[freewheelburnin]

Originally Posted by rocksterraghu

But the real catch is with mileage - if you run the car beyond the mileage agreed.

If you buy a car, you might as well drive it! You are on this community so it is more than obvious that you will. Take the scheme if you want to, but don't worry too much about it, because their mileage is less than 10,000 KMs a year. If you're buying a rear-wheel drive with few hundred horses, those numbers make no sense.

I had personally selected 20K kms per year. Essentially I can cover a total of 60K in 3 years which is not a bad thing. 20K is the maximum kilometre limit per year.

[rocksterraghu]

Originally Posted by freewheelburnin

I had personally selected 20K kms per year. Essentially I can cover a total of 60K in 3 years which is not a bad thing. 20K is the maximum kilometre limit per year.

If that is true, I stand corrected. I personally believe that is very high mileage but if you have verified it, thank you for pointing it out.

[the_skyliner]

Originally Posted by freewheelburnin

The buy back scheme is interesting as the total amount you shell out will be lower.

The total interest payable on such loans would be higher as the principle outstanding is always more than say a normal loan where you are basically reducing your loan liability monthly.

Originally Posted by rocksterraghu

But if you were financing the entire car anyway, you might opt to take the scheme.

Agreed, but again one will end up paying more interest than normal. Banks/financial institutes would love customers to go for such schemes as the risk factor is same but the interest income on loans is higher.

Also, the mileage restriction is kind of tricky. Even if your running is low, the higher limit will always be on your mind and that just spoils the fun of ownership for some.

[freewheelburnin]

Originally Posted by the_skyliner

The total interest payable on such loans would be higher as the principle outstanding is always more than say a normal loan where you are basically reducing your loan liability monthly.

That is true, you lose something to gain something.The lower interest rate kind of makes up for it a bit. But its a personal choice. Again the value of that amount in the future would be lower than it is today right? Also it improves your cash flow a bit and the same money could be parked in investments which give a higher return.

[amitverma]

I had to revive this thread since I am going through the same right now. I am looking at the 530i M and here are the numbers I'm looking at,

Price: 60 lacs on-road delhi
Down Payment: 25 lacs
Loan Amount: 35 lacs
Period: 4 years (80k mileage)

If I go with the buy back scheme,

EMI: 43k for 47 months = 20.21 lacs
Buyback Promise: 30 lacs (~29.xx actually)
Total cost of car if I decide to keep it after 4 years, 25+20+30 = 75 lacs

If I go with a normal finance,

EMI: 93k for 48 months = 44.64 lacs
Total cost of car = ~70 lacs

So, there's a difference of 5 lacs here. I'd be paying 5 lacs more if I indeed decide to hang on to the car after 4 years, which is a 50:50 chance. But a 4 year old German with 80k on the odo wouldn't be something I'd want to hang on to, especially if I dont go for a 6 year warranty (2+4), I mean it's not a Honda.

So let's take a look if I'd be able to sell my 70 lac 5(30i petrol?). I should be able to sell it for at least 25 lacs so I'm at par with the buy back scheme.

How, you ask? If I go with the buy back scheme, I spend 45 over the course of 4 years. If I go with normal finance, I spend 70 over the course of 4 years. So, I end up saving 25 lacs there, but without a car.

So, if I want to make sure I spend equal amounts of money in normal finance scheme, I should be able to sell this car for at least 25 lacs. But with 80k on the odo, I find it to be quite an uphill task. I don't think I'd even go for a Honda with that kind of mileage, let alone a BMW.

I searched online for used 2015 5 series cars and they're listed between 20-25 lacs. And these are dealer markups so I am guessing there's another lac or something to be negotiated. And dealers mostly keep around 2-3 lacs as a margin (since they're making the investment). So it comes down to around ~20 lacs.

Being a petrol car, I don't think I can expect any favors in the resale space. Being a German with high odo readings is another thing that'll get away from me. So, a realistic value seems to be 20-25.

Now, also keep in mind 50k that I'm saving every month (which can be invested elsewhere or even kept in the bank, it'll still grow). I'd end up saving 24 lacs over the course of 4 years which can be used in a better way?

The only caveat comes down to the actual BMW promise. How well are they going to behave when I'm selling instead of buying? Will they nit-pick? Is there anyone on the forum who has tried to sell-back their car? Was it as easy as they make it look?

Any suggestions/information is welcome.

[drfiroz]

Thanks AmitVerma for reviving the thread.

I am in a similar situation regarding the X1.

Whatever I could think of after going through a lot of calculations and all, is that the financial aspect is not too bad. The silver lining is the reduced EMI. Some people may say that the actual interest we pay is more, but I would like to say that no financial institution is going to give us a loan at a loss.

Secondly, I too agree that the buyback amount is almost there with the real market price. There may be a 10-15% loss, but then again that is compensated by the peace of mind factor.

The only thing I am worried about is the list of points in the agreement. There seem to be too many.

Have you gone through it?

I am trying to clarify with the dealer regarding the finer points, but anyone with practical experience will be welcome to share it.

Thanks

[Turbanator]

Originally Posted by amitverma

If I go with the buy back scheme,

EMI: 43k for 47 months = 20.21 lacs
Buyback Promise: 30 lacs (~29.xx actually)
Total cost of car if I decide to keep it after 4 years, 25+20+30 = 75 lacs

If I go with a normal finance,

EMI: 93k for 48 months = 44.64 lacs
Total cost of car = ~70 lacs


Now, also keep in mind 50k that I'm saving every month. I'd end up saving 24 lacs over the course of 4 years which can be used in a better way?

As I answered elsewhere, it works well unless your Car has been into a major accident. It has to be repaired and serviced at the Dealerships always on time and returned back in good condition free from any defects, so an extended warranty will be helpful. I am not sure about the mandatory Insurance part from the dealership so double-check. Technically, buy-back is more like a Baloon payment scheme they used to offer before but with an assured buyback value. if you do more KMs that's also documented so in case you are not sure, no harm in picking less mileage option. The charges for extra Km are reasonable.

Now, coming to choosing between this program and the regular finance, it will depend a lot on the person. If you have a limited monthly income or buy in the name of your business/ company and can book the interest/ depreciation no harm in considering this option. On the other hand, if you tend to keep your cars for longer and don't want to keep future liabilities better pay EMI and close the loan.

How well are they going to behave when I'm selling instead of buying? Will they nit-pick?
The only caveat comes down to the actual BMW promise.

This is assured by BMW India/ BMW Financial services, sort of underwritten by them and the risks are not of the dealer. So even if the value depreciates more, BMW will bear the losses.

Another advice to both you guys, if you have to drive the cars most of the time, do check the new 3 being launched this week before picking a 5 or X1. It has the newest interior and electronics & It's coming with Buyback scheme from Day 1

[itwasntme]

Originally Posted by drfiroz

The only thing I am worried about is the list of points in the agreement. There seem to be too many.

Have you gone through it?

I am trying to clarify with the dealer regarding the finer points, but anyone with practical experience will be welcome to share it.

Thanks

I was also studying a similar assured buyback offer from Skoda for the Superb:

https://www.skoda-auto.co.in/news/ne...duces-easy-buy

However, when I studied the agreement I was amazed at the level of wear & tear to which Skoda had specified including even minor dings (to be examined with a paint meter etc). Leave aside anything else, the paint checks could have wiped out the assured resale if complied with as per the agreement!

Sorry, not a helpful practical answer though!

[amitverma]

Originally Posted by Turbanator

Another advice to both you guys, if you have to drive the cars most of the time, do check the new 3 being launched this week before picking a 5 or X1. It has the newest interior and electronics & It's coming with Buyback scheme from Day 1

Thanks Turbanator. I already test drove the new 330i on Sunday. Its quick, and the exhaust note is absolutely brilliant. You won't find anything that matches it below 50 lacs. It wil only be launched in M Sport, and the sales rep gave me an idea around ~55 on road delhi. And being a new launch, there'd be zero discounts. The 530i on the other hand will cost me 60. And its a lot more car than the 3. No 360 camera, no powered steering wheel (so, it wont go back up when I switch off the car), and the tacho goes anti-clockwise which will get on your nerves every time.

Also, the steering on the new 3 is disappointing even in Sport mode. The old world charm of the 3 series just isn't there. I just don't understand why BMW went for the electric power steering since the F30.

Just one question though, from my calculations in the post, do you see the buy back scheme as a loss if I dont plan on keeping the car for long?

@drfiroz, I haven't checked out the contract yet. Is there anything in particular that felt weird to you? Can you share?

[Turbanator]

Originally Posted by amitverma

I already test drove the new 330i on Sunday. And being a new launch, there'd be zero discounts. The 530i on the other hand will cost me 60. And its a lot more car than the 3.
Also, the steering on the new 3 is disappointing even in Sport mode. The old world charm of the 3 series just isn't there.

I got a chance to sit in the passenger seat last month in Canada while my son was testing. Coming from the Wrangler, he enjoyed but I didn't like the interiors and overall ride quality.

I am not sure if it's because of the dampers or the Steering that you did not find the drive engaging. I guess, it also depends on your current ride and age. Most of the 3 series buyers will be coming from Corrola/ Superb and similar and will enjoy the new 3. But on the other hand, someone who already has experienced such cars may be disappointed. I agree, buying BMW at the full price does not make sense and 530i with 8-10 lac discounts will be a better option. Perhaps wait for the price announcement on the new 3.

Just one question though, from my calculations in the post, do you see the buy back scheme as a loss if I don't plan on keeping the car for long?

I am not very good at such calculations so I am afraid, I won't have a clear answer. For me, I tend to close the liabilities/ loans as fast as possible whereas some others in our company prefer to keep their monthly outflow in check. So it will be entirely up to you. As far as BMW buyback is concerned, they are not Skoda, so nothing to worry.

[amitverma]

Originally Posted by Turbanator

I am not very good at such calculations so I am afraid, I won't have a clear answer. For me, I tend to close the liabilities/ loans as fast as possible whereas some others in our company prefer to keep their monthly outflow in check. So it will be entirely up to you.

Even I don't like any liabilities hanging over my head, but it just seems like carefully (or not) investing the 50k might yield a better output considering the depreciation that these cars go through. With greater interest in luxury used cars, I'm certain that the prices will get competitive to keep the competition in check. And high mileage germans aren't something that go flying off the shelfs.

Also, I'm currently using the Civic as a daily driver. So while I enjoyed 250 odd horses in the 330i, the steering left a lot to be desired.. But it's not all bad if you ask me. You'd love the exhaust, it even does pops and crackles if you hit the gas hard enough.

Lets see what price comes out tomorrow. If theres a difference of around 8-10 lacs, I might just go for the 330, but that seems too good to be true..

[drfiroz]

Originally Posted by amitverma

@drfiroz, I haven't checked out the contract yet. Is there anything in particular that felt weird to you? Can you share?

Hi,

I have gone through the draft agreement. Lots of points like scratches, paint jobs, noise etc. I don't know whether they will actually test all the variables or not. If even minor things are accounted for, I believe the end result may be less than zero

Anyways, since it's an open contract, I can always sell myself I suppose.

[amitverma]

Originally Posted by drfiroz

Hi,

I have gone through the draft agreement. Lots of points like scratches, paint jobs, noise etc. I don't know whether they will actually test all the variables or not. If even minor things are accounted for, I believe the end result may be less than zero

Anyways, since it's an open contract, I can always sell myself I suppose.

Yes that's true. But I don't think the open market price would compare with the buy back value for sure. I doubt a 4 year old 530i M with 80k on the odo can be sold for 30 lacs.

[shiva75]

This is a very informative and interesting forum topic. I am now exploring the option of buying a X1 and in the exact same dilemma regarding the buy back option. Now, the only reason I have been considering the buy back is because of the new government rule for BS6 vs BS4. There may not be any takers for these BS4 cars 3-4 years later. In this scenario, would a buy back scheme make sense? Now that I hear of the million conditions being imposed on paint etc., it gives me jitters. Any advise is welcome.

[VPJ74]

I am also exploring the X1 among others and will also evaluate the buy back option.

As a few have already pointed out, it comes down to personal choice, taxes and risk appetite of each individual.

The buyback does offer a few additional options to manage cash flow with lower EMI. Personally, i would not like to keep the car beyond 4-5 years and happy to use a "leased" car. I plan to negotiate a lowest exShowroom price and THEN structure the buyback. Also, since i am going for a buyback I will try to structure the EMI for the reduced loan amount.