Add to del.icio.us

BMW branches into Mortgage Lending

Financing a car and a home at the same time can be a very expensive task to take on. This is especially true if you are a consumer of expensive, foreign cars such as BMW, Mercedes Benz or Audi.

But now, BMW has made the process of financing a car and a home easier by launching a new mortgage lending department, where it will launch the new product in Australia.

According to the article, “BMW shifts to top-gear in home loan market,” by Ian Porter featured on the Australian website Theage.com on July 31, 2006, the popular car company is looking to expand its reach in society.

While some of its models might cost as much as a small house, BMW has come up with a new scheme that should allow the typical BMW driver to have his car and keep his house too. “BMW has decided to branch out into mortgage lending, and has chosen Australia to launch the product.”

Since BMWs are known to be one of the most expensive cars on the market, and a leader in the luxury car industry, financing one can be quite pricey. It has only been quite recently that BMW has even had a financing department.

Now, BMW financial services is 35 years old and they are financing many more cars than they used to in the past.

“ ‘It's about establishing more 'touch points' with the customer,’ said David Hannah, managing director of BMW Financial Services Australia. Mr. Hannah said mortgage finance would sit next to vehicle financing, car insurance and the BMW credit card, although it will only be available to BMW owners.”

Although BMW was previously known only as an automobile manufacturer they do have other services. Now that they will be doing mortgages, they still do not recommend consolidating your car payment with your mortgage payment. This is just an all around bad idea.

BMW cars have never been inexpensive and Mr. Hannah says they will not be marketing their loan products as “cheap” either.

“Mr. Hannah said that, while the lending rates would be competitive, the BMW mortgage loan would not be positioned as a cheap product. ‘We don't discount our cars,’ he said, indicating that the same policy will apply to mortgage lending.”

One of the perks of the BMW mortgage products is that there will be a variety of loan products to choose from and there will be none of the fees that other mortgage lenders put in place.

“However, there will be none of the fees other mortgage lenders use to raise their overall revenue from a loan. ‘It will be the same as for our car finance. There will be no establishment fee, no settlement fee and, for a house, no valuation fee,’ he said. Although no targets have been set for the new product, Mr. Hannah is hoping to emulate the success of the car financing and insurance products.”

Back to Articles