Advice on car finance deal (Business Lease)

[markjay]

What do our resident experts say... does this look like a good deal?

MERCEDES-BENZ C CLASS SALOON C200 AMG Line Premium 4dr Auto

Any obvious pitfalls?

Thanks you...

 

[markjay]

It works-out as £8,695.00+VAT over the two years period.

At £4.2k a year... this looks like the depreciation the car would incur anyway if bought new outright...?

 

[Simon_M]

18 month lease though isn't it? Very short.

 

[wemorgan]

That's a £33k car for £9816 over 18 months. Looks expensive to me. 18 month deals make the deposit increasingly significant.

My two benchmarks for lease deals are:

SLK 250CDI RRP £38k, 2 year lease = £8700 or £360/month ie. 23%
BMW 125D RRP £29k, 2 year lease = £5500 or £230/month ie. 19%

in short ~£100/month per £10k of RRP looks like fair value IMHO.

 

[Dryce]

The up front isn't bad for a short lease - though there are fees in there that make it look more like a 5+17 than a 3+17.

But the bottom line is that it looks expensive for a C Class.

I'd be looking for an E or a CLS on that pricing (though I guess beware the BIK if you;re getting it as a company car).

 

[Primo]

I've just secured this for a member of my staff:

Mercedes C220 BlueTec AMG Line Auto 4Dr Saloon
[FONT=&quot]Metallic paint
[/FONT]
[FONT=&quot]Term [/FONT][FONT=&quot]3 years[/FONT]
[FONT=&quot]Mileage P/A [/FONT][FONT=&quot]14,000[/FONT]
[FONT=&quot]Profile [/FONT][FONT=&quot]£500[/FONT][FONT=&quot]+3+35[/FONT]
[FONT=&quot]Base Rental P/M £[/FONT][FONT=&quot]305.67 ex.VAT[/FONT]
[FONT=&quot]Excess Mileage 9p per mile ex. VAT[/FONT]

I used contractcars.com but the finance is through MB themselves.

 

[markjay]

It seems that all the good deals out there are for Diesel cars, very few good deals for petrol C-Class (not talking about C63s...).

The effects of BIK are not straightforward, the overall picture is more involving, especially for the company owner:

With company car, you pay BIK. But you don't pay VAT on the car, and on some of the running costs (servicing etc), and you pay less VAT on fuel. In addition, if the company is profitable, there is also saving on CT which is around 20%-25%, assuming it's a lease that can be posted as OPEX.

With a privately owned vehicle, you pay everything from post-tax income, and you pay VAT on everything, but you can claim up to 45p per me tax-free for business travel.

I actually did the math some 20 years ago and at the time buying privately worked out at the better proposition, though things have obviously changed since.

 

[wemorgan]

AFAIK the company would also be subject to class 1A national insurance at the rate of 13.8%.

My accountant advised against leasing through the company based on my profile.

IMHO I prefer a 2 year lease to a 3 year lease, for a number of reasons.
1- I quickly get bored of cars
2 - 2 year leases can be cheaper or the same price as 3 year lease
3 - Only 1 service may be required on a 2 year lease
4 - tyres/brakes etc are unlikely to need replacing on a 2 year lease
5- wear and tear is accumulative, so less damage on a 2 year lease

 

[Red C220]

It seems that all the good deals out there are for Diesel cars, very few good deals for petrol C-Class (not talking about C63s...).

The effects of BIK are not straightforward, the overall picture is more involving, especially for the company owner:

With company car, you pay BIK. But you don't pay VAT on the car, and on some of the running costs (servicing etc), and you pay less VAT on fuel. In addition, if the company is profitable, there is also saving on CT which is around 20%-25%, assuming it's a lease that can be posted as OPEX.

With a privately owned vehicle, you pay everything from post-tax income, and you pay VAT on everything, but you can claim up to 45p per me tax-free for business travel.

I actually did the math some 20 years ago and at the time buying privately worked out at the better proposition, though things have obviously changed since.

You can only reclaim 50% of the vat on a private car that is taken home for personal use.

The only time you can reclaim 100% vat is with a Pool car and HMRC are very hot on checking the compliance of "pool cars".

All our cars are personal, despite every attempt at Man maths that was possible, it was still costing more to buy/lease a car through the Limited company I own.

 

[Primo]

IMHO I prefer a 2 year lease to a 3 year lease, for a number of reasons.
1- I quickly get bored of cars

Me too. I get a 2 year deal for myself and 3 year for staff.
contractcars.com (with whom I have no connection other than as a customer) can quickly provide quotes for different periods and annual mileages. Very helpful.

 

[Dryce]

All our cars are personal, despite every attempt at Man maths that was possible, it was still costing more to buy/lease a car through the Limited company I own.

Our directors looked at company car policy a while back and it made no sense.

If a car is needed for any business travel other than short journeys then the policy is just to rent. (That's when I get to drive MBs these days - typically a W204 or large Volvo for longer journeys).

 

[Rory]

If a car is needed for any business travel other than short journeys then the policy is just to rent. (That's when I get to drive MBs these days - typically a W204 or large Volvo for longer journeys).

May I ask who you rent from and what the typical daily rate is?

I work from home and wondered about renting for the odd trip down South but the cost of anything decent seemed immense and I really don't want to be stuck on the M25 in a manual.

 

[Dryce]

May I ask who you rent from and what the typical daily rate is?

Enterprise - and the price is usually £50 to £55. As a small company that goes through bursts of hires every few months depending on project locations we find that's enough to keep on friendly terms with the local branch. So things like second driver charges get waived. They know we return on time and that the car will only need a cursory tidy up. Usually a C-Class (over the last 18 months) though the odd Volvo or Passat. We go for smaller cars if the mileage is under about 175/day unless two or more people travelling.