Should I be looking for the best electric car leasing deals now? How much are they going to cost me or my business?
2019 has proved to be a watershed moment in the world of engines, as we have experienced an almost sudden and immediate shift from traditional combustion methods (petrol and diesel) across to alternative fuels in the form of hybrid, plug-in hybrid electric and purely electric vehicles. The move across to the new forms of energy are not without consideration and issues; the change in attitudes and culture will take some time (think the move from dial-up to broadband in the internet world).
Fundamentally, we are going towards electric (and maybe hydrogen) solution for our transport.
This isn’t something which might happen, it very much will happen, as regulation, policies and product begin to change. However, we are still early in the process and, as we will detail below, there are still some minor roadblocks which could see 2019 as more of a progression year.
Firstly, a thank you to the fleet team over at Sutton Park Group Kia in Coventry for arranging our customer’s new electric car and for sending us pictures of their new electric car demo – the Kia e-Niro.
As a credit broker, not a lender, we work alongside a select number of finance companies and dealerships to provide solutions to personal and business contract hire customers all across the UK.
We are not actually providing the finance to our customers nor do we physically deliver the vehicles to our end users; we are very much the conduit in this process.
Our actual customer, a Sale (Cheshire) based business, contacted our Car-E team following some of our recent reviews at electric expos/events and product launches.
Like many progressive and forward thinking businesses, they realised there are changes happening and they wanted to jump into this earlier rather than offer needless resistance.
However, as customers are finding out now, 2019 is proving to be a tough year for supplying electric cars – the demand is now far outweighing supply and for many manufacturers (including Kia), anything electric will be unlikely to be delivered this year. For many of our manufacturers they are quoting delivery times of 2020. So in answer to our original questions – you should be looking for your next electric lease deal NOW but with a view of a 2020 delivery.
This means being organised so for any of our business leasing customers we are suggesting:
1. Test-drive the product – there is an ardent mixture of budget and premium brands offering electric vehicles. You can lease vehicles with list prices of anywhere between £25,000 and £125,000. There is no one size fits all solution;
2. Speak to your accountant – start to understand how your company car tax position will change if you take a vehicle with zero emissions. Also consider how this will help your company in offsetting rentals against corporation tax;
3. Invest in infrastructure – electric cars need to be charged. This means you need a charge point that can do this for you. While there are Government and local authority grants available, you need to do the research and find out how your business or home can benefit from a charge point. For bigger companies, they may consider a number of points in order to help their employees make the transition; and
4. Local resources – have a look at the local area to see where charge points are available to you. Companies like Zap Map are offering an integrated online service to show you where you can charge the vehicle. You also need to ensure you know where your dealership is based to service the vehicle.
Electric cars are fundamentally different to your combustion engine and your local mechanic is unlikely to be able to assist.
For our customer, a couple of other key points were fairly pertinent in the shift from combustion to electric. The first consideration was company car tax. As a director, and employee, the customer realised that they had been paying excessive amounts per month in tax on their diesel SUV.
As any company car driver knows there is no such thing as a free car – HMRC will deduct at source for you enjoying the use of a business car.
The more expensive and polluting the vehicle is, the more company car tax you pay per month.
Add to that a “diesel supplement” of 4% on the Benefit in Kind and you have a situation whereby a non-RDE complaint vehicle could be costing you quite a lot personally. In contrast, a vehicle emitting zero emission will attract a BiK of 16% for 2019/20 but in 2020/21 this will drop to an impressive 2% (so long as the vehicle can travel 130 miles of more on its electric charge).
For a company car driver this actually creates a situation whereby an electric car is a free company car. For the director in this instance, this made financial sense on a personal level. Added to that is that a car emitting 110g/km of CO2 can claim back 100% of the finance rentals against corporation tax. As their previous car was emitting above this amount, they could only claim back 85%. It therefore made more financial sense for the business too.
The other element which they noted was the shift towards a clean air zone (CAZ) in the Manchester area.
The CAZ is different to the congestion zone, low emission zone and ultra-low emission zone which is now in operation across London.
As many have seen, London has been forthright in making significant changes in how vehicles operate in certain areas and how their emissions/pollution will lead to severe financial penalties.
While Manchester has yet to introduce any congestion type zones yet, they will be introducing a CAZ, as all local authorities are under a legal obligation to do so.
In a recent Go Electric! Expo, the Transport for Greater Manchester (TfGM) considered that CO2 and particulate matter was accounting for 80% of the pollution across the region and that transport was something which needed resolving. Via Governmental support, in 2021 the Manchester region will become a Class B zone (affects all buses, coaches, taxis and HGVs) and in 2022 this will be a Class C zone (LCVs to be affected). There is no immediate obligation on cars just yet but for any vehicles falling within these categories, there will be restrictions on travel and/or charges and fines for entering certain areas.
For the forward-thinking businesses in Manchester, there is a pressing need for an vans/LCVs and a medium-term need to change cars.
In terms of the car shown here, the Kia E-NIRO ESTATE SPECIAL EDITIONS 150kW First Edition 64kWh 5dr Auto, this is based on the following configuration:
· White Pearl Metallic Paint
· Leather – Black
· High gloss black lower console trim
As standard the car includes privacy glass, rain sensing wipers, solar glass, auto hold function, emergency stop signal system, hill start assist control, regenerative braking system, apply car play/android auto, Bluetooth, wireless smartphone charger, driver attention warning, front and rear parking sensors, lane following assist, lane keep assist, reversing camera, smart cruise control, 7” supervision cluster and 8” touch screen with sat nav, kia connected services, auto dimming rear mirror, electric adjustable and heated folding door mirrors, body coloured externals, automatic headlights, fog lights, high beam assist, LED daytime running lights and indicators, welcome home and follow-me home headlights, automatic air conditioning, projector headlamps, heated steering wheel, leather trimmed steering wheel, leather upholstery, advanced driver assistance pack, 60/40 split folding seats, 8-way electric adjustable driver seta, heated front seats, anti-theft alarm with immobiliser, smart key entry system and 17” alloys. There are no additional factory options you can add to this vehicle.
On the technical-side, company car and business users can note the P11d at £37,025.00 and CO2 at 0g/km. The 64kWH lithium-ion battery will deliver a max range of circa 282 miles, 201ps and 0-62 times of 7.5 seconds. The Niro will take circa 8 to 9 hours on a 7.2kW charger to fully charge and 1 hour 30 mins – 2 hours on a rapid charger (50kW). Service intervals on an electric Niro are every 12 months or 10,000 miles.