It's not so unusual for larger car manufacturers to have an internal financing operation. Toyota has its own ( Toyota Financial Services ), for instance. So, what's the story behind BMW Financial Services (BMW FS)? Its the BMW division that provides loans and leasing to customers in the U.S., Europe, and across the globe. BMW FS also serves other brands "in the family," including Mini, Rolls-Royce, and BMW Motorrad.
Read on as we review how BMW Financial Services operates and the programs it provides.
Background: BMW Financial Services
Known formally as BMW Bank GmbH, and as BMW Group Financial Services, the financial arm of German auto giant BMW launched in 1981 in Munich. The company offers a wide range of financial services and products, including car leasing, loans, subscriptions, protection plans, insurance, and even credit cards.
As things stand, the company finances about 75 percent of all the BMWs sold or leased in North America through its network of licensed dealers. BMW FS is known for providing strong incentives to those who carry credit scores of 670 or above. These offerings can include 0.00% APR deals and special terms like extra mileage and the waiving of some fees on lease deals.
How Does BMW Financial Work?
The principal business of BMW's financial wing is to provide auto loans and lease contracts to buyers and lessees of used and pre-owned cars. Buyers and prospective lessees can apply directly to BMW Financial Services online or go the more typical route to visit a BMW dealership where the financing gets handled as part of the purchasing process.
While using BMW Financial Services is clearly the most convenient option, BMW doesn't hold a monopoly over financing for its customers. Pre-approved auto loans from other banks, credit unions, or different lenders work just the same. For this reason, it's always a good idea as a buyer to shop around to ensure you're getting the best deal.
BMW-sourced financing is only available through franchised BMW dealerships. In other words, it's not an option at an independent dealership selling pre-owned BMWs, for instance. Here are some basic facts about BMW Financial Services lending:
- Maximum loan period for new BMW Group vehicles: 72 months
- Best deals typically available: 0.0% APR up to 60 months on EVs
- Best APR on coupes/sedans: 0.9% APR for up to 60 months
- Best APR for high-end models and SUVs: 1.9% APR for up to 60 months
Incentives and Offers
Financial incentives play a large part in helping BMW remain competitive in the high-end vehicle market: luxury executive sedans, luxury SUVs, and luxury sports cars. These actions also help ensure that BMW FS handles most of the financing for the vehicles sold through BMW dealerships. We've already mentioned low-APR deals, but there are many more:
Zero Down Payment
As the name suggests, this allows qualified buyers with strong credit ratings to finance their new BMWs with no money down.
BMW i Financing
On top of U.S. federal tax credits worth up to $7500 for purchasing a new EV, BMW offers additional financing to help pay for the installation of a home charging station when purchasing one of BMW's electric vehicles.
Customer Loyalty Credit Program
If you've owned a BMW in the past 12 months that was also financed through BMW, you can get an extra $2,750 to $4,000 credit, depending on which model you choose.
As with most other automakers, BMW offers a discount for active military personnel, as well as retired personnel, veterans, and family members of anyone in the U.S. armed forces.
There are two main corporate sales programs. The Group Corporate Fleet Program offers discounts for corporations that buy BMWs via a fleet management company. The Corporate Sales program provides various incentives for companies and organizations that partner with BMW.
Another common incentive among automaker financial companies is a college graduate program. BMW FS offers up to $1,000 on a new or certified pre-owned vehicle. An applicant must have graduated from an accredited college within the past 24 months or be graduating in the next six months and have a job lined up.
BMW FS also offers other incentive programs, which may change or get modified periodically:
- Mobility Program: Up to $2,500 of reimbursement for installing adaptive equipment in a new or certified pre-owned BMW.
- Lease Credit: A reduction in the capitalized cost of a lease; this may vary based on the model and dealer contribution.
- Balloon Financing: Lower monthly payments accompanied by a large final payment.
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Who is Eligible For BMW Financial Services?
As with many lenders, eligibility depends on many elements, but credit score and credit history are the largest determining factors. Income, down payment size, and the BMW model also play a role in BMW FS financing. For example, a buyer might not qualify for financing a $75,000 top-of-the-line BMW M3 but could possibly get funding for a $45,000 base-level 3 Series sedan.
Most BMW shoppers will apply for financing as part of this purchasing process; this kills two birds with one stone. However, an applicant can apply directly on BMW FS's website, but such an approach can carry risks. A credit application counts as a hard inquiry against your credit report, which can lower your score. It's not an issue if you're able to promptly purchase or lease a BMW, but any delays or the search for a different vehicle may result in more expensive financing.
Regarding the incentives described above, eligibility depends on the particular program. There are clear parameters, for example, when it comes to the military veteran program and the college graduate program. It gets a little more complicated and harder to judge when looking at the low APR deals.
BMW's own words are that "highly-qualified buyers" are eligible for the low APR rates, but this gets decided on a case-by-case basis. There should be smooth sailing for a favorable interest rate. If you have an excellent credit score and a sufficient down payment. In the end, the only way to be totally sure whether or not you qualify is to go to a dealership and try to get financing on a new or pre-owned BMW.
BMW Financial Services: Leasing
The leasing agreements available from BMW's finance wing are a good alternative for those who hope to get more car for the money but prefer a lower monthly payment (compared to traditional financing).BMW leases range from 24 to 48 months in length and come with standard annual mileage limits of 10,000, 12,000, or 15,000 miles.
A first-time BMW lessee may not qualify for incentives and fee waivers, but repeat customers may be eligible for things like an extended annual mileage allowance or the waiving or discounting of certain fees.
At the end of the lease, BMW offers a standard range of options:
- Lease the same vehicle again.
- Lease a new car.
- Buy out the lease with a final balloon payment.
- Return the vehicle and don't sign a new lease.
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Pros and Cons
Let's wrap things up by looking at the advantages and disadvantages of using BMW Financial Services.
It's hard to overstate the convenience of financing a BMW through an authorized dealership. This step may also open up access to select incentives and special offers. These are things not available when financing through other sources or purchasing at an unaffiliated dealer. Going through BMW FS is also ideal for someone who envisions owning a BMW now and in the future as the company rewards customer loyalty.
On the negative side, getting access to higher-level incentives requires a strong credit rating. At the same time, becoming a loyal BMW buyer requires spending large sums before meaningful discounts and incentives kick in. Further, the deals are only available at authorized BMW dealerships, restricting shopping options.