Thank you to our business leasing customer, from Norwich, for sending through pictures of their new fleet addition – the BMW 3 series PHEV.
Like many company car users, the driver we spoke to was very cost-conscious about company car tax. As such they entered into a conversation with our sales team – should I take a car allowance or should I take a company car?
This is a very common question which we do get asked but it is not something which can be answered without taking into account some pertinent facts.
When you take a company car, you need to understand that as an employee this is considered as benefit in kind (BiK) and you will be charged an amount per month (deducted from your salary).
The amount of tax you pay is based on the Co2 per Km (we are a tax regime based on emissions), the P11d value of the car and of courses your income tax position.
Put simply, the more polluting the vehicle and the more expensive it is, the higher the level of tax you will pay.
In some instances, the amount of tax you pay outweighs what you would pay if you pursued a personal contract hire (PCH) or personal contract purchase (PCP) scheme under a car allowance.
What we also need to stress is that over the next couple of years, the tax regime is becoming more and more punitive against company car drivers.
For example, in 2017-18, a car emitting 120g/km of Co2 would have a 23% BiK whereas in 2020-21 this will become 29%. Many affordable cars typically emit in and around 100-120g/km, so this is very concerning. Added to this is a diesel supplement which from April 2018 will see 4% added onto the BiK for those drivers using a diesel vehicle (which does not meet the Real Driving Emissions Step 2).
Added to the above, is the confusion being created by Worldwide Harmonised Light Vehicles Testing Procedure (WLTP). This officially applied for all new cars (in this sense new being “new” to the market) from September 2017. All cars which are registered from September 2018 must adhere to these new standards with the exception of those on a derogation list. What WLTP will bring is more in-depth testing (still in the laboratory) – longer testing periods, higher speeds, more gears and including specification etc. For more info check out – http://wltpfacts.eu/
To compliment the above, the Real Driving Emissions (RDE) testing will be introduced to measure the pollutants on a vehicle such as NOx. This test will see an attachment to the exhaust to monitor the pollutants on the vehicle and provide more detail on genuine “on the road” conditions. This will measure low and high altitude, urban roads, rural roads and additional payloads.
You may have noticed recently that diesel engines have received a lot of negative press. Much of this is because a diesel is more “dirty” than what was previously thought.
This has led to changes, with manufacturers proving better advice to customers, in particular those without a suitable driving behaviour, and also the introduction of AdBlue. Customers should not be alarmed about diesel vehicles, as manufacturers are resolving/improving their engines. Some of the hysteria is not well founded.
With this in mind, company car drivers have been looking into alternative solutions so that they can procure quality vehicles but without being penalised on company car tax.
The introduction of hybrid, plug-in hybrid electric and fully electric vehicles has somewhat improved choices to drivers, as these vehicles typically have lower CO2 (albeit a higher P11d).
The small issue with these cars is that the Government has recently announced a change in the grants (source) which will effectively see many cars losing their grant status. Category 1 cars (less than 50g/km and range of 70 miles) will from 9 November receive £3,500, instead of £4,500. For category 2 (less than 50g/km and range of 10 – 69 miles) and category 3 (50 – 70g/km and range of 20 miles) there will no further grants. Previously, cat 2 and 3 would receive £2500.
As we will discuss in later blogs, this may influence both the company and the individual driver as to which car they should choose next and whether they should have a car or an allowance.
In terms of the car shown here, the BMW 3 Series Saloon 330e M Sport 4 Door Step Auto (Phev), this is based on the following configuration:
· Alpine White Solid Paint
· Hexagon Aluminium Trim with Estoril Blue Matt Finish
· Dakota Leather – Black
· 18″ M Star Spoke Alloy Wheels – Style 400M
As standard the car includes navigation (Business advanced), Bluetooth, M Sport steering wheel, dakota leather, LED headlights, cruise control, heated door mirrors, 18” alloys, m sport suspension, green tinted glass, hill start assist, front and rear velour mats, front/rear parking sensors, BMW online services and teleservices, digital clock, real time traffic information, auto dimming rear view mirror, electrically adjustable mirror, DAB radio, body coloured externals, guide me home headlights, LED daytime running lights, LED fog lights, air conditioning, gearshift paddles, extended lighting pack, extended storage pack, warning triangle and first aid kit, remote alarm, immobiliser and front sport seats. In terms of additional specification considering adding – sun protection glass, heated front seats and the comfort access system.
On the technical-side, company car and business users can note the P11d at £39,495.00 and CO2 of 49g/km. The 1998CC 8 speed auto petrol engine is supplemented by a Lithium-ion battery which offers 23 mile range. Combined MPG is set at 134, the output is 252ps and the 0-62 times are 6.1 seconds. Service intervals on the PHEV 3 series are every 24 months or 18,000 miles (an ideal proposition for a low mileage 2 year contract).
In light of the above, which PHEV car leasing option would you select (if any at all!!??) – the BMW, the Mercedes C350e or maybe even the Mitsubishi Outlander PHEV or perhaps the cheaper Toyota Auris Hybrid would welcome you to the world of electrified vehicle leasing..? Even the VW Passat GTE might be more your thing…
Find the webs best deals on the electric BMW 3 Series right here @CarLease UK or check out some of the other PHEV and Hybrid vehicle reviews below…