18-months lease programme could appeal to those who switch cars often, or have big financial commitments on the table

– Updated June 7, 2019 with Audi leasing comparison for Audi A3

SINGAPORE – BMW Financial Services has announced a new long-term car leasing programme dubbed Flow.

Its main draws are the 18-month lease period, currently the shortest lease period for cars in Singapore, and lower upfront costs. BMW also says that as a leasing product, Flow does not affect the customer’s Personal Total Debt Service Ratio.

“It’s an all-new mobility programme that allows you to enjoy the luxury of driving a BMW without the significant initial investment that comes with purchasing a new car,” said Christopher Wehner, the managing director of BMW Asia.

CarBuyer’s take? Suede says ‘Everything will flow‘ but they’re wrong in this case.

BMW Flow is another choice for car buyers, although it obviously won’t replace traditional car loans/ownership. It’s an alternative to buying a car that will be attractive to those who are considering major loans for other things, such as a home loan.

Want this view every day? BMW Flow could help you there…

The main appeal of leasing programmes are the lower upfront costs required, although the monthly payments can be higher than that of a typical hire purchase car loan.

BMW will still offer traditional Comprehensive leasing alongside Flow. The current minimum length of a typical long-term lease (aka Comprehensive leasing, as opposed to short-term rentals) contract is 24-months.

Prices range from $2,600/month with a $16,000 sign-up fee for a BMW 216i Gran Tourer, $3,720/month with a $23,000 sign-up fee  for a 330i Luxury, and $3,588/month with a $27,000 sign-up fee for a 520i Sport.

READ MORE: We’ve tested BMW’s latest and greatest – the new BMW 330i M Sport 

We’ve crunched the numbers (see ‘The Numbers’ below) and find that in terms of cost per year, Flow is more expensive in the short term, but at the maximum lease period of 60-months/five-years, Flow can be slightly cheaper than traditional hire-purchasing.

The big downside is that the customer does not own the car at the end of the 60-month period. On the other hand, you don’t have to sell the car, you can switch to another car (for another sign-up fee), and Flow includes insurance, servicing, and has a flexible termination period (after 18-months).

So who might gain from Flow-ing?

It may be appealing to people who 1. Change to a new car every few years or 2. Who intend to make a major financial commitment, such as a housing loan, and who still wish to drive a BMW, since BMW says that Flow doesn’t affect your Personal Total Debt Service Ratio (i.e. Singapore’s version of a credit score).

Using DBS’ mortgage calculator, a $2,600/month car loan on a $5,000 salary brings your eligible loan amount down from $668,085 (over 30 years) to just $89,078, so the Flow option could be attractive – even if it’s not the most sensible thing to do at that income level.

That said, we urge CarBuyers to do as much research as possible before signing off on a big financial commitment like this one.

There is no early termination fee, but the minimum lease period is 18-months, so even if leasers wish to end early, they still have to make payments for the full 18-month period.

Those interested in signing up for BMW Flow can contact dealer Performance Motors Limited. 

You can read the full FAQ with pricing examples here.

The Numbers

A BMW 216i Gran Tourer Sport, which costs S$160,888 with COE, requires $64,355.20 (40 percent downpayment) a monthly payment of $1,373, assuming a seven-year loan term and 2.78 percent interest.

The same car leased under BMW Flow requires a S$16,000 sign-up fee and S$2,600 monthly. Those who lease the car for the full 60-month term get the sign-up fee back.

Another draw of the programme is the fact that it offers cash rebates if you lease the car longer than 18-months. The rebates are offered monthly from 19 to 60 months (60 months is the maximum lease period) and vary by model.

In comparison, Mercedes-Benz Financial Services offers leasing under Mercedes-Benz GO. An A 200 Progressive (current price $168,888 with COE) on a 60-month lease is $2,456/month with a $7,386 security deposit. For the minimum 24-month lease, it’s $8,464 security deposit and $4,323/month.

Annual cost: Flow versus Hire Purchase

Audi Singapore has provided the leasing costs for an Audi A3 Sportback 1.0, which works out to a slightly lower annual cost than a BMW 118i on flow, and requires no upfront fees.