X3 ///M said:
MikeR said:
:thumbs: @MINIMIKE :thumbs: thats what is happening,
:fencelook: guys dont read what cars are being advertised on the net for (ie AUTOTRADER) they are not selling at those prices.
Then why is it that cars are advertised for example. A 740i. For R 179.999 but if you want a deal it can be loaded upto R314 000 and approved by the bank. Banks don't just uprove any deal they won't finance a car if it is being sold for above book values .
Where is all the devaluation motorplan story then ?
Car Finance + Personal Loan. No bank, I repeat, no bank would approve a deal on any car like that. so dont know where you heard that. Pre the new credit laws etc yes, you could load any deal and they would approve it as banks were giving loans to everyone and everything, but we have the recent recession to thank for that.
I give you an example, we had two Hampton Cooper S Clubmans, limited edition models and hugely expensive, since I specced them full house, literally every option ticked.
These cars were priced at R480k each. Retail on a standard Clubman S is R290 000. Because of the Hampton Limited Edition Package (Something the banks have no clue of) the prices of these Clubmans rocketed.
We had two clients apply for finance with the banks, all of their applications were declined. The only bank, if it can be called that which would finance those cars was MINI Finance, why? Because they know its a limited edition.
Same applies with the trade value of a John Cooper Works MINI... It doesnt have one, so you pay a R150k premium to get the limited performance model and at trade time I kid you not they base your cars value off that of a Cooper S + R25k. Money gone!
You can load a deal... For example take a R300k BMW 3 series. The car has R40k trade assistance and R30k trade in assistance and a R20k margin. So you have R90k to make a deal happen and these figures are real by the way...
The client cannot get approved on a R300k car. So BMW then takes the R40k trade assistance and uses it as a deposit. Instantly the banks reconsider and they approve the loan. Then the client says payments are too high... So they add R30k to the customers trade in either settling it or improving their deposit and thus affordability further. And then, if they really need to the sales-person who gets a fixed comm per car he sells may chuck in R15k of his margin to ensure you sign that OTP.
So yes... You can make a R300k a R390k car on paper just by fooling with the assistance BMW offers. But to the banks you can also make a R300k car and a client who cant afford it look like a R210k car. Thats the definition of loading a deal.
No bank will approve a loaded deal where the total Invoice amount is higher than their recommended retail price for that vehicle and its extra's.
Devaluation on a BMW Motorplan is simple. It works like this... In order for BMW to sell you an Approved used vehicle it has to pass a quality check which the dealer pays R2k for from the cars margin. Any issues in the quality check must be rectified before delivery of the vehicle.
Furthermore, to qualify as an approved used vehicle the car must have a minimum of a year or 25 000km outstanding before Motorplan expires, if the vehicle does not qualify it must be sold as pre-owned and without the Approved status or the dealer must pay for the Motorplan extension.
To extend plan by time is cheap, its extending by mileage that is a problem. You want to trade in a 1 series... Its got 95 000km on the clock and 2 years plan left. To keep that car on their floor bmw will have to pay R25k to extend the plan... But the trade/retail difference leaves you with only a R20k margin if you give the client what the car is worth on paper... So thats when you start getting R5k below trade, then lets say it needs tyres, this must be accounted for... In order to be sold as approved used it needs to go for an approved valet, thats R750, the mag wheels need to have NO scratches or buckles so thats R2280 for full refurbishment, the vehicle may have no scratches itself, or paint defects and in order to extend motorplan it needs to be repaired by a BMW approved panelshop... They charge R4500k for a bumper!
So your 1 series has a trade of R200 000 and Retail of R230 000 now remove the above costs and you end up with a trade in value of well below R170k straight away... But, BMW dont want a 95 000km car on their floor, nobody will buy it! So they cut their losses and they offer your one series to the trade... The trade will offer R150k max and bham just like that you lose money just by trading ina car with motorplan too late.
Motorplan is a savior but if you do not understand the implications it has to extend etc then you will lose money! I dealt with far too many clients bringing in 320i E90's with 95 000km on the clock with under a year of plan left who couldnt understand why they were offered 30k under trade (just to extend that plan) or even less than that because the dealer doesnt want the car.
Hope it makes sense?
Mike
wtf
