, and yes the f30 will be around then (it should be in the facelift spec)
2. Take the remainder 2k pm and together with your current car as a deposit settle on a good used e90 320i or 323i and finance that over 48 months with no residual and that car will be freehold when you ready for dream car time,
3. When you ready for the dream car you will have your investment amount of 280k liquid cash and an additional +- 70k on your e90 trade in leaving you to finance less than 50% of your next car...
4. No residual means less interest being paid on the deal and interest saved is interest earned,
5. Interests rates are not going to stay we're they are right now, be prepared for a long cycle of hyper inflation and high interest rates around the 15% mark.. Will the big debt be sustainable at that point ESP when considering the residual being added,

I am not putting you off your purchase if a dream, and believe me the peer pressure on this forum to own a legend (bmw) is hard to overcome :tease:

Disclaimer. If you on a company car allowance then it does change things slightly but the general idea I am trying to share still sustains itself..

Whatever you do, make the right choice..

You speak of GROWTH and INVESTMENT in the same sentence in these times of austerity :roflol:

 

[frikkieh]

A friend of mine bought a new e90 320i in 2011. BMW guaranteed him an amount that I don't think I would pay for a two year old 320i. You would probably have to trade in sooner before it depreciates too much. A good BMW sales man can provide you with the most realistic ideas of what they are willing to offer you.:rollsmile:
Personally,
I am not willing to pay R35 000 more for a new one as opposed to one with the same spec, with 4500 km on the clock...same year. That is how quickly depreciate in value.
Therefore, I am a second hand customer. Bringing affordability a bit closer. ( hence my link post on the two 2nd hand models).

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thanks Petrivanzyl , good read, im busy trying my hand at an excel calc to work out what my capital or settlement will be after 5 years , i post the spread sheet if i can get it to work

Here is a neat calculator to give you an idea:
https://www.wesbank.co.za/partners/calculators/repayment.xhtml?siteID=fnb

 

[Jerez]

thanks Petrivanzyl , good read, im busy trying my hand at an excel calc to work out what my capital or settlement will be after 5 years , i post the spread sheet if i can get it to work

Junz.... Based on this comment I gather that you're a bit of a pragmatist and my advice would therefore be... Don't buy this car as you're going to start calculating the cars depreciation as you drive off the forecourt .
If you're a bit of a petrolhead and aspire to have one of the nicest machines BMW have built then buy a Getz for everyday use and keep the mint e46 M3 for weekend use

 

[Junz]

Eish you okes... :roflol:

Lets see what happens in the next few days. I bought my first car new and lost 86K in the first year so i know the feeling, iv always bought second hand ever since...until now

 

[Jerez]

Forget about depreciation.... You can't control that- have you heard of the abbreviation JFDI?

Anyhoo, it's your hard earned cash so make the decision which you are most comfortable with

 

[Kerrits]

I agree with keeping a rainy day fund, you never know what will happen.

Buying a new car is awesome, but I personally am a big fan of large deposits.
To me it makes no sense to say that paying a lot of interest is OK when the asset depreciates.

I would rather not pay the R50k interest on my car while my money earns R20k interest in the bank.

You are only young once, buy your dream car while you can (without financially ruining yourself)