BMW 1-Series Forum (F20) 135i - 1Addicts.com > Second Generation 1 Series Forum > 2012 BMW 1-Series Sporthatch (F20) Discussion > BMW Full Circle Program
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      10-26-2013, 05:20 AM   #1
vladt
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BMW Full Circle Program

Hi,

So my M135i is ready for delivery next week. As I use my car primarily for business, I usually finance the entire purchase price. (Chattel Mortgage).

BMW are now offering Full Circle program with a guaranteed buy back price.
Would love to hear your opinions on it? Pros and Cons?
Has anyone taken up this option

Any advise is much appreciated.

Cheers
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      10-26-2013, 11:00 PM   #2
aus135i
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i was like you before, CM and now im moving on to FC, coz i think its just easier! Only down side is, it will be hard to move to another brand.
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      10-27-2013, 10:35 PM   #3
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Quote:
Originally Posted by aus135i View Post
i was like you before, CM and now im moving on to FC, coz i think its just easier! Only down side is, it will be hard to move to another brand.
hahaha you planning to move onto another brand?? your f20 getting too small already tim??
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      10-28-2013, 04:44 AM   #4
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It sounds more or less the same as PCP (not the drug) which lost of people have been using for years over here.

You get a brand new car at an agreed monthly cost for an agreed annual mileage with a guaranteed future value. So in other words you pay the depreciation.

This form of finance has been going for years over here. It's normally worked out in such a way that you have a bit of equity in the car at the end of the term (if you make it to the end, you can voluntarily terminate/trade early, roughly half way through). Basically when you get to the end of the term you have 3 options. 1. pay the final payment 2. hand the car back and walk away 3. trade the car for something new.

There is no obligation to go back to BMW. You can trade the car at another manufacturer.

Opinions on this route of financing are mixed. It can be made to work and can be no worse than buying a new car with your own money. It's never going to be as cost effective as buying a used car but then that's always the case no matter how you finance a new car.
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      10-28-2013, 08:11 PM   #5
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Not sure about the tax benefits of the full circle - Chattel Mortgage seemed to be the better option for me in this regard according to my accountant.

Beyond that, if you can deal with the not-insubstantial hassle, I suspect you would always do better selling privately at trade-in time, and I also wonder about how much lower the dealer trade values would be when compared to the guaranteed value. I am presuming full circle isn't actually for the financial benefit of the customer - anything that reduces hassle and makes customers feel warm and fuzzy when selling on is going to cost us, not them, money.
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      10-29-2013, 08:22 AM   #6
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What is Chattel Mortgage guys? (just curious)
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      10-30-2013, 12:12 AM   #7
vladt
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Thanks for all who responded.
Just picked up my car and went with Chattel Mortgage.
Here is the link on what it is.. for TMP
http://www.strattonfinance.com.au/ca...e/what-is.aspx
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      10-30-2013, 12:28 AM   #8
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Quote:
Originally Posted by vladt View Post
Thanks for all who responded.
Just picked up my car and went with Chattel Mortgage.
Here is the link on what it is.. for TMP
http://www.strattonfinance.com.au/ca...e/what-is.aspx
The main advantage as I understand it is that you are able to claim back the business use proportion of the GST (our VAT) up to the luxury car tax limit (about $58000) at the time of purchase, rather than just claiming back small amounts each month.

So it effectively reduces the initial purchase price by, for example $4640, say 10% (GST amount) of 80% (business use percentage for example) of $58000.

Downside seems to be that if you later sell it you have to repay the business proportion of GST (80% x 10%) on the sale price realised.
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