The BMW brand is known for its high-end luxury vehicles with cutting-edge technology and stylish designs. Buying a BMW can significantly impact your business, and finding a suitable model that fits your needs can unlock new profit opportunities and streamline your internal processes.
But what if you are a sole trader or small business owner without a budget to buy a brand-new BMW? The solution is a business car lease, and car leasing is far more cost-effective and makes more financial sense than buying it outright.
Not only is leasing a vehicle for your business an effective money saver, but it can also lead to greater financial independence. Continue reading to find out how much you could pay and how much you will save with the best BMW leasing deals.
What Should a BMW Lease Cost?
The main difference between leasing and buying is that you do not own the car at the end of your lease agreement. Leasing is also a much more affordable way to drive a brand-new BMW. Let’s compare the difference in price regarding leasing and vehicle finance.
Vehicle Finance – Hire Purchase
Suppose you want to drive the luxurious BMW X5 XDrive 30d. The on-the-road cash price for the vehicle is £68,820. If your Business Hire Purchase agreement is for four years, your deposit will be £6,886.94, and your monthly repayment will be £1447,77. At the end of the four years, with the fixed interest rate of 5.9%, all your payments, including fees, will be £76,359.90.
Business Car Leasing
To lease the BMW X5 XDrive 30d, you will need to pay an initial payment of £9,914.11 upfront. A four-year business lease agreement will see you paying a fixed amount of £801.28/per month, including the broker fees. At the end of your lease agreement, you would have paid £47,574,24 (the amount includes interest and additional fees, leaving you with an average amount of £991.13).
How Much Do You Save?
Let’s compare the amount you save when you lease the BMW X5:
- The difference in the monthly amount you pay is £646,49
- Compared to buying the same BMW, your total savings are £28,785.66.
Once you have bought the car, it is yours. Your business could have grown by the time your lease agreement ends after four years, so your needs may have changed. Depending on your business requirements, you can lease a vehicle every two to four years. You can use the four years to take stock and assess what kind of business car you need.
What Is the Difference Between an Initial Payment and a Deposit?
You may have noticed in the above examples that the initial payment when leasing a car was much more than the deposit when buying a car. There technically is no difference between a deposit and an initial payment, except paying a deposit is refundable, and an initial payment is not.
Initial payments reduce the amount of your lease deal’s monthly repayment. They are taken off the total cost of the lease deal, with the remaining amount spread equally over monthly repayments until the end of the contract.
In other words, the higher your initial payment, the lower your monthly repayment. If you select a no-deposit car lease, the initial payment is included in your monthly repayment, which will result in your monthly repayment being much higher.
You must pay the initial payment upfront before collecting or receiving the leased vehicle, usually via bank transfer or paid by credit or debit card.
The good news is that when you use a comparison site like Lease Loco, you can find the best BMW leasing deals with low initial payments.
What Happens if You Don’t Pay the Initial Payment?
Failing to pay the initial payment by card means that the leased car will not be delivered or you cannot collect it. If you pay it via bank transfer and it has been declined for any reason, the consequences are that you will not receive the car and your bank will mark it as a late payment that can negatively affect your business’s credit score.
Final Thoughts
As a sole trader or small business owner, the financial benefits of leasing a BMW are far more significant than buying one. If you are trying to keep your overall costs down, leasing is the most economical option for your business. You can use the extra money you save towards growing your business!
