A new BMW M5 retails for £73,000, so it’s understandable if a would-be owner considers the secondhand options; BMW’s approved used scheme throws up plenty of year-old models for £55,000 or so, including my old longtermer . How is it, then, that the new car can be substantially cheaper than a pre-owned equivalent? Because of the vagaries of personal car finance, as CAR reader James Pope has found out.
‘At first I was looking at used models, and had a look around to see if I could see your old longterm M5 for sale,’ remembers the 33-year-old stockbroker. ‘I couldn’t, but then I went to the dealer and they said they’d offer £9k off the list price of a new car, plus do 0% finance.’
The maths are intriguing: with a £10k deposit from Pope for the secondhand car, he’d be left with 36 more monthly payments of £1019 and an 8000-miles-per-annum limit. If he wanted to buy the secondhand M5 at the end of those three years, he’d have to hand over a further £28,850.
The new car? With an £11k deposit, Pope would have a further 36 payments of £632 and a 10k-per-year mileage limit. There’d also be an optional final payment of £31k if he wanted to keep hold of the car.
That leaves Pope in a ridiculously topsy-turvy position: a secondhand M5 would cost £46,684 over three years, where a new one comes in at £33,752. The finance agreement for the new car also allows him to put an additional 6000 miles under the new car’s tyres, at 30,000 miles all in.
You’ve also got to consider that the new car, obviously, would come on new tyres, with no impending services and wouldn’t need an MoT during his tenure, all of which could be issues with the used car.
Downsides? The buy-back figure is higher for the new car, but as Pope will be handing the car back, this doesn’t concern him. Finally, and importantly, the price for the new M5 does not include any options, all of which would need to be factored in – but Pope would still be ahead after lavishing a new car with over £10k of additional kit.
So what’s our lucky reader chosen to do? Buy the new car and add a restrained £3.5k of options.
It just goes to show that you need to look into all the options before you put your money where your mouth is.
Click here to read the full CAR magazine long-term test of the latest BMW M5