Buying a new BMW? Here’s how to find the best car loan.
Let’s take a closer look at a selection of BMW finance options to help you work out which one is right for you.
How can I finance my new BMW?
Financing is all about finding a reputable dealer and a good interest rate on your loan.
- Dealership financing. Find a local BMW dealer and talk to them about in-house financing. BMW offers traditional loans and loans with balloon payments that keep the monthly cost low. This convenient option is one of the easiest ways to drive off the lot in a new or used BMW.
- Take out an auto loan. A car loan allows you to borrow the money you need to cover the purchase price of your new BMW. These loans are available with fixed or variable interest rates, and the car is used as collateral for the loan.
- Find an unsecured loan. Unsecured loans are similar to auto loans, but you won’t have to use your car as collateral. Instead, the lender relies on your credit to determine your interest rate, which is usually higher than what you may be offered through a secured loan. But you can take out a loan for more than you need to cover costs of registration, add-ons and other things.
- Use your credit card. Putting your purchase amount on one or more credit cards allows you to earn plenty of reward points, but the high interest rate may make the monthly payments higher than your other financing options.
Compare a selection of car loan options
Should I buy or lease my BMW?
Before you decide on financing, consider whether you want to buy your vehicle or lease it. Each have their benefits, so use this list as a guideline before you make your final decision.
Benefits of buying
- Own your car outright. The most obvious benefit of buying your BMW is owning it outright. You won’t have to worry about mileage or renewing contracts. And when you’re ready for a new car, BMWs are known for retaining their value.
- Customize your perfect vehicle. Your luxury car doesn’t have to be something you can just drive off the lot. By buying your BMW, you can customize nearly every feature to build your dream ride.
- Low APR. BMW offers an APR of around 3.89% to qualified applicants. Use your great credit score to your advantage by investing in a car that can take you anywhere.
Benefits of leasing
- Purchase additional miles at any time. Close to running out of miles on your contract? No worries. BMW allows you to buy extra miles and apply them to your current ride.
- Drive the newest model every few years. Are you the type of person who wants to be constantly in style? Leasing your BMW allows you to switch to the newest features every two to four years.
- Low monthly payments. Leasing a vehicle from BMW lowers your payments. You could be driving a luxury car for half the monthly cost of buying it outright.
How to compare your financing options for a BMW
Whether you decide to buy or lease a BMW, familiarize yourself with each option. Dealer financing may be convenient, be sure you’re getting a deal you can afford. If you opt for a balloon repayment plan to keep your monthly costs low, keep in mind that the final payment will be much larger and include all of the remaining principal and interest due on your loan.
When comparing your financing options, remember that the price advertised on a vehicle usually doesn’t reflect the total cost you’ll end up paying. Factor in a range of other expenses into your calculations, including:
- Dealer delivery costs (if applicable)
- Vehicle registration fees
- Increased insurance premiums
- Interest on your auto loan
- State and local taxes
Finally, make sure you’ve compared all your financing options before you walk into a car dealership. This will ensure that you know how much you can afford and allow you to negotiate with confidence.
What you’ll need to apply
Every loan has its own terms, but in order to qualify for most financing you’ll likely have to have excellent credit with a long and positive history. Lenders may want to confirm your employment and your spouse’s employment. This includes where you work, how long you’ve been working and your gross annual income.
This information helps your lender determine your capacity to repay the loan, but even if you hit all the marks for a specific lender, you may not be approved. Try to find offers from multiple lenders before visiting a dealer so you know you have backups in case one loan falls through.
Costs of maintaining a BMW
Like other luxury cars, BMWs are quite expensive to maintain. This is because many of the parts have to be specially imported from Germany and the mechanics who work on the cars must be certified to complete the repairs.
After the three-year dealership warranty is up, expect to pay high prices for the work you need completed, even things as simple as oil changes and basic checkups can add up.
You should also expect for your car insurance premiums to increase after buying a BMW.
Before you settle on a loan, compare the features of the loans that are offered by different lenders. The loan term, interest rate and fees all play a role in how much you’ll end up paying, but be on the lookout for additional features that may impact your ability to pay.
Create a list of your available loan options and make special note of the APR. This is the final amount of the loan that includes both interest and fees, and it’s often a good indication of how much your BMW purchase will end up costing.
If you want to hit the road in a BMW, there are many finance options available to help you buy your next vehicle. Just make sure that you carefully compare them before deciding on the right one for your financial needs.