Should I buy or lease a BMW? We look at the pros and cons

Date Posted 7th March 2022
Read Time 7 min read

BMW remain one of the most aspirational brands out there for motorists. But while you might know you want a BMW, whether that’s a new or used model and whether you should buy or lease a BMW, are all questions that can crop up when making a decision.

While Hippo Leasing can offer a variety of deals to match these parameters to ensure a deal that is right for you, below we’ll go into detail on what’s entailed so you can make an informed decision.

BMW 1 Series is our most popular new and used model from the manufacturer

What’s the difference between leasing a BMW and buying one?

Leasing is a great way of experiencing the BMW lifestyle without committing to owning the car at the end of your contract.

That’s because, when you lease a car your monthly payments are based on the depreciation of the car over the term of the contract. This essentially means the difference between what the car is worth at the start of your agreement to what it’s worth at the end based on wear and tear such as mileage. When your contract is finished you simply hand the car back.

Buying a BMW on the other hand, allows you the option of calling the car your own. This can be achieved in any number of ways whether it’s Hire Purchase, Personal Contract Purchase or even just buying outright if you have the money.

What you want from the car as well as your circumstances usually defines which option suits you best, so let’s have a closer look… 

Personal Contract Hire

Personal Contract Hire (PCH) is more commonly known as leasing. As part of the contract you’ll agree on an annual mileage limit with your finance company and that, alongside the value of the car you’re leasing and any deposit you want to make, will determine how much it costs you a month. 

At the end of your agreed term you simply hand the car back, and if you’ve gone over your mileage agreement you will have to pay extra as it will have impacted its depreciation value. Similarly you may have to pay extra on any fair wear and tear issues.

So if you drive 15,000 miles a year in a BMW 1 Series, for example, it’ll be worth less at the end of the finance term than if you covered 5,000 miles a year in the same car – as it’s covered 10,000 more miles a year. 

Personal Contract Purchase

When you take out a Personal Contract Purchase (PCP) like leasing your monthly payments are worked out based on the depreciation of the vehicle over your term. 

You also set an annual mileage limit, pay a deposit if you want to, then make payments each month until the end of your term. 

However, when that term comes to an end, instead of just handing the car back you have options. 

The first is you can hand the car back, like a PCH. Another option is you can part-exchange it based on its market value. Finally, you can pay off the final value of the car and claim ownership if you want. 

The balloon payment is a fixed price based on the terms of your contract when signed and you’re essentially paying its initial value to keep it. 

If you choose to part-exchange you can take advantage of your cars current market worth, even though you don’t own it. Essentially if the car is worth more than the final balloon payment, you can carry that money over as a deposit on to your new vehicle by selling it back to the dealer. 

The above car finance options won’t list you as the registered keeper, instead it will list the dealership. If you want to own the car outright, with your name as the registered keeper, your options include–

Hire Purchase

Hire Purchase differs from the above options as you don’t have a mileage commitment and you effectively own the car. The lender instead secures the value of the car against the hire and you are then repaying this loan: this is why the monthly payments tend to be higher than other forms of car finance.

As you are paying the full value of the vehicle over the terms of your contract, by the end of the agreement you make one final Option to Purchase payment and own the car outright.

What it’s like to lease a BMW

All-electric BMW i Series are the latest models from the manufacturer

Leasing champions usership over ownership. Think of it a bit like your Netflix subscription. So when you lease a BMW you have the same sense of pride, excitement and joy as you do by owning one, just probably with a little more money in your bank than if you’d chosen to buy it.  

It still feels like yours, even if you don’t choose to make it legally so. After all, the mechanics of the car don’t change no matter who owns it. 

That on-the-edge drive, sharp steering, snappy throttle, they’re all the same if you lease the car or buy it. But if you choose to lease it, you don’t have the headache that comes with selling it when looking for something new.  

Leasing vs buying a BMW: Pros and cons

should I buy or lease a BMW

There are variety of pros and cons to leasing and buying, and it’s up to you to find out which one suits your circumstances. 

Upsides to leasing

  • Flexibility to change your vehicle every few years
  • Lower payments compared to other forms of car finance
  • Fixed monthly payment 
  • Access to the latest in-car technology, safety and engines
  • Don’t have to worry about selling the vehicle at the end of your contract or future depreciation

Downsides to leasing

  • You never own the vehicle and have to hand it back at the end of the contract
  • If you exceed your agreed mileage you’ll have to pay a pence-per-mile charge when the term ends
  • If you don’t take care of the vehicle you may be charged for fair wear and tear at the end of your agreement

Upsides to buying

  • You own the vehicle outright
  • After you’ve purchased the vehicle, you can sell it privately or to a dealer and any profit is yours
  • If opting for Hire Purchase, the monthly payments you make contribute to the purchase of your vehicle
  • There’s no mileage restriction or end of term charges

Downsides to buying

  • Any post-warranty repair bills will be yours to cover
  • Likely to not have up to date tech and safety features
  • Hire Purchase repayments are typically higher than leasing
  • The headache of selling your car when you want to change it

Should I buy or lease a BMW?

So, after everything we’ve covered, it comes down to one question. Should you buy or lease a BMW? 

Hopefully after reading through this guide you’ll know what suits your needs and circumstances. 

If you’d like to have a degree of flexibility, low monthly payments and be able to change your vehicle more frequently, leasing might be the better option.

Whereas, if you want to own the car outright or don’t want mileage restrictions, then buying the car may suit you better.