BMW dishes out loans and sets up hire purchase scheme to boost sales
EVEN motorists who like to have their posh posteriors on BMW seats have their cashflow problems in a jittery economy. Many would like to be driving in a new model with 2012 registration plates, but committing hefty financial outlay to get their hands on a beemer means many are putting the purchase on the long finger.
The problem is not the cost of running a BMW these days. Models right up to their highly popular 520d are all in the Band A tax bracket with just €160 annual road tax, and fuel returns of up to 5L/100km (53mpg) are attainable. The problem is disposable cash, or more correctly, the lack of it.
Realising the problem BMW Financial Services, BMW's money arm, is dishing out money to help sales. In its first full year, €89m was loaned to Irish car buyers with 75 per cent of applicants accepted, and dealers were loaned €150m of support money. Last year the total financial outlay was €0.25bn, with 7,000 motorists doing loan business in the first 15 months, and some rates as low as 4 per cent APR on the new BMW 1 Series.
The company also has set up a variable hire purchase scheme which can be spread over two to five years, which is unique in the market as it is available in every car across the range. There is also a scheme that guarantees the future value of a model under loan agreement whereby the motorist has the choice of part-exchanging, keeping the car or returning it under a Guaranteed Minimum Future Value scheme. BMW say this is growing in popularity as deposits of as little as 10 per cent can apply with contracts up to 36 months.