Thank you to our local personal leasing customer, from Golbourne (Lancashire), for visiting the CarLease team to collect their brand-new lease vehicle – the Audi A4.
As you have seen recently, the Audi A4 has gone under a “MY20” revision, where the vehicle has seen some minor external and internal upgrades.
So would the A4 be your select leasing option? Or would the BMW 3 series, Mercedes C-Class or Jaguar XE be for you, or the company?
The model show in the “MY 19.5”, so this doesn’t have all of the latest upgrades.
For many customers, the best time to lease a car (from a cost perspective) is when a newer model launches. As part of clearing the banks, manufacturers and dealerships will use competitive offers to effectively sell the older vehicles so to make room for the newer model.
As many modern cars have all the necessary specification you need, there is often no more than small aesthetic and technological changes happening.
We find that cost per month is a very important driver for most customers and they won’t be offended in paying less for the slightly older car.
Company car or Personal car? This is a question which has consistently plagued many drivers, as they try to work out which is the best way to procure a vehicle. Having a company car has become less and less of a perk over the years due to company car tax. H
aving a company car is not free; when you organise a car with your employer HMRC will be made aware of the transaction and will charge you the appropriate level of tax for enjoying this benefit.
This is where drivers do need to be careful as this will affect their tax/pension moving forwards.
Your employer will have to use the relevant forms at HMRC to accurately calculate your tax exposure. Company car tax/benefit in kind is based on the P11d of a vehicle (its recommended retail price plus any options), the emissions of the vehicle (shown as CO2 per KM) and your income tax bracket. S
ome potential company car drivers will use websites to help calculate their tax exposure on the vehicle and on any fuel benefit.
In short, the more expensive and more polluting the vehicle, the higher the level of tax you pay.
So why do company car cars exist?
It’s not all doom and gloom. For the company, contract hire presents a tax efficient way in which they can operate a fleet. For vehicles with less than 110g/km, 100% of the monthly rentals are allowable against corporate tax. For any more polluting vehicles this will be 85%. For any Vat registered business, up to 50% of the Vat on the finance rentals and 100% of the VAT on the maintenance rentals can be reclaimed.
While IFRS 16 means that contract hire is now an “on-balance sheet” product, contract hire is still a tax effective way for vehicles to be operated and with zero initial rental (no deposit) offers, this is cash-flow effective too.
The growth of electric and Plug-In Electric Vehicles (PHEVs) will see more popularity in the company car market. With HMRC supporting these from April 2020, you may see more customers going into business contract hire vehicles. If you operate an electric vehicle, you will pay 0% BiK. Compared to an equivalent petrol/diesel option, you will be saving any where between £300 to £1000 per month!
So what’s the benefit to the driver? Notwithstanding the tax exposure, you have to remember that the individual driver is receiving a brand-new car for 2, 3 or 4 years from the employer. As part of this they will often get all of their maintenance included (servicing, parts and tyres) plus the insurance can be covered too.
You have to consider whether or not the driver would be able to afford a brand-new vehicle with all of the above. For some company car drivers, they just wouldn’t be able to afford the same proposition.
The interesting development, and maybe conflict, will be with electric cars. The opportunity to have a “free” company car will almost certainly revitalise the UK’s company car market and we may see drivers moving away for cash/personal leasing and into business arrangements. However, electric vehicles are still in limited supply and manufacturers are only just having vehicles produced to satisfy the demand.
You also have the obvious conflict for the company – electric car equivalents are more expensive and they are limited by a range.
For high-mileage drivers, the range ability of the car, or its monthly cost, may not be suitable. A company will be unlikely to change their company car policies just because the individual driver wants to make a tax saving!
For more information on choosing the right fuel for you, or the company, head over to our Car-E-Lease pages at – https://www.carlease.uk.com/car-e/
In terms of the car shown, Audi A4 SALOON 35 TFSI S Line 4dr (Petrol Manual), this is based on the following configuration:
· Glacier White Metallic Paint
· Fine Nappa leather – Black with Rock Grey stitching
· Matt brushed aluminium inlays
· 19″ 5 spoke V design alloy wheel diamond cut titanium matt finish
As standard the car includes heated front seats, hill hold control, electric/adjustable/heated door mirrors, 3-spoke S Line high performance steering wheel, LED headlights with LED rear lights, 19” alloys, cruise control, LED interior light, Audi sound system, acoustic windscreen, blue tinted glass, rain and light sensors, multi-collision braking, traction control, Audi connect safety, Bluetooth, Audi pre-sense collision, parking system plus with front/rear parking sensors, 7” colour screen, SD card navigation,, auto dimming rear view mirror, DAB radio, body coloured externals, S line badges, LED daytime running lights, high beam assistant, front centre armrest, stainless steel pedals S Line exterior styling pack, 4-way electric lumbar support, 40/20 split folding seats, keyless start, anti-theft alarm and Thatcham Cat 1 alarm/immobiliser. In terms of additional factory options consider adding – privacy glass, upgraded 19” titanium alloys and the flat-bottomed steering wheel.
On the technical-side, company car and business users can note the P11d at £32,870.00 and CO2 at 137g/km. The 1984CC 6 speed manual petrol engine delivers 47.1 combined MPG (EC), 38.7 combined MPG (WLTP), 150ps and 0-62 times of 8.6 seconds. Service intervals on a petrol Audi A4 are every 12 months or 9,000 miles whichever lands sooner.
