Fleet News

Contract hire survey: premium upper-medium diesels

PLENTY has been written about the new Jaguar X-type diesel, and apart from the odd dyed-in-the-wool traditionalist claiming the Coventry firm has sold its soul to the diesel devil, it has had a pretty good reception.

Jaguar desperately needs this car to succeed in the cut-throat premium upper-medium sector, and to do this it needs to sell to fleets.

We know it drives well, with its Ford Mondeo-derived engine among the smoothest and quietest on the market, but how will its figures stack up against the competition when it comes to contract hire rates?

It needs good running costs and strong residuals to get competitive rental rates. In other words, the X-type diesel will have to match, or better, heavyweights such as the BMW 320d, Audi A4 1.9 TDI and Mercedes-Benz C200 CDI.

The BMW 320d is widely recognised as the benchmark. Despite being an extremely popular car to the point of tip-toeing into the volume sector, it still manages to hold its own in residual value terms. It seems the second-hand buyer covets the car as much as the fleet driver. The ES model comes well-specced as well, with sports suspension and M Sports steering wheel on a long equipment list.

The Mercedes-Benz C200 CDI is the entry-level Merc in this sector, and while a fleet driver gets the kudos of the three-pointed star, it is not high on specification, with no standard CD player and small 15-inch wheels, although it offers a more comfortable ride than the BMW or the Audi, tuned as it is to cruising rather than rushing.

The similarly sparse Audi A4 provides stiff competition with a good, solid and well-proven engine.

It is coupled with a tidy, well-conceived exterior design, superb interior and excellent build quality. It is not the current Fleet News Award-winning car in this sector for nothing.

Saab's 9-3 is a credible alternative to the German three. It looks the part and retains the Swedish style that made the previous car a favourite of those company car drivers who like to do their motoring in something a little different to the mainstream.

However, there are doubts about the installation of the 2.2-litre diesel engine in this car, and it is certainly noisier and less refined than the other models here, and the interior quality is not quite up to the standard of the Jaguar or the German cars.

We have also included a Ford Mondeo in our selection. It is a cousin of the X-type diesel and shares the basic engine, albeit in a different state of tune.

The other cars are all at the bottom end of their respective ranges so are not high on specification, but Ford has given the Mondeo a spruce up with better materials and this top-of-the-range model has all the goodies.

True, a top-spec Mondeo will never be able to compete on residual terms, but in all other areas except its badge perception, it competes well.

The leasing company view

Andy Brown
Operations director, Inchcape Fleet Solutions
'The success of diesel-engined vehicles has been well documented over the past few years, and it could now be said the BMW 320d has taken over from the 318i as the benchmark car in this sector. While the pace of progress means ever quicker and more economical models, it also means increased obsolescence where old or lower-powered diesel versions become worth significantly less at disposal time.'

Andrew Cope
Managing director, Zenith Vehicle Contracts
'This group of cars shows the ever-increasing popularity and diversity of diesel. This month's group is geared to attract the core company car user where their vehicle is both a a business tool and a status symbol, eating up miles in the most comfortable, cost and tax efficient and stylish way. These six cars offer users a myriad of features and qualities, with the Ford Mondeo Ghia X performing well on all levels.

Tracy McMahon
Pricing manager, Lloyds TSB autolease
'Following changes in benefit-in-kind taxation, company car drivers are increasingly opting for diesel vehicles, which still perform better in tax terms despite the 3% surcharge for non-Euro IV compliant engines. The recently revised Ford Mondeo is ideal for those looking for a really well-equipped car but the other models here will better suit those looking for a more 'executive' brand.'

Richard Schooling
Commercial director, Alphabet
'The strength of the premium end of this sector is a testimony to the enduring appeal in the company car park of status cars. Drivers are spoilt for choice, thanks in large measure to the way the class leaders have kept raising the benchmark. Jaguar won't lack customers for the diesel X-type, and pricing it on par with the petrol version should prove to be good planning in terms of residual values.'

John Pout
Head of UK & international sales development, Arval PHH
'This sector has traditionally been led by the big three German badges (Audi, BMW and Mercedes-Benz) because they have always been so good at it. For me the most interesting contender has to be the Jaguar, coming in with its equally prestigious name and at a price that makes it a real draw. The competition is tough but I'd expect to see plenty of drivers ordering the Jaguar over the next six months.'

Vital statistics: how our models compare

Average monthly rental rates
BMW £394
Jaguar £397
Audi £421
Ford £438
Saab £439
Mercedes-Benz £439

  • Average based on results from our leasing panel

    Average maintenance costs (3years/60,000 miles)
    BMW £1,420
    Ford £1,642
    Audi £1,873
    Saab £2,040
    Mercedes-Benz £2,289
    Jaguar £2,347

  • Average based on results from our leasing panel

    RV forecasts (3years/60,000 miles)
    BMW £7,997/38%
    Jaguar £7,586/38%
    Mercedes-Benz £7,777/36%
    Audi £7,659/36%
    Saab £7,213/35%
    Ford £5,030/24%

  • Average based on results from our leasing panel

    CO2 emissions (g/km/tax band)
    Jaguar 149/18%
    Audi 151/18%
    BMW 153/18%
    Ford 154/18%
    Mercedes-Benz 170/21%
    Saab 177/22%

  • Source: Vehicle Certification Agency (2003/04 tax year)

    Combined mpg
    Audi 50.4
    Jaguar 50.3
    BMW 49.6
    Ford 48.7
    Mercedes-Benz 44.1
    Saab 42.8

  • Source: Vehicle Certification Agency

    Jaguar X-type 2.0D Classic


    Cope: 'This car is a credible and stylish alternative with the successful development of the Ford TDCi engine. It will be interesting to see how it competes.'
    McMahon: 'The Jaguar is the latest car to be launched to take advantage of growing interest in diesels after the changes in company car tax. The lower list price gives the Jaguar a favourable rental price.'
    Schooling: 'The X-type is likely to be more popular with fleets now it has the much-needed diesel. Not as taut as some of its rivals but many aspiring executives will think it worth the sacrifice.'
    Pout: 'At last Jaguar is taking on the Germans with a diesel and has done a great job with the Ford engine. This will be the one to watch over the next few months as it appears on choice lists. The price is highly competitive. Everyone will want to check this out.'
    Brown: 'A belated move for Jaguar into this critical sector. Not as quick as some, but the drive is quiet and smooth, surprisingly so in comparison to the Mondeo. Diesel suits the laid back nature of the X-type, making the 2.1 litre petrol model seem almost irrelevant.'

    Average monthly rental £397
    P11D price £19,815
    Average net price £16,975
    Average maintenance £2,348
    Average RV £7,586/38%

    Rental Rates
    Inchcape £400.58
    Zenith £413.89
    Alphabet £387.88
    Arval PHH £395.11
    Lloyds TSB autolease £389.39

    2003 CO2 BIK tax bill (22%/40%): £785/£1,427
    2003 VED bill: £115

    Audi A4 1.9 TDI 130 SE


    Schooling: 'The A4 is a solid, well-equipped package that epitomises the way Audi is marketing the quality feel of its cars, although it does not match some of its competitors for image or dynamics.'
    Pout: 'I've always thought of this as one for the ladies. It's the BMW alternative and not bad off the blocks for a diesel. Audi's attention to detail is apparent throughout.'
    Brown: 'Impeccable styling and finish both inside and out, but maybe not quite as striking two years down the line, due to the sheer success of the product. The PD engine is quick and frugal but not as quiet as some.'
    Cope: 'Audi has built a trustworthy, stable package, strengthening its position in the executive car park. The smooth performance of the well-established 1.9 TDI 130 engine propels this car along in an economical and stylish manner.'
    McMahon: 'The A4 exudes class with its neat design and good quality. The space upfront is good but not so for rear passengers. With firm suspension and a fantastic engine, it is excellent to drive and handling is good.

    Average monthly rental £421
    P11D price £21,070
    Average net price £18,232
    Average maintenance £1,873
    Average RV £7,659/36%

    Rental Rates
    Inchcape £450.11
    Zenith £428.52
    Alphabet £402.72
    Arval PHH £405.62
    Lloyds TSB autolease £418.00

    2003 CO2 BIK tax bill (22%/40%): £695/£1,264
    2003 VED bill £135

    BMW 320d ES


    Pout: 'BMW is now a volume as well as a premium provider but this car oozes class. Strong residuals and the aspirational quality of the badge mean this is a must on anyone's shortlist.
    Brown: 'The 320d, now more popular than the 318i, is soon to be Euro IV compliant, which will increase the tax advantage. Fiscal issues aside, the 320d is hard to resist, with a strong and accessible performance combined with a perfectly honed chassis.'
    Cope: 'Often the benchmark in this category. The performance and the overall quality finish is hard to beat. ES trim provides a good level of specification, which will help further to strengthen its position.'
    McMahon: 'The BMW continues to be the benchmark in its class. Ever popular, it has one of the most competitive rental rates in the range. Rates are boosted by the free servicing offer and strong residual values.'
    Schooling: 'BMW has raised the benchmark again, with 60,000 miles free servicing on all 3-series diesels. It makes the BMW not only the most desirable selection in many people's eyes but also the most affordable.'

    Average monthly rental £394
    P11D price £20,835
    Average net price £17,970
    Average maintenance £1,421
    Average RV £7,997/38%

    Rental Rates
    Inchcape £414.23
    Zenith £414.80
    Alphabet £369.93
    Arval PHH £385.85
    Lloyds TSB autolease £383.62

    2003 CO2 BIK tax bill (22%/40%): £825/£1,500
    2003 VED bill: £135

    Ford Mondeo 2.0 TDCi 130 Ghia X


    Brown: 'A great all-rounder, the Mondeo is one of the best family saloons available with recently improved trim quality, but sheer numbers work against it. The badge doesn't have the feel-good factor.'
    Cope: 'Ford's revamp of an already solid car gives it the potential to compete strongly. The engine completes the package, providing users with an economical, well-specified car. The only negative is the Mondeo's image.'
    McMahon: 'The best-equipped in this survey, offering leather as standard. Residuals are low compared to the others as drivers concerned about brands still opt for cars with a more 'executive' image.'
    Schooling: 'The diesel Ghia X is a fine car, with bags of goodies and a cracking engine. But it pays the price for lacking a premium image at resale time, with poor residual values and high rental rates.'
    Pout: 'A little flattering to compare among such company but the TDCi engine performs well and the Ghia X gives you plenty for your money. Its status as a volume car and the consequent pressure on residual value is what holds it back against this competition.'

    Average monthly rental £438
    P11D price £20,790
    Average net price £17,360
    Average maintenance £1,647
    Average RV £5106/24%

    Rental Rates
    Inchcape £444.82
    Zenith £425.72
    Alphabet £438.19
    Arval PHH £436.25
    Lloyds TSB autolease £437.75

    2003 CO2 BIK tax bill (22%/40%): £823/£1,497
    2003 VED bill: £135

    Mercedes-Benz C200 CDI Classic


    McMahon: 'The C-class is the most stylish car in this sector but is the least well equipped. Alloys don't come as standard and neither does a CD player.'
    Schooling: 'Mercedes knows the market for the C-class inside out and the South African-built right-hand drive model has all the qualities expected by the marque's UK customers.'
    Pout: 'Retains the big car feel in usual conservative Merc style but the traditional aspect may put off those looking for something a bit more exciting. Specification is OK considering this is Mercedes' entry-level option.'
    Brown: 'On the face of it the most prestige model in this comparison, with good ergonomics and a driving position that makes long distance journeys a breeze, but the standard specification is sparse and residual values will tend to reflect this.'
    Cope: 'The C200 gives the impression of elegance and refined motoring, although this illusion is spoilt by the performance of the diesel engine. The interior styling of the Mercedes creates a calm and pleasurable driving experience, but interior quality has been criticised.'

    Average monthly rental £439
    P11D price £21,310
    Average net price £18,677
    Average maintenance £2,289
    Average RV £7,777/36%

    Rental Rates
    Inchcape £476.39
    Zenith £455.67
    Alphabet £423.30
    Arval PHH £424.50
    Lloyds TSB autolease £415.97
    2003 CO2 BIK tax bill (22%/40%): £1,031/£1,874
    2003 VED bill: £155

    Saab 9-3 2.2 TiD Arc


    Schooling: 'The 9-3 diesel needs lower CO2 emissions to tempt drivers away from petrol versions. Otherwise, its offers good looks and high equipment levels in a package whose dynamics have been described as second only to the BMW.'
    Pout: 'Much improved over the old model in ride and handling. It's a less quirky proposition than it used to be although the engine is still noisy. The problem is the CO2 rating.'
    Brown: 'Not quite as quirky as previous generations, but the 9-3 still retains enough Saab DNA to provide an antidote to the German establishment. The diesel is not the best choice in the range but more advanced units are in the pipeline.'
    Cope: 'Saab's new styling promises much on first impressions, but this is not carried through when driven. The 2.2 engine from GM fails to perform, producing poor performance and quality.'
    McMahon: 'The Saab 9-3 looks more conventional than its predecessor. It is a well-equipped car and like the Mondeo, leather comes as standard. However it has the highest CO2 rating and is the slowest at 0-60mph.'

    Average monthly rental £439.34
    P11D price £20,815
    Average net price £19,105
    Average maintenance £2,040
    Average RV £7,213/35%

    Rental Rates
    Inchcape £454.44
    Zenith £441.05
    Alphabet £435.75
    Arval PHH £433.38
    Lloyds TSB autolease £432.08

    2003 CO2 BIK tax bill (22%/40%): £1,071/£1,947
    2003 VED bill: £155

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