Just because you cannot afford to purchase a bimmer does not mean you need to miss out on the sheer driving pleasure they offer. Leasing a BMW can be a cost-effective way of being able to drive a luxurious new car – and you may even have the option to purchase it when the lease is up.
However, much like property, leasing a vehicle is not something you should rush into. The commitment may not be as costly or for the length of financing a vehicle to purchase, but they’re still are important points to consider.
How A Vehicle Lease Works
Whether you lease a BMW or another luxury vehicle the principle is the same. You pay a monthly fee in exchange for the use of the car for an agreed-upon length of time.
In most, if not all, cases, the monthly fee you pay is less than the monthly installments you would pay when financing to purchase a cheaper make or car. For example, you could pay almost $100 less per month leasing a bimmer than you would if you were financing a Honda. This can be an important consideration at a time of uncertainty due to the COVID-19 pandemic.
What Is The Cost Of Leasing A BMW?
Several factors are applied to calculating the cost of leasing a luxury vehicle such as a BMW. Basically, the size of the monthly payments depends on whether you put down a deposit, and on the size of that deposit. You can lower the size of your monthly payments by putting down a larger deposit.
However, luxury vehicles generally are not leased at a standard rate. The rates usually vary from customer to customer, and they’re not only based on the make and model of the car.
One of the factors that can determine the cost of leasing a BMW is the Manufacturer’s Suggested Retail Price (MSRP), which is the cost of a new car. Being a suggested price, you may be able to negotiate a lower one with the agency or dealership. If you manage to bring the price down, the new price is known as the capitalized cost.
Another factor involved in working out the cost of leasing the vehicle is the depreciation, which is the amount by which the car will decrease in value during the lease period. The interest rate or lease rate is also factored into the cost.
Will I Get My Deposit Back?
An important aspect of an agreement for a BMW is whether the deposit will be funded once the lease is up. Most leasing agencies and dealerships do refund deposits, provided any relevant conditions have been met. However, not all leases include refundable deposits, so make sure you clarify that point when signing the contract.
Is Vehicle Maintenance Covered By The Lease?
One of the benefits of leasing a new BMW is that the standard costs of maintenance are covered by the monthly fee. Being a new car, it will still be under warranty, which covers the cost of servicing, oil and other fluid changes, tune-ups, and more.
Again, the specifics can vary from lease to lease, and from dealership to dealerships, so it is important to clarify the specifics before proceeding with the agreement.
Are There Limitations Or Penalties?
Another important aspect of a lease for a BMW is the limitations placed on the use of the vehicle, as well as any penalties or other charges that may be incurred. One such limitation is the mileage allowance, which will be specified in the lease agreement.
The mileage allowance is the maximum number of miles you can drive the car in 12 months, which usually ranges between 10,000 and 15,000 miles. The dealership usually will impose a penalty fee if you exceed the allowance. Most leases also include the charging of penalties if a monthly payment is made late, if you terminate the agreement before the agreed-upon date, and for excessive wear and tear.
What Documents Do You Need When Leasing?
Whether you visit a dealership or agency once the lockdown due to the COVID-19 pandemic has been lifted, or you find a dealership that is willing to collect them from you, you will need various documents and certified copies when leasing a BMW.
Those documents usually include a valid driver’s license, proof of residence, an insurance card, trade documents, your two latest pay stubs, and a list of references. Your references cannot include people who live in the same dwelling as you.
Can A Leased Vehicle Be Purchased?
Many luxury vehicle leases include the option to purchase once the lease is up, or even before that date. The price that you would pay depends on various factors, such as the residual value, which is the vehicle’s wholesale value at the end of the lease period. If you decide to purchase the car before the end of the lease period, you may need to factor in a termination or cancellation fee.
How Do I Return A Leased Vehicle?
A situation such as the COVID-19 lockdown has made it difficult for customers whose leases expire at this time to return the vehicle. Usually, you would return the BMW to the dealership from which you leased it, although this may not be essential. Many dealerships will allow you to return it to another authorized BMW dealership.
Other options during lockdown situations include asking the dealership for an extension of your lease, or, asking the dealership for a replacement vehicle to be delivered. The latter would require a new lease.
Points To Remember
If you decide to lease a BMW you can improve the overall experience by doing the following: lease a new vehicle rather than one that has been pre-owned, negotiate the terms of the lease, make as accurate an estimate of your mileage as possible, improve your credit rating, and request the best trim package.
Essentially, leasing puts behind the wheel of a brand new BMW at a much lower cost than buying one would. Plus, it could well put you in a position to trade-in for a newer model every few years with minimal hassle.
