This week we have been looking into BMW finance options, and thought we would put together our research into a blog-post in case it is useful for others.
“If it appreciates, buy it. If it depreciates, lease it.” J.Paul Getty, oil magnate
There are three main options available at BMW Financial Services:
1) BMW Select
BMW Select is BMW’s Personal Contract Purchase product, a flexible form of car finance, that gives customers a number of options to choose from, at the end of the fixed term.
The product makes use of an Estimated Future Value of the car, allowing you to defer a proportion of the car’s total value until the end of the agreement.
At the end of the term, depending on the condition and mileage of the car, you can potentially choose one of the following options:
- Pay the optional final payment, and then own your BMW
- Give your BMW back, and have nothing more to pay
- Part exchange for a new model, and receive money towards your new car
This flexibility makes BMW Select an appealing product. Love the car and don’t want to say goodbye at the end of the term? No problem. Want to stop financing and go in another direction? No problem. Itching to get the latest model? No problem, have some money off your new car.
2) Hire Purchase
Hire purchase is a simple and straightforward finance arrangement that provides a way to pay for a BMW over time with regular monthly payments.
At the end of the term the car is yours to own.
You can select the model you are interested in, choose the term (anywhere from one to five years) and deposit amount, and select a monthly payment amount that you can afford.
One benefit of this option is that there are no mileage requirements, unlike some of the other finance options available.
Hire purchase (sometimes known as ‘HP’ for short) is a bit like borrowing money from a bank, and paying it back over time with interest.
3) Contract Hire
With BMW’s contract hire product, you can pick the BMW you want, and not have to worry about the car depreciating in value or selling it.
When you take out contract hire, or ‘car leasing’ as it is frequently known, you get usage of a car for a set period – and at the end of the period you give the car back.
So unlike some of the options we have listed above, you don’t own the car, nor do you get the chance to buy it at a discounted rate at the end of the term.
However many websites will tell you that contract hire/car leasing can sometimes be the most efficient type of car finance.
A benefit of BMW’s contract hire product, is that a VAT registered business in the UK can claim back up to 50% on rentals.
We found most of the information above from the BMW Financial Services website where you can browse car finance options here.
It may be worth noting that finance is only available to over 18s in the UK.
If you have found our article useful or if you have any comments or questions please leave them below.
