There are many variables to consider as to what method of purchase is best based on individual criteria.
Personally, I looked at
- Best use of my capital
- Discount
- Residual value risk
- Option to own v UK lease (affects insurance product)
In my case, UK PCP, a form of Hire Purchase finance with an ownership option, offered the best solution.
Capital - 2.99% BMW finance and the capital not used to purchase the car outright is now earning > 6% interest tax free. Win for me.
Discount - At the time of order, I had no trade-in and negotiated £9k off MRSP on new car order. Win for me.
In four years' time, I have no idea of the residual of a diesel car in the UK, hence I would prefer BMW to shoulder this risk. If the residual value in four years is higher than the PCP GTV; I can choose to sell/trade the car and have equity, or pay the balloon payment and just keep the car, or if the residual is poor, and less than the GTV, just walk away. Win for me on flexibility/risk.
YMMV.
