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Leasing a car is a lot easier than most of us think. Check out these list of the key questions you should ask if you are looking to take up a lease deal.

Should I do this personally or through the business?

As a business user, depending on your circumstances, you may have the option of leasing your car through your business, or alternatively you may lease the car as a private individual. Private individuals and customers who are receiving a company car allowance usually have the option of  Personal Car Leasing/Contract hire.

What is the initial payment?

For business-users or businesses, a minimum of one rental in advance is possible (subject to credit approval), but typically an initial payment equivalent to 3 regular monthly rentals is required. Larger initial payments can be made if required, which will lower the regular monthly rentals.

How will my monthly payments be collected?

Monthly rentals are usually collected by Direct Debit.

Will my new lease car come with a warranty?

New Lease cars are supplied with full manufacturer’s warranty

Does my monthly lease rental include car insurance?

Contract Hire and Personal Contract Hire (PCH) lease contracts do not include car insurance; your new lease car must be covered by a fully comprehensive insurance policy for the duration of the contract, which is your responsibility to arrange.

Who will supply my new car?

All leasing companies have a network of franchised vehicle dealerships that they deal with or have a partnership with. The cars are supplied through these dealers.

Why do some prestige models cost less to finance per month than certain more common cars, which cost less to buy initially?

The monthly rentals payable are calculated considering many factors. These include the purchase price, the mileage agreed and the future predicted value of the vehicle (residual value). If the residual value of certain cars is far higher than other in its class, despite the fact that the purchase price maybe higher the monthly rentals may be lower.

Can I put a personal number plate on the car?

There will normally not be a problem. Be careful with contract hire and any agreements where the vehicle is registered in the name of the finance company. Make sure that you have their agreement and their confirmation that they will transfer the number back to you at the end of the agreement.

What happens if the car is accident damaged, to the point of being written off by the insurance company? Am I liable for any shortfall in value?

In most cases the insurance company will negotiate directly with the company you are setting up a lease though. Policies vary with different companies, it is advised you check out the policy when setting up the lease contract.

How can the car leasing companies afford to offer such low priced special offers? Surely most of these cars would depreciate more in value per month than the monthly rentals payable?

Due to the bulk purchases that the car leasing companies make large discounts are often given thus reducing the initial cost and therefore monthly rentals payable.

My circumstances have changed and I now need to amend the agreed mileage part way through a contract. Can I do this?

This is not usually a problem with most car leasing companies, as it will just mean that an alternative agreement will need to be made as regards the monthly payment to allow for an increase or decrease in mileage.

What if I exceed the agreed mileage on the contract?

This happens to a lot of people. Exceeding the agreed mileage on your contract usually leads to having to pay fee that is calculated based on the number of  extra miles and a charge per mile

What happens at the end of the lease contract?

When the lease contract ends, you can either arrange for the vehicle to be collected or extend your contract.

Hopefully this list will come in handy for anyone looking to lease a new car soon!

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Company Car vs Car Allowance

Years ago, a company car was seen as a massive incentive towards taking a new job. However, recently many employers have preferred to offer a car allowance which could prove more financially beneficial to both you and the firm. So when presented with the two options – a company car or a car allowance – which should you choose? This guide will examine the pros and cons of both.

Why choose a company car?

The company car system is long established in the UK. When you join a company, your new employer may offer you a company car as a perk – this means that you will drive a vehicle that the company owns.

Let’s look at the advantages of taking a company car:

• For the most part, the firm will cover the vast majority of your driving costs – many companies even offer a private fuel benefit.
• Repairs will usually be covered.
• You do not have to take out an expensive loan and pay high amounts of interest.
• Depreciation is no longer your concern. It’s well-known that the value of vehicles drop quickly from their original list price – even a car that holds its value well will lose around 50% of its worth within three years. As you don’t own the car you don’t have to worry about this loss of re-sale value. Most company car owners have car leasing agreements which allow them to return the car to the leasing company at the end of a contractual period (normally two-three years) and then take out leases on new vehicles. This means that the company car owners can avoid expensive maintenance costs as the car shows more wear and tear.

The main disadvantage to company cars is that car owners can now be heavily taxed based on the type of vehicle they drive, as the following section will explain.

What’s changed about the company car system?

Prior to April 2002, company car owners paid tax based on the number of business miles they drove each year. Now however, the system is calculated based on the quantity of carbon dioxide emissions from each vehicle – fewer emissions mean less tax.

As larger vehicles are typically used by firms to carry goods, they are subject to high taxation as traditionally larger vehicles pollute more.

How do you calculate your tax level?

To work out the level at which you will be taxed you must take into consideration a number of factors:

• Your highest rate of income tax – your tax rate is based on your earnings.
• The retail price of your car and additional extras worth more than £100. The upper tax limit for a vehicle and accessories is £80,000 – anything above that is for tax purposes priced at £80,000. If you have contributed your own cash to buying the company car, the list price should be reduced accordingly.
• The CO2 rate of the vehicle – this can be found in the car’s V5 document. A 15% charge applies to cars emitting less than 145g/km. This amount increases by 1% for every five grams/km thereafter – up a maximum of 35% for those with emissions in excess of 240g/km.
• Fuel type and rate – Though diesel cars generally give out lower levels of CO2 and are usually favoured by company car owners bear in mind that a diesel car with the same CO2 level as a petrol car will pay a higher level of tax than its petroleum equivalent because of higher toxic emissions. This is unless it meets the Euro IV emission standards introduced in 2005.
• Fuel benefits – If you are given free fuel by your employer, you will still face a tax charge and the employer could be liable for NI contributions.

To help reduce the tax level of your company car, the solution is to get a more environmentally friendly vehicle. Smaller cars and particularly hybrid cars and electric vehicles are featured in lower tax bands – with the most environmentally friendly cars facing no tax charges as well as being exempt from congestion charges. The Inland Revenue publishes a table listing the tax bands for vehicles – bear in mind these can change after each budget.

An alternative is to use an LPG converter on your vehicle to reduce emissions – of course this can only be carried out if your company owns the vehicle, and not if they are leasing a car.

What about a car allowance?

Many people now prefer a car cash allowance rather than a company car – this means driving your own vehicle and receiving a mileage based cash incentive from your employer. This is known as the Inland Revenue Authorised Mileage Rate (IRAMR).

The good news is that these allowances are tax-free. There are two rates based on the fact that some driving costs are variable (such as fuel) and others are fixed (insurance, tax, etc). The payments are 40p/mile for the first 10,000 miles and 25p/mile thereafter. There is no size restriction – these benefits apply whether you drive a small car or a van.

Which is right for you – a company car or a car allowance?

As with most aspects of driving this choice depends on your personal circumstances.

The key to calculating the most cost-effective route is to think about the monthly car allowance being offered to you. Once you have done this deduct any National Insurance contributions and tax, and add in the tax saving of not driving a company car.

Compare this to driving a company car and think about whether the money you have left will allow you to cover your remaining motoring costs including insurance, repairs, depreciation. Also factor in any fuel benefit offered on your company car.

The option that saves you the most money will usually be the preferred route for most. However, look beyond cash too and consider whether you want to have the security of owning your own vehicle or whether you prefer to drive a company car to avoid the expense of depreciation, etc.

It’s all about personal choice and which factors matter the most to you – hopefully you now feel well-equipped to make an informed choice.

Range Rover Evoque

The first customer-ready new generation Range Rover Evoque has rolled out of Land Rover’s Halewood manufacturing plant in Liverpool.

Should leasing companies adjust their residual values for a possible future VAT increase to 20%?

When a vehicle leasing company purchases a vehicle they can recover the VAT, which currently sits at 17.5%. At the back end however, they also have to account for VAT when they dispose of their vehicles, so what’s going to happen if VAT moves to 20% or more? Many contract hire companies may have a clause in their Master Hiring Agreement’s which allow them to recover the increased VAT, or reimburse VAT if the rate goes down. For a customer however it will be important to know if they contract hire their vehicles, what the leasing company policy on VAT may be, so that they are aware of potential charges in the future.

Alternatively, some leasing companies may feel the used vehicle market will adjust and may take no action on their residual values or some may adjust their residual values now, to anticipate a future move on VAT by the Government. Is there a definitive answer to this question from an expert out there?

Will cold weather tyres keep us moving this winter?

The first frosts of this winter experienced by many of us this month has perhaps done enough to remind us if the disruption caused by last winter’s snow.

Switching to cold weather tyres (merely calling them winter tyres doesn’t do justice to their breadth of ability) is high on the agenda of the tyre companies and fast-fit giants, even if it’s appearing much lower in the list of priorities of many fleet operators.

We’ve decided to run one of our long-term test cars on cold weather tyres to see how much of a difference it will make to safety and keeping the car running where if fitted with standard rubber, we might have considered avoiding travel by road.

The Ford Mondeo 2.0 TDCi Titanium X Sport is fitted with 235/45 R18 ContiSportContact tyres as standard. The cold weather tyres – selected by Michelin-owned ATS Euromaster – are Michelin Pilot Alpins, although Conti alternatives would have been available.

While we would heed advice against travelling in harsh conditions, we expect to see improvements in tyre performance on cold days, particularly in wet or slippery conditions.

Cold weather tyres have a more complex tread pattern than standard rubber, and are made with a different compound that allows improved contact with road surfaces when the temperature drops to seven degrees Celsius or below.

Braking distances are reduced while traction and grip levels are improved.

The flip side of this is that effectiveness is reduced at higher temperatures. For example, a car fitted with cold weather tyres would have a slightly longer stopping distance than standard rubber on a dry road at 20 degrees Celsius.

So timing is important, and advice suggests the change should be made in October, while the switch back is best done in late-March or early April.

While an extra set isn’t free of charge, the cold weather tyres simply become one of several sets of tyres a vehicle would use during its life on the fleet.

The actual cost of the tyres should be negligible. Where leasing companies offer the service as a bolt-on to a maintenance package the cost could be up to an extra £25 a month (although where the practice is more widespread, for example in Holland, it typically costs an extra €10 (£9) a month).

The cost is for storage and fitting the tyres twice a year.

Some of this may be offset against the cost of downtime through poor weather or reduced repair costs if the company’s insurance has a high excess.

Research by ING Car Lease in Holland has shown slightly fewer accidents involving cars using cold weather tyres, but also significantly lower repair bills in the accidents as a result of reduced impact speeds.

First impressions of the tyres fitted to the Mondeo are favourable: the car delivered power much more smoothly than normal when tackling roundabouts driving through a torrential downpour.

The car also felt much more stable when ploughing through water streaming across the road, when on the standard tyres there might have been a split-second loss of steering feel as the water temporarily comes between the tyre and the road.

It will be interesting to see how they perform in proper wintry conditions though. I will be comparing experiences with other staff to see if the Mondeo continues to work if their cars are grounded.

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Prices Announced For New 2012 Audi A4 Range

The newly refreshed compact executive range including Saloon, Avant, Allroad and S4 versions is available to order now priced from around £24,000. First UK deliveries will take place in March 2012.

BMW 3 Series in the UK

So to make this sixth-generation version even more successful BMW has concentrated its efforts on reducing emissions, with 24 versions emitting less than 120g/km of CO2. Compare this with just a handful of versions of the soon to be replaced Audi A4 and Mercedes C-Class and the forward step looks all the more impressive.

This is embodied by the 320d EfficientDynamics diesel model with emissions of 109g/km of CO2 and best-in-class fuel consumption of 68.9mpg. However, this version’s, low-drag aerodynamic body, stop and start and low-drain electronics are now fitted to every 3-Series in the range.

For the first time in the UK, there will also be a hybrid version. The Active Hybrid 3 will be an official sponsor car at the 2012 London Olympics, able to travel for up to 2.5 miles on electric power alone and will average around 44mpg, despite having more than 300bhp.

A four-wheel drive 3 Series also debuts in the UK, aimed to give drivers enhanced usability in tough weather and compete with the popularity of Audi’s quattro A4.

The six-cylinder petrol engine from previous 328i models has been replaced with a four-cylinder turbocharged motor with 245bhp. Despite being much smaller, it’s quicker than the outgoing model, hitting 62mph in 5.9 seconds and it’s much more economical, managing 44mpg and emissions of 149g/km of CO2. The outgoing 330i took 6.2 seconds to 62mph, averaged 38.7mpg and emitted 175g/km of CO2.

With a boot increased in size by 20 litres to 480 and with a wider loading area, the 3 Series should be easier to live with too. Thanks to a 93mm increase in length, there’s more room for people travelling in the back, with 15mm more rear knee room and 8mm more headroom.

BMW has also adopted a policy of testing all its new cars on our uniquely challenging British roads to ensure they handle to the desired level. In the past BMWs have received criticism for being too harsh over bumps, partly as a result of early run-flat tyre design.

The public will get its first chance to see the BMW 3 Series at the Detroit Motor Show from January 9, with first customers receiving cars in early February.

Land Rover Range Rover 4.4 TDV8 Autobiography Road Test

Test date 10 October 2010  Price as tested £81,395

The Range Rover celebrated its 40th birthday this year, nine of which have been clocked up by the current iteration. Much has changed since our original road test of it in 2002, and with the latest ‘2011 model year’ updates to the interior and powertrain, we thought it worth revisiting.

The big news is a new 4.4-litre V8 diesel engine, which replaces the 3.6-litre TDV8 and promises a 15 per cent increase in power and 19 per cent reduction in fuel consumption. This is mated to a ZF-sourced eight-speed torque converter automatic, which retains both low and high ratios.

Land Rover continues to improve the Range Rover’s already sumptuous cabin. In 2010 it gained hi-tech multi-function TFT dials (similar to those now used in the Jaguar XJ) and, mindful of the chauffeuring needs of emerging markets, Land Rover added reclining rear seats.

After 40 years, the biggest threat facing the Range Rover comes not from a rival car, but from social acceptance and environmental pressures. Does a new engine go far enough to keep it relevant?

Source Autocar

BMW 520d SE Touring review

Test date 01 October 2010  Price as tested £30,380