Fleet News

Contract hire survey: budget cars

THE vast majority of fleets inhabit the middle ground when it comes to cars. It's not the heartland of Ferrari, Porsche or Bentley, and nor is the supercar's polar opposite a key area.

The budget supermini sector doesn't really get much of a look in as far as company cars go because it is not ideal for long-distance work, doesn't keep too many employees happy from an HR point of view, vehicles are generally not as safe as bigger cars in a crash and are obviously less spacious.

That doesn't mean it is worth dismissing them out of hand immediately. For a start, the running costs for these cars can be attractive and there is not as much cash outlay if they are outright purchased.

For firms which need cheap, affordable transport as a pool car or for junior staff, these cars could do the job without busting the budget. They will also do a job for rental firms and for some Motability customers.

New to the sector, and getting more attention than all of the others got at launch put together, is the CityRover. Based on the Tata Indica, Rover is claiming it is the new Metro, although there are plenty of sceptics about reckoning it could be the company's last throw of the dice.

The Daihatsu Cuore, replaced by the Charade but still around in small numbers if you look hard, wouldn't make it on to too many fleet lists, but it is the cheapest Japanese car available in the UK, so it's at the budget end of the budget market. What that means though is boxy styling, lacklustre performance and a flimsy interior.

The Kia Rio, unlike the Cuore, seems to have had some styling work done on it and has a 1.3-litre engine. Kia sells the car on having more space than the average budget runabout, and it has been Kia's top-selling export vehicle for a number of years.

The Hyundai Getz is one of the most complete vehicles here and could step up as competition to the likes of the Ford Fiesta, Peugeot 206 or Renault Clio.

With its five-year unlimited mileage warranty, decent build quality and sprightly handling, it should prove a worthy contender as a useful runabout.

The Vauxhall Corsa is a fleet favourite, particularly in the rental sector. And rightly so. At more expensive levels, it might struggle against the likes of the Fiesta and Clio, but at this price point it is a very cheap, good value-for-money car.

Finally, we have included the Daewoo Matiz – another value car from the Far East. Under the guidance of General Motors, Daewoo should start to find its way on to more fleets.

Like all the cars here, there has to be consideration of its shortcomings within the context of its very cheap price.

Andy Brown
Operations director, Inchcape Fleet Solutions
'With budget models the best advice is to go for the cheapest car possible. As soon as you get into value-added specified-up models, all the savings are gone and the value will not be reflected in the resale price at disposal time. There is a place for all these budget models in the market place but fleets need to consider the support network offered by the manufacturer in terms of dealer network and servicing.'

Andrew Cope
Managing director, Zenith Vehicle Contracts
'This is an unusual sector to comment on in the company car arena as these types of cars tend to appeal to the retail sector more. These types of vehicles do not form a large part of the company car parc, but with the ever-increasing trends of low CO2-based legislation and control measures for congestion, we may start to see certain city commuters and companies opting for smaller, more CO2 efficient vehicles.'

Tracy McMahon
Pricing manager, Lloyds TSB autolease
'This month's contract hire survey considers budget small cars. Most of these vehicles will be chosen because of cost and not necessarily style. My favourite of this selection is definitely the Vauxhall Corsa, which offers cheap monthly rentals but also quality and flair in its design. I think the new offering from Rover, the CityRover may also be a popular choice among fleets looking for a budget car alternative.'

Richard Schooling
Commercial director, Alphabet
'Manufacturers put a lot of effort into promoting their small cars as cute bundles of fun but fleet buyers have little room for sentiment in this strongly price-conscious sector. Fleets need to look at the safety aspects of fitness-for-purpose, and one or two of these cars are definitely best suited to about-town use. Even so, you can now give junior drivers a versatile car for a benefit-in-kind tax bill of less than £5 per week.'

John Pout
Head of UK & international sales development, Arval PHH
'It's a difficult selection this month. The aim of the game is to understand the needs of your buyer and in this sector it's cheap to buy, cheap to run and practical to drive. The choices are difficult – they all tick the box for economy and all have strengths and weaknesses in different areas. Among these the Corsa has to be favourite as it manages to achieve the three criteria above while at the same time being fun to drive.'

Vital statistics: how our models compare

Average monthly rental rates

Vauxhall £168.16
Daewoo £170.40
Rover £180.29
Hyundai £180.66
Daihatsu £181.08
Kia £187.09

  • Average based on results from our leasing panel

    Average maintenance costs (3years/60,000 miles )

    Daewoo £939
    Vauxhall £958
    Rover £1,299
    Hyundai £1,302
    Daihatsu £1,351
    Kia £1,448

  • Average based on results from our leasing panel

    RV forecasts (3years/60,000 miles )

    Vauxhall £2,300/34%
    Rover £1,937/31%
    Hyundai £1,923/28%
    Daewoo £1,729/27%
    Kia £1,448/25%
    Daihatsu 1,328/23%

  • Average based on results from our leasing panel

    CO2 emissions (g/km/tax band)

    Daihatsu 124/15%
    Vauxhall 131/15%
    Hyundai 138/15%
    Kia 157/17%
    Daewoo 158/17%
    Rover 167/19%

  • Source: Vehicle Certification Agency (2004/05 tax year)

    Combined mpg

    Daihatsu 55.4
    Vauxhall 51.4
    Hyundai 48.7
    Daewoo 44.1
    Kia 42.8
    Rover 37.9

  • Source: Vehicle Certification Agency

    Daewoo Matiz 0.8 SE


    Brown: 'With the backing of GM, Daewoo is rapidly building a credible infrastructure in the UK. The Matiz has limited appeal as it was only really intended as an urban vehicle.'
    McMahon: 'The Matiz has the lowest rentals because of the three years free servicing. However, it lacks cabin quality – the materials are cheap and the rear seat space is tight.'
    Schooling: 'Keen pricing and smart marketing have ensured the Matiz's popularity with private buyers. The 1.0-litre version would be better for fleet users rather than subjecting this one's 800cc unit to endless thrashing.'
    Pout: 'This is another car that qualifies for the curate's egg award – yes, it's good in parts. It's economical to run, has the benefit of five doors and it's a neat little mover and parker for the city dweller. Add to that a really tight turning circle and it adds up to a practical proposition. On the motorway it will take you to 70mph and stay there quite happily – eventually – but this is a car for the metropolis.'
    Cope: 'Once again Daewoo has delivered a good all-round package for the private motorist. The success of this car in the company car market is very limited due to its restricted appeal.'

    Average monthly rental £170.40
    P11D price £6,445
    Average net price £5,635
    Average maintenance £939
    Average RV £1,729/27%

    Rental Rates

    Inchcape £153.40
    Zenith £173.95
    Alphabet £177.53
    Arval PHH £180.12
    Lloyds TSB autolease £167.00

    2004 CO2 BIK tax bill (22%/40%) £241/£438
    2004 VED bill £125

    Daihatsu Cuore 1.0E 3dr


    Schooling: 'The Cuore was clearly targeted at budget-conscious buyers and its used values reflect its cheapness more than its cheerfulness. It is extremely frugal but consequently rather underpowered for long trips.'
    Pout: 'Without my glasses I could mistake this for a Mini – but that's the only way I can make that mistake. It has the common Japanese characteristics of driving economy but at the end of the day this is just another in the long production line of small pretenders. Cuore is Italian for heart and I would love to praise it, but I just haven't the heart to get excited about it.'
    McMahon: 'The Cuore has one of the highest rentals caused by a high maintenance budget. It is not the most modern-looking car here, making it unlikely to appeal to younger drivers. It is the most economical here.'
    Brown: 'The Daihatsu is highly reliable but this brand has very little presence in the fleet market.'
    Cope: 'Its shoebox looks and poor design make this car one of the least attractive of the group. It is difficult to provide a glowing references for such an uninspiring vehicle.'

    Average monthly rental £181.08
    P11D price £5,870
    Average net price £5,301
    Average maintenance £1,351
    Average RV £1,328/23%

    Rental Rates

    Inchcape £167.97
    Zenith £181.66
    Alphabet £194.70
    Arval PHH N/A
    Lloyds TSB autolease £180.00

    2004 CO2 BIK tax bill (22%/40%) £194/£352
    2004 VED bill £105

    Hyundai Getz 1.1 GSi 3dr


    McMahon: 'The Getz is a smart-looking car that would appeal to different age ranges. The rear seats fold down to create a flat floor, which is useful. It is the price and equipment levels that boost the appeal of this car.'
    Cope: 'The looks of this car are backed up by good drive quality and a fantastic warranty package, unfortunately these positive attributes are let down by an average interior specification and design.'
    Schooling: 'A strong contender with a good balance of performance and fuel economy. Safety is good too, with ABS and side airbags. Tall cabin feels roomy and five-year warranty protects residual values.'
    Brown: 'One of the better-looking cars in the sector with the best warranty in the UK. The Coupe model has helped Hyundai's appeal in the market and the Getz is worthy of serious consideration.'
    Pout: 'This car, as well as being fun to drive, offers good headroom for a car in this sector and generally gives a surprising sense of space. The five-year warranty deal is a persuasive offer for the consumer.'

    Average monthly rental £180.66
    P11D price £6,865
    Average net price £5,656
    Average maintenance £1,302
    Average RV £1,923/28%

    Rental Rates

    Inchcape £175.38
    Zenith £196.71
    Alphabet £179.97
    Arval PHH £169.22
    Lloyds TSB autolease £182.00

    2004 CO2 BIK tax bill (22%/40%) £227/£412
    2004 VED bill £105

    Kia Rio 1.3 5dr


    Cope: 'Although this car is cheap upfront, its depreciation is dreadful, making it an expensive budget vehicle. This potentially high lease cost is not helped by the average performance and looks.'
    Pout: 'The Rio is more contemporary in style than many of its competitors. In its external appearance and neat internal features, this has more of a big car feel than its dimensions would suggest. This model is high on the price side, reflecting the fact that it is a cross-over into the larger vehicle sector.'
    Brown: 'Lots of space for the price but to a number of people a used Focus may be more attractive. As a fleet car this will struggle to have an impact.'
    Schooling: 'The Rio benefited from an all-over revision last year and, although not targeted at fleet buyers, it is a thoroughly competent but not especially stylish car for anyone on a budget.'
    McMahon: 'The Kia Rio offers a CD player as standard and competitive rentals. The interior space is excellent and the interior is sturdy without the cheap feel of some of its competitors. Practicality beats its flair.'

    Average monthly rental £187.09
    P11D price £5,845
    Average net price £5,069
    Average maintenance £1,448
    Average RV £1,448/25%

    Rental Rates

    Inchcape £162.80
    Zenith £186.83
    Alphabet £188.16
    Arval PHH £223.66
    Lloyds TSB autolease £174.00

    2004 CO2 BIK tax bill (22%/40%): £219/£397
    2004 VED bill: £125

    Rover CityRover 1.4 Solo 5dr


    Pout: 'For the small car driver who is unconcerned with sex appeal, this will tick the box. OK, so imagination took a day off when the internal features were being designed, but nevertheless it has its good points. It is spacious, four grown-ups can go for a ride without fear of DVT, a neat turning circle and sound, if not spectacular, engineering.'
    McMahon: 'The CityRover is a new entry to the market and Rover's first city car for five years. The new car is closely based on the Tata Indica, an Indian-built supermini.'
    Brown: 'The CityRover offers good accommodation and performance for the money and no doubt will create valuable showroom traffic and revenue for MG Rover.' Cope: 'This new offering from Rover has the backing of a decent badge image unlike many of the others in this group. However the base models seem to be underpowered. Only time will tell if this new car is to be a success.'
    Schooling: 'Rover's crucial re-entry model has its plus-points for fleet buyers, especially the 85bhp engine and generous interior space. However, you have to pay £2,000 more for the Style variant to get ABS or a passenger airbag.'

    Average monthly rental £180.29
    P11D price £6,325
    Average net price £5,564
    Average maintenance £1,299
    Average RV £1,937/31%

    Rental Rates

    Inchcape £176.40
    Zenith £178.64
    Alphabet £195.11
    Arval PHH N/A
    Lloyds TSB autolease £171.00

    2004 CO2 BIK tax bill (22%/40%) £264/£481
    2004 VED bill £145

    Vauxhall Corsa 1.0i Expression 3dr


    Cope: 'The Corsa and the Getz are the two most attractive vehicles in the group. The Corsa has found a sector which it can compete at the upper end, now it seems to be struggling against the likes of the Ford Fiesta and Honda Jazz.'
    McMahon: 'The Corsa has low rentals caused by low maintenance budgets and strong residual values. It is a nice looking car and definitely appeals to all age ranges. The interior has a quality feel and looks modern.'
    Schooling: 'It may lack a little sparkle compared to some rivals but the Corsa still sets the standard for all-round ability and competitive wholelife costs. This new version is bigger, with more safety features and a good Euro NCAP crash rating.'
    Brown: 'The Corsa is a competent car that combines mass appeal with up-to-date styling. Interior ergonomics are good and the refinement and safety features are what you would expect from Vauxhall.'
    Pout: 'An excellent car for the urban dweller. Smooth, nippy and confident about town, it also offers the reliability and build quality that you expect from the badge. The only downside for me is the relative lack of space in the back.'

    Average monthly rental £168.16
    P11D price £6,865
    Average net price £5,852
    Average maintenance £958
    Average RV £2,300/34%

    Rental Rates

    Inchcape £177.49
    Zenith £142.00
    Alphabet £176.75
    Arval PHH £174.57
    Lloyds TSB autolease £170.00

    2004 CO2 BIK tax bill (22%/40%) £227/£412
    2004 VED bill £105

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