Initial Payment Deferral Explained.
These explanatory notes apply unless you already have a Payment Deferral with us made on or after 27 April 2020.
These explanatory notes are for Select PCP (Personal Contract Purchase), Hire Purchase and Personal Loan agreements. If you have a Personal Contract Hire agreement, please call us for information about your deferral options 0370 5050 150, Option 5, Option 2.
If you are experiencing or reasonably expecting to experience temporary financial difficulties as a result of Coronavirus, you can apply for a Payment Deferral.
For more information on Payment Deferrals, your options and their implications please click here to view a video message from our Chief Executive Officer, Mike Dennett.
How Payment Deferrals work
During a Payment Deferral you will make no payments on your agreement for up to three months and you can request one, two or three months. The length (or ‘term’) of your contract will be extended by the same number of months.
You can apply via the link below for an initial Payment Deferral of one, two or three months. We will email you to inform you if your application is accepted.
Please only request the number of months’ deferral that you require. If you are able to continue paying your regular monthly payments in full, it is likely to be in your financial interest to do so. This will avoid having to pay additional costs incurred by deferring your payments.
After providing a deferral to you, we will not collect any payments on your finance agreement during the deferral period.
If you can afford to make partial payments (for up to three months), and wish to do so, you should apply for a Payment Deferral (up to three months) and then call us to make voluntary payments at the level you can afford. It is likely to be in your interests to do so to limit the additional interest to pay, after payment of any arrears incurred prior to the start of the deferral.
Extension of your agreement
The length (known as ‘term’) of your agreement will be extended by the same number of months as your deferral period (up to three months).
Extending your agreement by the same number of months deferred means that the number of payments you make in total will stay the same.
You will, of course, be able to continue using the vehicle during the extended period.
Additional interest to pay
As it will take you longer to pay back the amount borrowed, there will be additional interest to pay. This will be calculated using the same rate stated on your agreement and will be spread across your remaining monthly repayments, causing them to increase.
Will this affect my Optional Final Payment on a PCP agreement?
If you are on a Select Personal Contract Purchase (PCP) agreement, a Payment Deferral will delay the date of your Optional Final Payment by the number of monthly payments that you defer.
The amount of your Optional Final Payment will not change for deferrals of up to three months. However, the interest you are charged for the deferral period includes interest on this Optional Final Payment because this amount will be outstanding for longer.
The mileage allowance (total contract mileage) in your agreement will not change for deferrals of up to three months. If you choose to return the vehicle at the end of the agreement you will be charged for any excess mileage over this allowance. The mileage allowance and excess mileage charge per mile is shown on your agreement. You can view your contract details anytime via our MyBMWFinance self-service facility.
As a result of extending the length of your agreement by requesting a Payment Deferral, your car is likely to be worth less at the end of the agreement. This may affect how you decide to exercise your choice of options available at the end of your agreement. You still have the option to return the vehicle without paying the Optional Final Payment but please be aware that vehicle damage and excess mileage charges may be payable, as per your original contract.
The following examples illustrate how the additional interest will affect monthly payments:
These examples are based on an Original Contract Term of 48 months, 9.9% APR with a Payment Deferral Duration of 3 months, and a New Contract Term of 51 months (to print or download the table below, please click here for the PDF version):