Video: BMW Financial UK canceled my loan contract because I modified my M4

[Thescout13]

US contracts are different than UK contracts. We don't really have a PCP in the US. While this is unfortunate and I don't necessarily doubt this happened to the individual in the link, chances of this happening in the US are small to zero (our fine print is somewhat similar but not exactly the same).

[heavyD^2]

It's basically a lease so I can understand why BMW wouldn't want the car back as the engine could be a ticking time bomb after those mods. The owner violated clauses of an legally binding contract he signed so I don't really understand why this is a story. Asking for the full amount of the car paid in a week is a little harsh but as said above they are probably making an example of a person that's somewhat known in that region in hopes of getting their point across to other customers that the consequences can be steep for violating your agreement with BMW.

[ChrisK]

Originally Posted by heavyD^2

It's basically a lease so I can understand why BMW wouldn't want the car back as the engine could be a ticking time bomb after those mods. The owner violated clauses of an legally binding contract he signed so I don't really understand why this is a story. Asking for the full amount of the car paid in a week is a little harsh but as said above they are probably making an example of a person that's somewhat known in that region in hopes of getting their point across to other customers that the consequences can be steep for violating your agreement with BMW.

I agree - you can't expect BMW to sit idle when this guy mods the living crap out of a lease car.

[Poochie]

Originally Posted by Thescout13

US contracts are different than UK contracts. We don't really have a PCP in the US. While this is unfortunate and I don't necessarily doubt this happened to the individual in the link, chances of this happening in the US are small to zero (our fine print is somewhat similar but not exactly the same).

What's a 'PCP' contract in layman's terms?

Is it like a 'BMW Select' ballon loan in the US?

[infinitekidM2C]

Crazy. He went bat shit crazy on that M4 pretty quick though

[pz619]

Originally Posted by Poochie

What's a 'PCP' contract in layman's terms?

Is it like a 'BMW Select' ballon loan in the US?

My understanding is that it's basically a lease in the US.

[Aim.F32]

Originally Posted by Poochie

What's a 'PCP' contract in layman's terms?

Is it like a 'BMW Select' ballon loan in the US?

Monthly payments with an optional balloon payment, so basically a lease..

[TemjinX2]

Originally Posted by Thescout13

US contracts are different than UK contracts. We don't really have a PCP in the US. While this is unfortunate and I don't necessarily doubt this happened to the individual in the link, chances of this happening in the US are small to zero (our fine print is somewhat similar but not exactly the same).

agreed...US car ownership laws tend to be stronger.

[KevM2]

Are we talking about financing or leasing? Because the two are very different. When you finance you are the owner and you pay the full price of the car over time... when you lease, you only pay for the depreciation and the car is BMW's unless you buy it out at the end of the lease period.... so unless LLF leased his car, it makes zero sense why he's not allowed to mod it

[Thescout13]

Originally Posted by KevM2

Are we talking about financing or leasing? Because the two are very different. When you finance you are the owner and you pay the full price of the car over time... when you lease, you only pay for the depreciation and the car is BMW's unless you buy it out at the end of the lease period.... so unless LLF leased his car, it makes zero sense why he's not allowed to mod it

Technically in either the lease or the finance the bank owns the car, not you. But you are right that in a lease you are more like renting the car with an option to buy it out.

[KevM2]

Originally Posted by Thescout13

Technically in either the lease or the finance the bank owns the car, not you. But you are right that in a lease you are more like renting the car with an option to buy it out.

I didn't know that. I assumed just like a house mortgage, if you finance a car, then you're allowed to mod it just as you're allowed to renovate or do whatever you like to the house.

[Thescout13]

Originally Posted by KevM2

I didn't know that. I assumed just like a house mortgage, if you finance a car, then you're allowed to mod it just as you're allowed to renovate or do whatever you like to the house.

Oo you are allowed to there technically aren't any contract restrictions like on a lease but the owner for legal purposes is the bank in a finance.

[pz619]

Originally Posted by KevM2

I didn't know that. I assumed just like a house mortgage, if you finance a car, then you're allowed to mod it just as you're allowed to renovate or do whatever you like to the house.

Houses are typically appreciating assets and any improvements increase value. Autos depreciate heavily and any modded car is generally considered to be worth less than an unmodified car. But even on mortgages, might be worth carefully reading what's there. There probably is fine print that says you don't just bulldoze your house and go scorched earth on the land while the bank owns the property.

[zivyn]

Originally Posted by pz619

Houses are typically appreciating assets and any improvements increase value. Autos depreciate heavily and any modded car is generally considered to be worth less than an unmodified car. But even on mortgages, might be worth carefully reading what's there. There probably is fine print that says you don't just bulldoze your house and go scorched earth on the land while the bank owns the property.

Exactly this. Until you pay off the mortgage, the bank owns the house. Want to improve it, go right ahead. But try to knock it down and you'll hear about the details of ownership really quickly.

[RustySeatbelt]

Originally Posted by Grumpy Old Man

I gather this guys financing was like a lease, I guess I was looking at it from the comparator of buying a home....the bank owns it but they don't stop me from putting a new kitchen or washroom in it.

There's a lot of different ways you could slice this, but comparing the two just because each are financed isn't apples to apples. There's a whole different value factor on the two, and property is a much more rare and highly valuable asset than a mass produced product.

[wdeerfield]

Originally Posted by natahoa

Select financing requires a balloon payment. You don’t have the option to turn it over. You either have to pay the balloon, or use the car as a trade with very little value remaining after the balloon payment.

So in that way, it it is similar to a lease, but you own the car in the same manner as you own a car with other financing. You can modify it if you want to. Lots more restrictions on a lease, because you will never own the car. Basically renting it for the term of the lease.

Yes. Bmw select is a balloon deal. Smaller payments up front with a large payment at the end. Idea is for dealers to try and roll it into your next balloon deal.

[M2Cmtl]

Mortgage contracts will usually have a clause that says you are expected to maintain the property.

Car insurance can be an issue as well with mods.

[BGR]

Originally Posted by zivyn

Exactly this. Until you pay off the mortgage, the bank owns the house. Want to improve it, go right ahead. But try to knock it down and you'll hear about the details of ownership really quickly.

It's actually a little different for a house. The bank does NOT own your home, unless you stop making mortgage payments and they go through a legal process to take it over entirely. Before that, they will attempt a short sale to recover some of their losses.

[Chopper731]

If you significantly change the collateral you used to obtain financing of a secured loan then I think the lender has every right to call the loan.

[Thescout13]

Originally Posted by Chopper731

If you significantly change the collateral you used to obtain financing of a secured loan then I think the lender has every right to call the loan.

This. But not only is your thought right, it's what almost all these contracts say. Acceleration clauses are in nearly every finance/lease agreement.

[tokki]

Originally Posted by zivyn

Exactly this. Until you pay off the mortgage, the bank owns the house. Want to improve it, go right ahead. But try to knock it down and you'll hear about the details of ownership really quickly.

False. The bank does not "own" your house if it is mortgaged. The house is owned by you, the consumer. It is purchased using money loaned through the bank ie. mortgage. The only reason a bank would come after you for wanting to knock it down is if they feel the chances of you defaulting on your loan are more substantial than their risk threshold allows. Now, whether or not they have the power to stop you from knocking it down may differ contract to contract but the existence of a mortgage in and of itself does not empower the bank to repossess a property. I only reply a little annoyed mostly because of the "experts" in the YT comments and on the facebook post I saw earlier. Most of them are kids I guess and the responses here have been more or less refreshing. Obviously in the UK the term "financed" is not as we say here in NA. In NA, we use the term financed to say the car is purchased in full ie. owned by the consumer through a loan given by a bank. The said bank would have no power to repossess your car in this case, regardless of what modification you do unless, again, the bank feels the modifications are in someway indicative of a greater probability of defaulting which... is never the case in 99.99% of cars.

[GerardzM]

Wasn't this a lease, he mention in the YouTube video that car would be given back within 1 year?

A leased vehicle is not your vehicle. More of an extended rental.