Can I lease a pre-owned BMW and is it better than buying?

Date Posted 6th July 2020
Read Time 10 min read

Yes, you can lease a pre-owned BMW. Many do. The reason? It’s simple and often more cost-effective than buying. 

But is it better than buying? Well, for that, we have to look into the detail. 

What’s The Difference Between Leasing A BMW & Buying One?

Leasing is a great way of experiencing the BMW lifestyle without having to pay the full cost upfront, as you would for buying.

That’s because, when you lease a car as opposed to buying one, you don’t pay for the whole car in one go, or even at all. Instead, your payments cover the depreciation of the car over the term; or the difference between what the car is worth at the start of your agreement to what it’s worth at the end. 

BMW 4 Series Coupe

But when it comes to leasing or buying it’s not one-size-fits-all. You have options and flexibility. And what you want from the car as well as your circumstances usually defines which financial plan suits you best, although we’ll take a deeper look at that a little later. 

So, what are your options? Well, there are a few. If you want to lease, you can choose between Personal Contract Hire, Personal Contract Purchase or Lease Purchase. Whereas if you’d rather buy, Hire Purchase is often the preferred option. 

Personal Contract Hire

Personal Contract Hire, or PCH, is an agreement where you never own the car. You pay a deposit, if you want to, make monthly payments, then at the end of your agreed term, you simply hand the car back. 

Car Finance Flowchart

Before you take the vehicle, you’ll agree on an annual mileage 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. 

That’s because, as you’re covering the vehicle’s depreciation costs, 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 plan, or PCP, your monthly payments, again, are worked out by the depreciation of the vehicle over your term. 

Like a PCH, you set an annual mileage with the finance company, 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 three options. 

You can still choose to hand the car back, like a PCH. Or, you have the options to either part exchange the vehicle for another or even keep the car by paying a final balloon payment. 

BMW 2 Series Coupe

The balloon payment is usually representative of how much the car is worth at the end of your agreement – essentially, paying its value at the time to keep it. 

If you choose to part exchange, however, you might have the opinion take advantage of your car’s worth, even though you don’t own it. That’s because 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. 

However, it’s important to note that if the car is worth less than your final balloon payment when you part exchange, the difference will be added on to the price of your new car. 

Lease Purchase

A Lease Purchase, or LP, is a little like a PCP but without the flexibility at the end.

The process is the same – you set your mileage, put down a deposit if you choose and make monthly payments – but instead of having three options at the end, like a PCP, with a Lease Purchase you only have one – pay the balloon payment. 

You can part exchange your vehicle at any point throughout your agreement, as you can with a PCH or PCP, but it’ll likely make your next vehicle more expensive. And if you get to the end of your agreement, you have to buy the car. 

Buying Options

If, however, you know you want to own the vehicle outright from the outset, you have two buying options available. 

BMW 8 Series

The first is simply using cash to make the purchase, although that’s not feasible for many. 

The second is a Hire Purchase. 

Hire Purchase

Hire Purchase, or HP, is different from PCP, PCH and LP as you don’t have a mileage commitment. 

Instead, you can make a deposit – although you don’t have to – then pay for the full value of the vehicle over the course of your term, which is usually around four or five years. 

At the end of your agreement, you own the car outright.

What It’s Like To Lease A BMW

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. 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. 

So really, whether you lease or buy, it makes no difference to the exhilarating driving experience. 

How To Lease A BMW

Leasing is a fixed-term financial arrangement between you and a finance company. It allows you to choose the BMW you want and pay for it over a period of time, rather than having one upfront cost. 

However, with several financing options to choose from, we understand it might seem complicated. But it’s not. It’s really a five-stage process. 

  1. You find the BMW you want
  2. Agree your term conditions, for example, monthly payment and mileage
  3. You enjoy your new car while making monthly payments
  4. You either hand the car back, part exchange the vehicle or it becomes legally yours, depending on what time of finance agreement you’ve chosen
  5. Repeat

It’s also simple to start the process. 

An Example Of The Hippo Process

By searching on our website, you can narrow down the BMW you want by style, price, age or anything else that’s important to you. 

You can read up about all the ins and outs, make sure it fits in with your wants and needs and even give yourself an idea of how much it’s going to cost. 

Then, when you’re happy, just send an enquiry. From that, a member of our team will get in touch with you over the phone or by email – whatever’s your preference – and talk you through the finer details of the vehicle and price. 


If you’re happy to proceed, they’ll send off a finance application on your behalf and our team of professional underwriters will search for the best deal to suit your circumstances and credit profile. 

And don’t worry if you have poor credit. There are a number of lenders who specialise in finding a great deal on new and used BMWs for those with less than perfect credit.

After you’ve been accepted, the final bits of your agreement will be arranged before you sign the documents and take delivery of your new car. 

It’s really that simple.


Leasing VS Buying A BMW: Pros & Cons

Whether you lease or buy a BMW depends on what suits your circumstances. There’s a finance option for everyone. 

But which is right for you? If you’re not sure, understanding the upsides and downsides of both buying and leasing may help. 

Upsides To Leasing

  • Flexibility to change your vehicle more frequently
  • Typically lower payments compared to buying
  • Can get the car you want without having to pay a big upfront cost
  • Fixed monthly payment
  • £0 deposit option available on all vehicles 
  • Maintenance costs included on some PCH agreements
  • Don’t have to worry about selling the vehicle at the end or depreciation

Downsides To Leasing

  • You never own the vehicle unless you choose to pay the balloon payment at the end
  • If you exceed your agreed mileage you’ll have to pay a pence-per-mile charge when the term ends
  • You may end up in negative equity, which is where the vehicle is worth less than the remaining finance at the end of your agreement
  • If you don’t take care of the vehicle you may be charged 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 to keep
  • The monthly payments you make in a Hire Purchase contribute to the purchase of your vehicle
  • There’s no mileage restriction or end of term charges

Downsides To Buying

  • You don’t have the flexibility to change your vehicle as regularly with Hire Purchase
  • If you don’t want finance you’ll have to pay for the entire vehicle upfront
  • Any post-warranty repair bills will be yours to cover
  • 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? 

Really, it depends on your circumstances and what you want from the vehicle. 

If you’d like to have flexibility, low monthly payments and be able to change your BMW 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. 

If you’re still unsure whether you should lease or buy your next BMW, it’s best to speak to an expert. They’ll be able to offer guidance and help you discover which is right for you.

If you’d like to speak to a BMW finance specialist, you can contact a member of our expert team via phone, email or over online live chat. Just use the links below. 

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