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Lease finance is future of car sales, says BMW

Within 10 years the majority of UK car owners will no longer be buying their cars – they'll be leasing them. That's the vision of BMW, which expects its rising finance penetration – last year 37 per cent; this year 41 per cent – to continue. Frank Munk, chief executive at BMW Group Financial Service GB, predicts that the UK will follow the example of the American market where drivers have no interest in owning their cars.

“They simply go to their dealership and say I can afford £500 a month, what can you offer me,” he says.

Munk's boss, BMW Group director of financial services Guenter Niedernhuber, agrees: “It makes sense to me for people to finance their cars. Why would they want to invest in something that depreciates?” he asks. “Buying cars on finance and giving them back at the end of the contract protects residual values. It's the future.”

BMW's view is not new, but it is the first time a premium carmaker, which relies on the emotional purchase, has openly predicted that traditional methods of ownership will not continue.

In 1999 consultant Michael Jackson told Automotive Management that cars would become 'white goods' commodities and that people would lease them on short-term contracts to fit in with their lifestyles.

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