Thank you to our personal leasing customer, based in Warrington (Cheshire), for visiting the team here to collect their new car – the Mercedes C Class. The customer was actually using a “car allowance” as this was vehicle being used for business. The team do get asked the question quite frequently – should I get a company car or should I get a car allowance (cash)?
When a company car is made available to an employee for private use, there will be a benefit in kind (BiK) tax value which is applied to the car. Taking into account the vehicle value (P11d), emissions (CO2) and private fuel position, you will be able to ascertain your individual monthly company car tax total.
When you are putting together this calculation you need to look at the current tax year and also any subsequent tax years for which you will have the vehicle i.e. 2018-19, 2019-2020 and 2020/1. This is due to the fact that the rate of BIK is increasing year on year (with additional surcharges for diesel).
For a company car driver with a healthy budget, it may be that a purely electric vehicle or PHEV may be available to them. These types of vehicles reduce the level of company car tax payable.
That being said, you need to ensure your style of driving does suit these vehicles i.e. do you have charging stations at your home or business address or are you covering more than 20,000 miles? There is a clearly a budgetary consideration for the company/employer, as low emission vehicles tend to be more expensive and this means that the monthly rentals will be higher. If you speak with your team here, or your credit broker, they will be able to use your car/tax information to calculate your monthly taxation exposure.
In the alternative, your employer may offer a cash for car/car allowance. For an employer this takes a vehicle off fleet, so reduces the company’s risk in that they do not have an insurable risk and they are not exposed to a finance company if the employee leaves the company. In addition, accounting rules are changing in the near future which will see contract hire and leasing vehicles become an “on-balance” sheet arrangement for a company.
Previously, a company did not need to show a contract hire vehicle for accounting purposes – it was known as an “off-balance sheet” product.
For the employee, the cash will provide more flexibility in that they can elect to take this money and procure any vehicle they wish. The main points to consider is that the employee must ensure they calculate the “cash” accurately in that they apply their income tax level, the finance rental, the maintenance rental and insurance costs.
Our advice is always to procure a car which meets their budgetary requirements and is a car which suits the demands of the job (do you need an estate? Do you need an auto?).
Remember, that when you take a vehicle personally this will be based on your personal credit history and the contract will be bespoke to you. If you leave your employer, the contract stay “live” and you will be responsible to pay for the vehicle. As contact hire is a fixed term agreement, you cannot simply return it without any cost implications.
In terms of the car shown here, the Mercedes-Benz C CLASS DIESEL ESTATE C220d AMG Line 5 door 9G-Tronic (Auto), this is based on the following configuration:
· Obsidian Black Metallic Paint
· Artico leather – Black
· Black ash wood trim
· 18″ 5 spoke AMG alloy wheels in Titanium grey
As standard the car includes a reversing camera, agility sports control suspension, artico leather upholstery, cruise control, Led headlights, 18” alloy wheels, green tinted glass, rain sensing wipers, adaptive brake systems, hill art assist, AMG floormats, Bluetooth, active park assist, attention assist, collision prevention assist, dynamic drive mode, analogue clock, Garmin map pilot, AMG bodystyling, twin exhaust pipes, lighting pack, mirror pack, seat comfort pack, storage pack, warning triangle, first aid kit, heated front seats lumbar support and a tyre inflation kit. In terms of additional factory options consider privacy glass, night pack and the surround camera system.
For company car and business users note the P11d at £30,800.00 and CO2 at 120g/km. The 2143CC 9 speed auto engine delivers 60.1 combined MPG, 170ps and 0-62 times of 7.5 seconds. Service intervals are set at every 12 months or 15,500 miles, so do consider the cost implications of a driver-maintained and funder-maintained agreement.
So would you select the Mercedes C Class Diesel Estate as your preferred leasing option? With great options nationwide including the BMW 3 series, Audi A4 and VW Passat or maybe a Skoda Octavia or Infiniti Q50 is a car you’d consider… You are truly spoiled for choice with these luxury cars!
Let us know your thoughts below on the car you would choose to lease…
For the very best business or personal lease deals on the awesome Mercedes C Class TAP HERE @CarLease UK