Like many new personal customers, this was a situation where there was a discussion between a company car OR a car allowance. This is a conundrum facing many drivers who, due to increasing levels of company car taxation (as we are a scheme based around CO2/km) and limited resources of employers (who want to move away from the risks of company cars), have to carefully make their vehicle procurement decision.
One of the main points which gets raised at the outset is – can you lease a vehicle with no deposit? For a car allowance customer, instead of being offered a vehicle (including maintenance, insurance and sometimes fuel) they are being offered a “gross” amount of money per month from their employer to include all of these facets.
The reason that we say “gross” is that a car allowance contribution is subject to income tax, so you need to reduce your budget in accordance with your tax position, to ensure you do not overspend.
Because of this set-up, many customers do not want to make an initial rental (or deposit as it is commonly referred to). Many contract hire websites will advertise their monthly rentals on an initial rental of between 6 or 9 spread. What this means is that if you see a rental for £200 per month and this is based on a 9 spread initial rental, in month 1 you will have to pay £1800, followed by the £200 in month 2 (and onwards).
Clearly this will not be appropriate for you.
When you are researching deals to replace your company car, you need to be aware of the above and carefully select the deals you are looking at. Not all finance companies will allow a no initial rental/zero deposit arrangement, as some do expect some form of financial contribution at the outset. In addition, to lease a vehicle you must go through a credit check, as leasing is a credit-based product. For company car users with bad or poor credit, this means that you will be unable to proceed on this basis. Added to that, is that if you are looking to minimise the initial outlay, you are taking more credit so you do need to ensure you have a strong credit position to proceed further.
Make sure you do this research beforehand, i.e. get an Experian report, so that you do not waste considerable time in procuring a vehicle, only to discover that this is not a route you can proceed with.
In most cases, a “no deposit leasing” situation will be available to the customer. In addition, to match the company car arrangement, you can also include all of your servicing, maintenance, tyre and breakdown recovery costs within the arrangement. To do this, you need to ask the dealer or credit broker to supply you with a funder-maintained quotation. When you include this, you ensure that you are fixing your costs and you therefore do not need to budget for any puncture repairs, services or maintenance. Unknown quantities and costs can cause anxiety to some drivers and this can all be avoided by proceeding with a funder-maintained contract. The only element which cannot be included is insurance.
For ex-company car drivers, their insurance premiums can be expensive if they have years where no-claims bonuses have not be accrued. Therefore you need to a) get an insurance quote on the vehicle you are looking to procure (including business use) before getting a quote; and b) ensure this fits within the car allowance budget.
For company car users, the main advantage is that you can move away from company car tax, which has now become a punitive arrangement. However, do think carefully about the running costs of the vehicle; it may be possible to procure a high-performance car as CO2 is no longer relevant BUT these cars are more expensive to fuel/service/maintain. In conclusion, make sure your company car is fit for all purposes and presents a genuine long-term solution!
In terms of the car shown, the Volkswagen Golf Diesel Hatchback 2.0 TDI 184 GTD 5 Door Manual, this is based on the following configuration:
· Isaac Blue Steel Metallic Paint
· Jacara Cloth – Titan Black/Grey
· 18″ Seville Alloy Wheel
As standard the car includes LED headlights with cornering functions, sports seats, winter pack (heated seats and windscreen washers), navigation, 18” alloys wheels, rain sensing wipers, post-collision braking, electronic parking brake, front and rear carpet mats, ant-tramp function, Bluetooth, adaptive cruise control (with pedestrian detection), driver alert system, progressive power steering, 8” touch screen, multifunction computer, auto dimming rear view mirror, electrically adjustable and heated door mirrors, DAB radio, body coloured externals, twin exhaust pipes, automatic coming/leaving home lights, LED daytime lights, LED fog lights, air conditioning, multifunction steering wheel, stainless steel pedals, ambient lighting pack, mirror pack, pre-crash system, alarm with interior protection, XDS plus electronic differential lock and a space saver wheel. In terms of additional factory options consider adding the electronic panoramic glass sunroof, keyless entry and 19” alloys for a perfect car.
On the technical-side, company car and business users can note the P11d at £28,780.00 and CO2 at 125g/km for a standard car. The 1968CC 6 speed manual engine delivers 60.1 combined MPG, 184ps and 0-62 times of 7.5 seconds. The service intervals on a diesel golf are every 24 months or 10,000 miles, whichever lands sooner.
Find the webs best leasing deals for the VW golf GTD for either personal or business use right here on CarLease UK