Best ways to finance a BMW car purchase in the UK

With a rich history spanning over 100 years, BMW has earned its reputation as one of the most prestigious and iconic automotive brands worldwide. What truly sets BMW apart is its unwavering focus on engineering excellence, innovation and driving performance.

However, buying a BMW is not a cheap affair. The upfront cost of a new or used BMW can be quite high, and you also have to consider the depreciation, maintenance, and insurance costs that come with owning such a premium vehicle. That’s why many people opt for financing their BMW instead of paying cash.

But how do you finance a BMW in the UK? What are the different options available, and how do they compare? How do you find the best deal for your needs and circumstances? And what are the popular types of BMW that you can buy on finance?

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The Different Finance Options Available for a BMW

If you want to buy a BMW in the UK, you have several finance options to choose from. Each option has its own features, advantages, and disadvantages. Depending on your personal and financial circumstances. In this section, we will explain the main differences between the different types of finance available for buying a BMW in the UK, such as:

Asset Finance

Asset finance is a form of leasing, where you pay a monthly fee to use the BMW, but you do not own it. The monthly fee is based on the depreciation of the BMW over the lease term, and the residual value at the end of the lease. The residual value is the estimated value of the BMW at the end of the lease, which is agreed upon at the start of the contract.

The advantage of asset finance is that you can enjoy driving a new BMW without having to pay the full purchase price upfront. You also have lower monthly payments than other finance options, as you are only paying for the depreciation of the BMW.

At the end of the lease, you have three options, you can either:

Buy the BMW for the residual value
Sell it to a third party and pay the difference between the sale price and the residual value
Extend the lease for another term.

Hire Purchase

Hire purchase is a form of credit, where you pay a deposit and then monthly instalments to buy the BMW over a fixed period of time. The monthly instalments include both the principal and the interest, and the interest rate is usually fixed. The BMW is the security for the loan, which means that if you fail to make the payments, the lender can repossess the BMW.

The advantage of hire purchase is that you can own the BMW at the end of the contract, and you can choose the deposit and the duration of the contract to suit your budget. You also have the option to settle the loan early, by paying the outstanding balance and a small fee. The disadvantage is that you have to pay interest on the loan, and you do not own the BMW until you make the final payment.

The final payment is usually the same as the monthly instalment, plus a £10 option to purchase fee. This fee is a legal requirement, and it transfers the ownership of the BMW from the lender to you.

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Hire Purchase with Balloon Payment

Hire purchase with balloon payment is similar to hire purchase, but with a twist. Instead of paying equal monthly instalments, you pay lower monthly instalments and a larger final payment, known as the balloon payment. The balloon payment is usually 25% to 50% of the purchase price of the BMW, and it is agreed upon at the start of the contract.

The advantage of hire purchase with balloon payment is that you can have lower monthly payments than hire purchase, and still own the BMW at the end of the contract. You also have the option to refinance the balloon payment, or trade in the BMW for a new one. The disadvantage is that you have to pay more interest than hire purchase, and you have to save up for the balloon payment or find another source of finance.

The balloon payment is usually the same as the agreed percentage of the purchase price, plus a £10 option to purchase fee. This fee is a legal requirement, and it transfers the ownership of the BMW from the lender to you.

Balanced Payments

Balanced payments is a credit option, where you pay a deposit and monthly instalments, including principal and variable interest, to buy the BMW over a fixed term. You can own the BMW at the end of the contract, and benefit from low interest rates when the base rate is low.

You can also settle the loan early, by paying the balance and a fee. The drawback is that you have to pay variable interest, and may have higher payments when the base rate is high. The final payment is the same as the monthly instalment, and there is no fee.

Contract Purchase

Contract purchase is a leasing option, where you pay a deposit and monthly instalments, based on the depreciation and the GFV of the BMW. You do not own the BMW, but you can buy it for the GFV, return it, or part-exchange it at the end of the contract. Contract purchase has lower monthly payments and less upfront cost than other finance options, but no equity and possible extra charges for exceeding mileage limit, or any damage or wear and tear.

At the end of the contract, you have three options: you can either buy the BMW for the GFV, return it to the lender and walk away, or part-exchange it for a new one or use any equity as a deposit.

Personal Contract Purchase (PCP)

PCP is a flexible leasing option, where you pay an initial payment and lower monthly instalments, based on the depreciation and the GFV of the BMW. You can own, return, or part-exchange the BMW at the end of the contract, by paying, avoiding, or using the GFV as a deposit. PCP has lower monthly payments and more options than contract purchase, but higher interest and a large final payment.

BMW Best Finance Options - Comparisons

To help you compare the different options, we have prepared a table that shows the key criteria of each option, such as total cost, deposit, duration, and final payment. You can use this table as a reference, but remember that the actual figures may vary depending on the lender, the model, and your credit score.

Option	Total Cost	Deposit	Duration	Final Payment
Asset finance	Depends on the monthly fee and the residual value of the BMW	Usually 10% to 20% of the purchase price	Usually 2 to 5 years	Depends on whether you want to own, sell, or extend the lease
Hire purchase	Purchase price + interest	Usually 10% to 20% of the purchase price	Usually 2 to 5 years	Usually the same as the monthly instalment + £10 option to purchase fee
Hire purchase with balloon payment	Purchase price + interest	Usually 10% to 20% of the purchase price	Usually 2 to 5 years	Usually 25% to 50% of the purchase price + £10 option to purchase fee
Balanced payments	Purchase price + interest	Usually 10% to 20% of the purchase price	Usually 2 to 5 years	Usually the same as the monthly instalment
Contract purchase	Depends on the monthly instalment and the guaranteed future value (GFV) of the BMW	Usually 10% to 20% of the purchase price	Usually 2 to 4 years	Depends on whether you want to own, return, or part-exchange the BMW
Personal contract purchase (PCP)	Depends on the monthly instalment and the guaranteed future value (GFV) of the BMW

As you can see, each option has its pros and cons, and the best one for you will depend on your preferences and goals. For example, if you want to own the BMW at the end of the term, you might prefer hire purchase or balanced payments.

If you want to have lower monthly payments, you might prefer hire purchase with balloon payment or PCP. If you want to have more flexibility at the end of the term, you might prefer contract purchase or PCP.

Get in contact with Clifton Private Finance to help make your decision easier – we can guide you to the right finance option, when considering your situation.

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Popular Types of BMW You Can Buy on Finance

Now that you have an idea of the different ways to finance a BMW in the UK, you might be wondering what types of BMW you can buy on finance. The good news is that you can find almost any model of BMW on finance, as long as it is within your budget and meets the lender’s criteria.

However, some models are more popular and available than others, depending on the demand, supply, and market trends. Here’s a brief overview:

Model	Features	Price Range	Monthly Payment Range
1 Series	Compact hatchback, petrol, diesel, or plug-in hybrid engines, sporty and agile performance, spacious and premium interior, digital cockpit, advanced safety and infotainment features	£20,000 to £30,000	£250 to £450
3 Series	Mid-size sedan, petrol, diesel, or plug-in hybrid engines, M Sport version, dynamic and efficient performance, elegant and comfortable interior, leather seats, adaptive LED headlights, cutting-edge safety and connectivity features	£30,000 to £45,000	£350 to £550
X5	Large SUV, petrol, diesel, or plug-in hybrid engines, M Sport version, powerful and versatile performance, luxurious and spacious interior, leather seats, panoramic roof, advanced safety and infotainment features	£50,000 to £70,000	£600 to £900
i8	Plug-in hybrid sports car, electric and petrol engines, futuristic and aerodynamic design, exhilarating and eco-friendly performance, high-quality and innovative interior, leather seats, digital cockpit, advanced safety and connectivity features

What Happens at the End of an Asset Finance Plan?

Asset finance is a type of finance that allows you to use the BMW as an asset for your business, while paying a fixed monthly fee to the lender. Asset finance can be either a finance lease or an operating lease, depending on whether you want to own the BMW at the end of the term or return it to the lender.

At the end of an asset finance plan, you have different options depending on the type of lease you have chosen. Here are the possible scenarios:

If you have a finance lease, you can either pay a nominal fee to the lender and own the BMW, sell the BMW to a third party and keep most of the proceeds, or extend the lease for another term at a reduced rate.
If you have an operating lease, you can either return the BMW to the lender and pay any excess mileage or damage charges, buy the BMW from the lender at an agreed price, or swap the BMW for a new one and start a new lease.

The option that you choose will depend on your preferences and circumstances. For example, if you want to own the BMW at the end of the term, you might prefer a finance lease. If you want to have a newer and more efficient BMW, you might prefer an operating lease.

Using a Finance Broker to Help

If you are interested in financing a BMW car in the UK, you might want to consider using a finance broker to help you with the process. A finance broker can help you find the best asset finance option for your needs and budget, as well as negotiate the best deal with the lender. A finance broker can also advise you on the different types of asset finance available for buying a BMW car, such as cash flow matched repayments, CBILS facilities, and bespoke terms.

At Clifton Private Finance, we have a team of specialist finance brokers who can help you finance a BMW car in the UK. We can work with BMW to arrange your car finance plan and finalise your purchase. We can also help you finance new, used, or auction-bought BMW cars, and offer the most competitive asset finance service for you.

To find out more about our finance broker service, don't hesitate to contact us today. We offer a free and no-obligation telephone consultation at a time that suits you.

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