Financing Your New BMW

by Laura Ginn Writer

Whether you've owned a BMW in the past or this is your first time buying this high-end vehicle, you are probably already prepared to pay a little more than you would for a basic car. Luxury is expensive. Financing your new BMW doesn't mean you have to throw away your money. Learn about your financing options and how to maximize your investment.

When is the Best Time to Buy?

The best time to buy a BMW depends on the features you want and the price you want to pay. If you're looking for the best features at the best quality, it's best to buy at the end of the production line when the new model year is beginning. This way the older model has worked out any problems. Also, this is a good way to save money because usually special financing deals are available for the old model. If you want the latest and greatest, buy the newest model available.

BMW Select

BMW has several financing options to choose one. The most popular is BMW Select. With this option, you start by choosing the BMW you want such as the BMW 5 series. You can choose from a variety of different flexible repayment periods. There is an optional final payment, called a Guaranteed Minimum Future Value, at the end of your agreement which reduces the monthly payment during the scheduled period. You can also exchange your existing BMW for a new model when your period is over, or you can return it.

The benefits of BMW Select make it an excellent financing option. You can work the cost of your new BMW into your budget with fixed regular payments. You can afford a nicer car than you would if you chose a different financing option because the payments are low. You can get a new BMW every two to four years if you choose to exchange your old one for a new one. This means less money spent on repairs and maintenance. The best part is that you only have to commit for two to four years. After that, keep it, get a new one, or look for something else.

Hire Purchase

If you want to own your car by the time your agreement is finished, the hire purchase plan is right for you. You can make fixed regular payments over an agreed upon period of time. Fixed payments make it affordable and easy to work into a budget. To use the hire purchase financing option, choose your BMW, set up a repayment period that you can afford, and let BMW give you a deposit amount. Once you finish your agreement and make all your payments, you own the BMW. This is also good for people who drive a lot because there are no mileage restrictions.

Contract Hire

Another option offered by BMW is the Hire Purchase. This is a financing option not often offered by car companies. With the Contract Hire programme, you hire a vehicle instead of owning it. This is a popular option among business customers. As long as the car has been driven within the minimum mileage and is in good condition, you don't have to pay anything at the end of the agreement period.

To hire a BMW, choose the BMW you want, and decide how long you want it. Work with your BMW associate to agree on a maximum annual mileage, deposit amount, and regular monthly rental payment. When the agreement period is over, you will turn the BMW back over.

The benefits of a contract hire include driving a BMW without worrying about the value depreciating or having to sell it. The rental payments are fixed, and you don't need to pay as much from the start. Businesses can reclaim up to 50% of the VAT which helps them save money. You can also choose to include a maintenance package for a small extra cost.

Paying Cash

If you can afford it, paying cash for a vehicle is a great way to save money on interest payments. However, hiring the vehicle or using the BMW select programme might save you more money if you want to keep driving a newer car every few years. If you want to own the vehicle and you can front the initial cost of a new BMW, that is the most affordable way to pay.

No matter what financing option you choose, it's important to get fully comprehensive car insurance for your BMW. Adequate coverage will protect your investment. It will be required if you are using one of BMW's financing options.

Laura Ginn appreciates that luxury cars are expensive, unfortunately so can be the insurance that you need to go with them. Visit http://www.uswitch.com/car-insurance/guides/car-insurance-for-your-bmw/bmw-5-series/ and discover how to find a great deal on car insurance no matter what kind of car you drive.