[danb]

After a long running problem with my clutch (see here), the dealer agreed rejection and the car was ordered about two weeks ago, and turned up at the dealer on Friday.

The rejection was agreed on the principle that I had to make a £1,500 contribution, due to mileage and age. When we started going through the figures over the phone on Friday, I thought it sounded like I was loosing more than the £1.5k. I started going over the figures yesterday, and there are a few things I wanted to check with other people who have rejected their car.

Firstly, the car was on finance (5 year standard HP). So far I have paid about 2.4k off the loan, but the settlement figure was about 1.4k less than the original loan - which is what I was expecting due to interest. But is it usual for the customer to have to incur this cost on a rejection?

Secondly, I have an Aero Kit on my car - which they informed me was no problem as long as I fitted the new one myself (as they didn't fit the original). On the invoice they have put this down at £1280.
The original invoice price of my car was £20,817, without the aero kit - so £22,097 at the price Castle are quoting for the aero kit.
The dealer are paying £15,500 as a p/x price, BMW UK are paying £4760, and I am paying £1500 - this comes to £21,760.
Am I right in saying that BMW need to put more money in, or am I missing something somewhere?

Thanks

[mini_jim]

Quote: Originally Posted by danb (original)

After a long running problem with my clutch (see here), the dealer agreed rejection and the car was ordered about two weeks ago, and turned up at the dealer on Friday.

The rejection was agreed on the principle that I had to make a £1,500 contribution, due to mileage and age. When we started going through the figures over the phone on Friday, I thought it sounded like I was loosing more than the £1.5k. I started going over the figures yesterday, and there are a few things I wanted to check with other people who have rejected their car.

Firstly, the car was on finance (5 year standard HP). So far I have paid about 2.4k off the loan, but the settlement figure was about 1.4k less than the original loan - which is what I was expecting due to interest. But is it usual for the customer to have to incur this cost on a rejection?

Secondly, I have an Aero Kit on my car - which they informed me was no problem as long as I fitted the new one myself (as they didn't fit the original). On the invoice they have put this down at £1280.
The original invoice price of my car was £20,817, without the aero kit - so £22,097 at the price Castle are quoting for the aero kit.
The dealer are paying £15,500 as a p/x price, BMW UK are paying £4760, and I am paying £1500 - this comes to £21,760.
Am I right in saying that BMW need to put more money in, or am I missing something somewhere?

Thanks

We got a replacement for our car - like for like and did NOT have to contribute towards depreciation. IF we wanted a refund they were going to deduct 15p per mile + road tax, delivery and fuel. We went for the replacement & ONLY paid for a few more extras... Stand your ground and get the same deal; MINI have now set a precident!

Cheers

JIm

[danb]

I have already agreed the £1.5k contribution so I can't argue that now - the car is 7 months old with 12k miles so its not too bad. I'm more bothered about the 1k I'm loosing on the finance, and the 300 odd quid short that the contributions are.

[danb]

Well, Castle have agreed to reduce the price of the Aero Kit by £330 to pull the figures in line.

It would be good if anyone reading this who has been through a rejection with a financed to car could let me know if they were stuck with the bill for the money lost on interest.

[Wipeout]

Quit while you are ahead. It sounds like a reasonable settlement. I did 3.5k in 3 months and paid around £700. Couldn't wait to see the back side of my Cooper S and it's many problems. 9 months have now passed and I've recently taken delivery of a Cooper D from a different dealer, which has very few minor issues.

[Martin F]

Quote: Originally Posted by danb (original)

Well, Castle have agreed to reduce the price of the Aero Kit by £330 to pull the figures in line.

It would be good if anyone reading this who has been through a rejection with a financed to car could let me know if they were stuck with the bill for the money lost on interest.

I would say that you had a choice how to pay for the car and chose to borrow. The cost of this finance over the period of ownership is, in my view, yours because it was a consequence of how you decided to pay for the car and not a consequence of the fault.

[danb]

I can see both sides of the argument.

The other way to look at it is that I wouldn't have to settle the loan if it wasn't for the fault, and also if it was just a normal unsecured loan I could just transfer the cash to the new car without settling.

This is why I'd like to hear from people who have been through the process

[CC07ERS]

I think your crazy to take another car & hope it doesnt happen again

[Ant FR]

I honestly thing with the amount of rejected cars coming on this site we should be logging the reg numbers somewhere for buyers to check. Just seems fair otherwise they will never know and another unhappy buyer will end up with it assuming its big enough for rejection to be agreed.

Can't see there is anything wrong with that as you are publishing freely available information ( ie from the original owner)

[Ant FR]

Quote: Originally Posted by Martin F (original)

I would say that you had a choice how to pay for the car and chose to borrow. The cost of this finance over the period of ownership is, in my view, yours because it was a consequence of how you decided to pay for the car and not a consequence of the fault.

Regardless of his choice, the finance is linked to the car, and there must be a clause somewhere in the contract re rejection of car under Mutual consent. As yes he is terminating the cars agreement, however he is replacing it with liek for liek finance, You should end up having some of the interest rebated.

Remember on a repayment loan (where you pay capital and interest) the interest is top loaded, therefore if you settle early you are entitiled to an interest rebate. This is beacuse to work your payments out for the full 4 yrs they have to assume it runs the full 4 yrs, so they work out the intwerest for the full period then divide it by 48 ( an example) but if you stop paying after 6 months etc, you should then be rebated the excess interest paid.

To be honest its very hard to know whether you are getting a good deal or not without seeing all the figures and also being privey to all the discussions you have had, the deal is done now , so can't see what else you can do now. just keep your fingers corssed it does'nt happen again i suppose.

[danb]

Quote: Originally Posted by Ant FR (original)

Regardless of his choice, the finance is linked to the car, and there must be a clause somewhere in the contract re rejection of car under Mutual consent. As yes he is terminating the cars agreement, however he is replacing it with liek for liek finance, You should end up having some of the interest rebated..

I am not using BMW for finance this time, as they refused to do the same rate as they did last time - even though the BoE base rate is exactly the same.

As you say - the deal is done, although I haven't actually signed a thing yet, it has all been done verbally and the figures were only put to me on Friday, once the car had arrived.

[Martin F]

Quote: Originally Posted by Ant FR (original)

Remember on a repayment loan (where you pay capital and interest) the interest is top loaded, therefore if you settle early you are entitiled to an interest rebate. This is beacuse to work your payments out for the full 4 yrs they have to assume it runs the full 4 yrs, so they work out the intwerest for the full period then divide it by 48 ( an example) but if you stop paying after 6 months etc, you should then be rebated the excess interest paid.

What actually happens is that the lender recognises interest income on the actual balance outstanding. Because the balance outstanding at the outset is high the payments are mostly interest and not much capital but the mix changes as the capital outstanding reduces. (This is regardless of the method used to calculate the total interest charge despite some misleading post to the contrary on this website)

On an early repayment, there is usually a provision in the agreement setting out the terms. Often there is a penalty of say 1 months interest. It may be higher but a large penalty would probably fall foul of the Unfair Contract Terms Act and be unenforceable. From the limited information given it did not appear that any substantial penalty was being incurred. Had I believed that there was a significant penalty then my advice might have been different.

[Ant FR]

Quote: Originally Posted by danb (original)

I am not using BMW for finance this time, as they refused to do the same rate as they did last time - even though the BoE base rate is exactly the same.

As you say - the deal is done, although I haven't actually signed a thing yet, it has all been done verbally and the figures were only put to me on Friday, once the car had arrived.

just to put your mind at rest, the BOE base rate will not affect your finance rate. most finance pakages will be based on a fixed rate, which will be backed by a money purchase on the money markets. You will find these are governed by Swap rates and many other things. So even if BOE has'nt moved the cost of a certain amount of money can still change as its linked to economic conditons and forward pricing etc.

So they are genuinely charging a higher a rate as they have to , so not being done there as it may appear.

[danb]

Quote: Originally Posted by Martin F (original)

What actually happens is that the lender recognises interest income on the actual balance outstanding. Because the balance outstanding at the outset is high the payments are mostly interest and not much capital but the mix changes as the capital outstanding reduces. (This is regardless of the method used to calculate the total interest charge despite some misleading post to the contrary on this website)

On an early repayment, there is usually a provision in the agreement setting out the terms. Often there is a penalty of say 1 months interest. It may be higher but a large penalty would probably fall foul of the Unfair Contract Terms Act and be unenforceable. From the limited information given it did not appear that any substantial penalty was being incurred. Had I believed that there was a significant penalty then my advice might have been different.

I financed 18.8k, I have repayed £2.4k, and my settlement figure is £17.3k, so I am being charged roughly £900

[Martin F]

Quote: Originally Posted by danb (original)

I financed 18.8k, I have repayed £2.4k, and my settlement figure is £17.3k, so I am being charged roughly £900

That looks about right to me. I guess your APR is around 10% and the monthly interest cost in the early months is therefore about £150. So no significant early repayment penalty

[mini_jim]

Quote: Originally Posted by danb (original)

I am not using BMW for finance this time, as they refused to do the same rate as they did last time - even though the BoE base rate is exactly the same.

As you say - the deal is done, although I haven't actually signed a thing yet, it has all been done verbally and the figures were only put to me on Friday, once the car had arrived.

HI Dan

When I initially got the rejection and replacement agreed I was still under a BMW (MINI) finance deal that I paid off soon after getting confirmation of the free replacement. Maybe they found it easier to do this as I was using their finance to pay for the car, my APR wasn't bad either, 8.2% if memory serves. From the correspondance I recieved it seemed that BMW finance were in close contact with MINI and the dealer..

Makes me think it may be worth going with the finance from the dealer even if is a % or 2 higher in case complications like these occur.

Cheers

Jim