If you want to get behind the wheel of a new BMW, you basically have two choices: buy or lease. Both are great options for different buyers, and the option that's best for you will depend on your financial situation, future financial goals, and driving habits.
Let's dive deep into this subject so you can get a better understanding and decide which works best for your financial future.
BUY IT NOW, SELL IT LATER
One of the major benefits of buying a BMW is that you can sell it at any point in time. There are several big life changes that might require a different vehicle than the one you own including moving, changing jobs, or having a baby.
If you own your vehicle, the timeline of those big events doesn't matter because you're free to sell or trade in the vehicle at any time. On the other hand, if you lease a BMW and one of these major life events occurs, you'll have to figure out how to get out of the vehicle lease before you can get another car.
LEASE IT, TIRE OF IT, LEASE SOMETHING NEW
One of the major benefits of leasing a BMW over buying is that you get to try new vehicles in a set time frame. So, if you like the newest BMW 3 Series, you can drive it for one or two years, depending on your lease, then get the newest BMW 3 Series when your lease ends. You can do this without any major investment on your part because leasing again after you've just finished a lease is a fairly easy process.
On the other hand, if you decide to buy the new BMW 3 Series, you'll have to keep it for as long as it takes for you to either pay it off or sell it with a profit so as not to lose any money.
Financing Comparison: The Down Payment
Whether you plan to buy or lease your next BMW vehicle, you're going to have to put down some money for your financing. If you have impeccable credit, it may not be required. Still, it's a great way to keep your monthly payments low.
With a financed BMW, you'll want to put down about 20% of the total cost of the vehicle for a down payment. This will show lenders that you're serious about your commitment to pay back the loan and it will help keep the interest rate low. If you're in this financial situation, you'll likely be able to choose between a three and five-year auto loan.
With a leasing agreement, you may not have to put down the full 20%, but you will likely still have to pay a "signing fee". This fee is usually anywhere from a couple to several thousand dollars, but can vary greatly depending on the price of the vehicle, current leasing offers, and your credit history and score.
The difference is this: The 20% down payment you make towards a financed (purchased) vehicle comes off the total amount owed on the vehicle. If you sell the vehicle, you'll likely get quite a bit of your money back. However, the signing fee you make at the beginning of a lease simply comes off the total leasing agreement amount and you will not get any of your money back at the end of your lease term no matter what you decide to do with the vehicle.
Ownership Comparison: Buying versus Leasing a Car
One of the major differences between buying and leasing a BMW vehicle is what happens once the vehicle financing contract is paid off. This is a common question that we get, so we decided to break it down in terms of leasing and buying.
What happens when a purchased vehicle is paid off?
At the end of your financing agreement, you own the vehicle so you can do anything you want with it. This means that you now have a payment-free vehicle that you can keep, sell, or give away. If you plan to keep your vehicle for a long time, this is a great way to do it.
Specifically, when your vehicle is paid off, you'll simply stop making payments. The financing company will send you information in the mail and you'll get a title with your name as the owner of the vehicle.
What happens at the end of a leasing agreement?
At the end of a leasing agreement, you have two options: to buy the car or give it back. If you decide to purchase the vehicle, you'll basically be getting it at the same pricing as a used vehicle comparable to the one you have. However, you'll then be entering into a purchasing agreement and will be responsible for paying off the vehicle in full.
The other option is to give the vehicle back to a BMW dealership. When you go with this option, you'll be responsible for paying for any damages to the vehicle that occurred while you had it. This could include stains on the upholstery, scratches or dings to the exterior, and other similar aesthetic repairs necessary.
START SHOPPING FOR YOUR NEW BMW
Whether you choose to lease or buy your next BMW, you want to shop with an authorized BMW dealership that offers a huge inventory of new vehicles for you to choose from. BMW of Manhattan is your local BMW dealer near Manhattan, the Bronx, and Queens, and we offer a wide selection of leasable and buyable new BMW vehicles in our inventory.
When you're ready to start shopping for your next vehicle, start by looking at our online inventory and check out the current lease and finance offers. When you find one that fits within your budget, consider whether you'd like to own or lease it. At that point, it's time to talk to one of our financing specialists and decide on a plan that works best for you.
Start the journey to your new BMW vehicle now in the online inventory at BMW of Manhattan.