Thank you to our existing personal leasing customer, from Haydock (St Helens), for collecting their brand-new vehicle from the CarLease team. Having utilised a company car allowance previously (for a BMW 5 series), the customer decided to continue with this approach but needed a car with additional room – the Merc E Class estate was the perfect solution.
Whether or not you should have a car allowance or company car is often a hotly debated topic. In most cases, it will fall down to personal circumstances as to which solution is suitable for your needs and requirements. When you have a company car, you generally have a situation where the employer will pay for the vehicle, the maintenance, the fuel and insurance; an all-encompassing arrangement. While this is a fantastic, and convenient, benefit to have, what you have to be aware of is that it is not “Free” by which we mean there is a cost consequence for you in the form of company car tax. The more expensive and polluting the vehicle, the more expensive your monthly tax bill will be (deducted at source). Unless you are moving towards a pure electric vehicle or plug-in hybrid electric vehicle (PHEV), you are likely to incur some significant outgoings. In contrast, a car allowance is a fixed amount which is paid to you each month, subject to income tax, which allows you to fund a car via a personal contract hire arrangement. You organise the vehicle, maintenance and insurance yourself; the car’s CO2 and value being indifferent to you. The car allowance places personal risk on the driver but offers considerably more flexibility. But, do note that if you have poor or indifferent credit, you cannot lease car personally.
The great thing about lease cars is that all your maintenance is taken care of … a common, but untrue, statement often told by some uneducated customers. A contract hire (or leasing) contract does not provide an automatic right or entitlement to maintenance, by which we mean the servicing, tyre replacement, breakdown recovery and general day to day requirements of a vehicle. All of our vehicles are brand-new, or no more than 3 months old, which is often where the confusion arises from. The fact that a car is new means that it benefits from a warranty from the manufacturer, so that all issues/defects/problems arising through no fault of the driver are resolved at the cost of the manufacturer and its franchised dealer network. However, cars need servicing at certain mileage and time increments and this must be organised by the customer. If you elect for a driver-maintained contract hire agreement, you are undertaking to pay for this process yourself. When you liaise with your broker they will set this proposition out to you. This additional cost needs to be built int your affordability calculations. Remember, that the higher the mileage, the more maintenance your car will require. This is something you need to factor into your costs, as part of a “whole life costs” analysis. Don’t push yourself into a car which you cannot afford to maintain, insure and fuel.
For a risk averse customer the funder-maintained arrangement in contract hire may prove to be better. In electing to go this route you are including the provision for all servicing, maintenance tyre replacement and, in some cases breakdown recovery, for the duration. You still need to physically organise this to be carried out but the costs implications are covered by the finance company we introduce you to. As a broker, not a lender, we work alongside a number of finance companies and they each have a slightly different approach to maintenance. For example, some will include tyre punctures whereas others will only cover wear and tear. In some cases, breakdown recovery is included but is treated as an additional service for others. For a business the inclusion of maintenance reduced the road risk for its fleet and, from an accounting perceptive, offers a cash-flow friendly and tax deductible solution. At CarLease we offer small cards for the driver to place on their keys and in the car so that a one-call telephone number is available in cases of emergency. What we stress to customers is their focus should be on driving and their work, not on negotiating tyre prices and service costs, The reality is that maintenance is often more cost-effective and should not be treated as one “add-on” sale.
As ever, in all cases consider the full facts and make a decision to ensure your needs and requirements are met – don’t save a penny to spend a pound.
In terms of the car shown here, the Mercedes-Benz E CLASS DIESEL ESTATE E220d AMG Line 5dr 9G-Tronic, this is based on the following configuration:
- Selenite Grey Metallic Paint
- Artico man-made leather/Microfibre Dinamica – Black
- 19″ AMG 5 twin spoke alloy wheels in titanium grey with high sheen finish
As standard the car includes 19” alloys, cruise control, climate control, AMG bodystyling, privacy glass, rain sensing wipers, active brake assist, adaptive brake system, hill start assist, AMG floormats, active parking assist with reversing camera, attention assist, blind spot assist, cockpit with 12.3” digital instrument, connect me, satellite navigation, touchpad on the steering wheel, electrically adjustable and heated door mirrors, DAB radio, high resolution 12.3” display, body coloured externals, LED headlights, 3 spoke flat bottomed steering wheel, sports pedals in stainless steel, mirror pack, seta comfort pack, stowage pack, 40/20 split folding seats, heated front seats, keyless start and alarm with immobiliser. In terms of additional options, the Premium (memory package, parking package, COMAND, wireless charging and LED multibeam system) and premium plus (adds keyless go, panoramic glass sunroof and Bumester sound system) upgrades are often a great consideration for the customer.
On the technical-side company car and business users can note the P11d at £42,300 and CO2 at 127g/km. The 1950CC 9 speed auto diesel engine will deliver 61.4 combined MPG (EC), 45.6 (WLTP), 194ps and 0-62 times of 7.3 second. The service intervals on a diesel Mercedes are every 12 months or 15,500 miles.Mercedes E Class Deals – for more information; https://www.carlease.uk.com/deals/mercedes-benz/e-class
So would you select the Mercedes as your next car leasing option? Or would the BMW 5 Series, Audi A6 of Jaguar XF be your next car?