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post #1 of 14 (permalink) Old Jan 30th, 2008, 10:10 AM Thread Starter
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United-Kingdom Proposed Mini - Spec and finance Qs

Hi all,

Haven't posted here in a while! I have a 2003 MC which is coming to the end of its Mini Select deal so I have decided to part company with it and get a new 2008 model!

Anyway, I have a couple of questions relating to spec and finance. Hope you guys can help.

1. SPEC
  • I have chosen a Pepper White/ Black Roof/ Black Bonnet stripes. I want to go for the cream bits on the seats and the extra cream colour line but I hear those mark easily. Is this true? I'm between PW and Lightning Blue so might go for that instead with the blue bits to the seats and blue extra colour line.
  • Apart from that, I'm going for the Chilli pack, MFSW (missed out on that last time and really missed the cruise functionality, so not making the same mistake this time). I'm also tempted to add the Xenons and the 17" Crown wheels...Are the xenons worth it?
  • Is there anything else I should have? I'm thinking about the Sports button and the Sports suspension? I had the SS+ on my original model and it was a harsh ride but LOTS of fun. Have things improved a bit, ride-wise?

2. FINANCE

I have 3k in equity on my MC and was jsut planning to trade it in for another Mini Select deal but I've heard people say that this is quite a bad deal. I went back to the dealer and said I could get finance elsewhere etc. etc. and what could they do for me. They came back with this quote:
  • 15,520 (no xenons included in this quote but the 17"s are there).
  • 3,000 equity trade in on my old MC (2003 model, metallic black, 30k miles, Chilli pack, auto air con, 17"s). They valued my car at 8k, is this about right?
  • 199/month over 48 months and a final payment of ~7200 - 10.7% APR

Is this a good deal? Could I drive them down further? Should I go elsewhere? I was thinking about doing a straight 3+35 lease but not sure. Any help gratefully received. Thanks!

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post #2 of 14 (permalink) Old Jan 30th, 2008, 12:25 PM
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I AM NO EXPERT BUT...

Are you putting your £3000 is as a deposit?
£199 x 48 = £9552
Final payment £7200
Deposit £3000

If so it is going to cost you £19,752!!! (minus £3000 deposit is £1232 for finance)

REMEMBER you have £199 a month PLUS having to save £7200 which is another £150 a month if you want to keep the car. So in effect thats a whopping £349 a month!!! A personal loan of (£15,520 - £3000 deposit) = £12.520 over 48 months is £296.93 a month with MoneyBack Bank. 6.7% APR saves you £2,499.36 and you own the car and the equity to change it in 4 years around £7-8k

Does your £15,520 include TLC as I would go for that if not. Any finance setup fees?

Am i correct guys/girls?


57 Mini Cooper, Astro Black.
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post #3 of 14 (permalink) Old Jan 30th, 2008, 12:48 PM
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Sainsbury's are doing loans at 6.5% APR until the end of Feb on loans over £7000. So you could save more. My figures are for unprotected loans.

57 Mini Cooper, Astro Black.
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post #4 of 14 (permalink) Old Jan 30th, 2008, 04:24 PM
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Get a quote from another dealer, I'm in a similar position and have just this week put down the deposit on an S.

I went to my local dealer and got a quote whilst openly telling them I was also going to get a quote from my original dealer. They came back with an APR 2% lower than yours and which I understand is as low as MINI will go at the moment.

R
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post #5 of 14 (permalink) Old Jan 31st, 2008, 11:28 AM Thread Starter
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Many thanks for the replies so far

Any other suggestions?
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post #6 of 14 (permalink) Old Jan 31st, 2008, 11:53 AM
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I'm not going to make comment on what is a good deal and what isn't here as I don't know enough at the moment. Whenever anyone mentions Select on here there is a barage of "How much?" cries. I am on Select with my 56 plate MC, the reasons being.

1) I do a lot of mileage in a year, and with Select i get my brand new reliable car for a reasonable monthly payment over 48 months.

2) When I do horrendous mileages every year I pay about 2p/mile excess for going over my 10k per year limit. The bonus for me is that at the end of the day I can just hand the car back and not have to worry about reselling a car that has 3 or 4 times the mileage it should have. The GFV and my own calcs on excess mileage tell me exactly what I will get at the end of the term.

So select works out well for me provided the excess mileage payments are low enough; some manufacturers are as high as 10-12p/mile.

When talking about Select too many people get hung up on the total amount payable, (48 months and the balloon), when in reality most people will just hand the car back at the end of the term. To pay the balloon payment does make the total cost expensive. But look at it this way, if someone is buying a brand new car now, why would they want to continue driving it when it's four years old? In reality they will hand it back and get another brand new car, so in many ways the balloon payment can be ignored.

Does any of that make sense?

If you want a similar package you may want to look at someone like M&S car finance as they do a loan where you can defer a set amount of the loan until the end. The only thing here is that you can't hand the car back to anyone if it starts depreciating quicker than the finance.

Commenting on finance and peoples choices can only be done constructively when the full circumstances are known.
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post #7 of 14 (permalink) Old Jan 31st, 2008, 01:42 PM
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My 2p

Things to remember:

1) The value Mini "suggest" your car would be worth at the end of the select term is usually pretty lowish as they want to get your car back and sell it on their forecourt with as much profit as possible.

Mini's have high residual value and are desirable so resell is pretty likely.

EG: you say your car is worth 8k? they gave you what a 5.5k-6k balloon when you got it new?

This was found on minicherished in 30 secs not exact same as yours but to give you an example of the profit they would be looking at from your car.

MINI Cooper S Manual 2003 38,999 Black II Leather GRAVITY Black £12,950

So if it is worth more after select term they will give you TRADE value of your car, you probably find its work nearer 10k selling private and more on their forecourt!

2) If you do finance your car elsewhere at the end of the loan if its in good nick and treated well with Full Mini Service History (usually are as TLC is so good) then they will be tearing your arm off to buy it off you and get you into a new one!! so the trade-in offer hits you less if you paid less in finance.

They do this as they have people buying 2nd hand ones all the time and they look for specific specs that the new customer wants.

((A note to all that like to make their mini "individual" not everyone likes pink cars with landing pads on the roof with blue interiors))

Cars loose money not matter what, but to ensure the best residual value you should research what options are desired by most when looking for a 2nd hand mini and spec them as a must and then tailor your car a little!

EG: Chilli pack = a must in most cases, Harmon Hifi- is very desirable,. Colours-- yellow, white, bright greens/blues and goldish colours do loose more money than others. (not so much on Mini's as they are "funky/cool" and get away with more diverse colours than other cars.

3) Why pay Mini lots of interest for the finance? 11% or there abouts it 5.5% flat rate so you pay the same interest through the whole term of the loan.

Although banks don't use flat rate % only apr if you were to compare a bank loan would be the equivalent of 2.55% ish.

You would save probably 3k+ in interest you could put back into a new car next time around or a nice holiday!!

Marks and Spencer do the deferred loan - keeping monthly payments low -but costs much less and has an automatic option to allow you to carrying on paying off the loan after the say 48months at the same rate.

Or if you can get a loan for the full cost then an option to look at is unsecured personal bank loan over a greater period ie 6 years.

calculate how much you would pay off in the time you would like ie 48months and how much you would owe after that.

Sell the car to private person or mini the small amount left on loan is payed off and you have money left over for another car - this often works out even cheaper!!

NOTE: check loans for early ending fee's it might be just a small amount but remember to take it into account in your calculations.

4) If you take a Mini select HP agreement then you don't actually own the car until you pay the final amount off !!

This means legally you cant mod it, change it in any way, you must clean it and keep it in tiptop condition , I don't know if they do but some car manufactures pose financial penalties for scratches/damage that are "deemed" excessive.

Hope this helps a little...
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post #8 of 14 (permalink) Old Jan 31st, 2008, 11:35 PM
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I have MINI Select, I'm pretty pleased with it. I took it on the basis of a number of assumptions.

1) A bank loan for the total amount (I had only a small deposit, but more on that in a bit) would have meant that I owned the car (technically, though of couse my liabilities would have outweighed my assets, because of retail prices and depretitation). However, I personally have no interest in owning a car, I'd prefer to use it and give it back when I'm done to avoid the hasstles of selling (I normally change cars very frequently).

2) Having a small deposit wasn't a problem, and in many ways reduced initial capital outlay into a depretiating asset. Related to above, a small deposit also makes the finance cheaper, because of the deferred amount, so say the car was £10k, finance over 48 months would mean a £10k loan from the bank, because of the GMFV of, say £3k, the Select finance means that you are only financing £7k, albeit at a higher rate.

3) As far as keeping car in tip top condition, well I tend to do that anyway (am about to get it detailed so will actually will be better than when I got it), and I'm sure the majority of people on a forum like this would. With TLC servicing according to manufacturer specs shouldn't be an issue either.

4) On Select you can mod your car, within reason, but it has to be cleared with them first. If you want to do some common individualisations, I can't see them objecting. I spoke to my dealer about putting spots on, and wasn't to keen on their prices, and they said they didn't even have to be fitted by a dealer (though I imagine they would have to be OEM ones). Obviously, this would need to be checked in any case.

5) If MINI do give a low GMFV then this has two advantages, firstly it willmean that a balloon payment at the end would be lower, and also equity in the Select deal will be built up quicker, thus allowing you to change car earlier. akeapy I don't mean to be rude, but TheGreatEscape has a MC, nat an MCS, and for a 2003 model in basic Chilli spec Glasses Guide values it at £7480 for a trade in (which is the appropriate valuation in this case), so I don't think that £8k is an unrealistic valuation given the alloys etc.

I think I'd say that if owning your car is important to you, Select isn't going to be your best option. However, if you like to change your car more often (after 24 months of a 48 months agreement I should be even on the finance to change) then Select isn't a bad option. As with all finance agreements, get all the facts you can and go into with your eyes open. I pay about £2.5k per year on my deal, which in my view is simply paying the depretiation, without a large initial capital investment.
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post #9 of 14 (permalink) Old Feb 1st, 2008, 09:27 AM
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Originally Posted by akeapy View Post
Things to remember:


4) If you take a Mini select HP agreement then you don't actually own the car until you pay the final amount off !!

This means legally you cant mod it, change it in any way, you must clean it and keep it in tiptop condition , I don't know if they do but some car manufactures pose financial penalties for scratches/damage that are "deemed" excessive.
Can I just point something out here, without sounding smug. Unless you buy your car for cash you never own your car until you've paid off the final payment of the finance/loan. The car always remains the property of the finance/loan house. This is true of a bank loan too as you usually declare on the application form what the loan is for. If you fail to make the payments then the bank will reposses the car (or whatever you told them the loan was for). If you've lent money to buy something you do not own it until the end of the loan term, easy to forget in these days of credit.

I will also point out that the guaranteed final value is a minimum value, (provided the mileage etc. is within the limits), It is not the maximum. And any car should be kept in tiptop condition whether financed or bought outright. It is the most expensive thing you will buy, apart from your house/home so should be treated in such a way.

And on the mods front all posts that mention them are assuming that everyone wants to mod there MINIs. It is easy when using a site like this to believe that every MINI out there is modded. They are not in fact modded cars are very much the exception.

Akeapy is correct on many points but I just thought the above needed pointing out. Sorry for sounding so pompous.
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post #10 of 14 (permalink) Old Feb 1st, 2008, 12:08 PM
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Originally Posted by akeapy View Post
3) Why pay Mini lots of interest for the finance? 11% or there abouts it 5.5% flat rate so you pay the same interest through the whole term of the loan.

Although banks don't use flat rate % only apr if you were to compare a bank loan would be the equivalent of 2.55% ish.

You would save probably 3k+ in interest you could put back into a new car next time around or a nice holiday!!
This is based on a misunderstanding. Flat rates are used to calculate the finance charge based on the amount borrowed. It has no effect on the amount of interest included in each repayment. As with a mortgage, in the early part of the agreement much of the payment goes to meet interest. But unless you settle the loan early this will not be apparent. It is best to ignore any references to flat rates and always compare APRs.

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post #11 of 14 (permalink) Old Feb 1st, 2008, 12:15 PM
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2) Having a small deposit wasn't a problem, and in many ways reduced initial capital outlay into a depretiating asset. Related to above, a small deposit also makes the finance cheaper, because of the deferred amount, so say the car was £10k, finance over 48 months would mean a £10k loan from the bank, because of the GMFV of, say £3k, the Select finance means that you are only financing £7k, albeit at a higher rate.
This is another common misunderstanding. The cost of the finance is determined by the amount borrowed. The GMFV is subject to interest just as the rest of the amount financed is. The size of the GMFV will affect the amount charged for interest because the rate at which capital is repaid changes. Again it is best to focus on the APR.
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post #12 of 14 (permalink) Old Feb 1st, 2008, 12:19 PM
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Can I just point something out here, without sounding smug. Unless you buy your car for cash you never own your car until you've paid off the final payment of the finance/loan. The car always remains the property of the finance/loan house. This is true of a bank loan too as you usually declare on the application form what the loan is for. If you fail to make the payments then the bank will reposses the car (or whatever you told them the loan was for). If you've lent money to buy something you do not own it until the end of the loan term, easy to forget in these days of credit.
If you buy are car using a personal loan you own the car outright. Whilst in obtaining a personal loan you may say what it is for, that does not give the lender any special rights over the car.

It may be true that in the event of default the lender may, after getting judgement for the debt, attempt to enforce it against the car but in the absence of judgement, the lender has no specific rights against the car.
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post #13 of 14 (permalink) Old Feb 1st, 2008, 02:00 PM
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This is another common misunderstanding. The cost of the finance is determined by the amount borrowed. The GMFV is subject to interest just as the rest of the amount financed is. The size of the GMFV will affect the amount charged for interest because the rate at which capital is repaid changes. Again it is best to focus on the APR.
Could I ask you to explain this again. I checked borrowing the total (similar) car amount from a bank, and I have a decent credit record so could take advantage of lower APRs, but I couldn't beat what I'm paying on Select? I understand the APR for comparison that I pay is higher, but on a lower amount due to the GMFV, otherwise surely the bank rate should be better?

Right just re-read your post, is what you are saying that my interest is on £10k car with £3k GMFV made up from:

Interest on £7k outstanding amount (reducing with every payment) + Interest on £3k GMFV = Total interest payments monthly

and

Total interest payments monthly + reduction in the amount owed = Total monthly payments

Is this about right?

Last edited by thebadun; Feb 1st, 2008 at 02:04 PM. Reason: Think I understood it a bit more
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post #14 of 14 (permalink) Old Feb 1st, 2008, 03:21 PM
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The monthly payments on Select will be lower because you are not repaying the £3k of capital.

Let us suppose that you borrow £10k over three years from a bank on an APR of 10%. The total interest payable will be about £1628 and the monthly payments will be £10,000+£1628 = £11628/36=£323. At the end you own the car and have no debt.

However, if you use Select with the same APR but with a GFMV of £3k the amount of capital outstanding at any time will be higher and as a result the total interest cost will be about £2036. The monthly repayments will be £7k of capital to be repaid over the term plus the interest ie £2036+£7,000 = £9036 or £251 per month. So although the total interest cost is higher the monthly payments are lower.

However, on the bank loan you have no debt at the end of 3 three years whereas with Select you need to pay a further £3k to own the car.

I hope this helps.
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