Fleet News

Contract hire survey: coupes

YOUNG executives who can choose what cars they drive are manna from heaven for car manufacturers.

They are the sort of people the marketing director dreams of – young, successful, moneyed, with nice hair, lovely teeth and great, funny friends, who reflect well on the brand.

And the manufacturers would like to think they all drive coupes: there's no need for a second set of doors, because families and all those other wearisome practical distractions and responsibilities that require more doors and storage space are a long way off.

So, for such a band of user choosers, coupes are king and we have chosen six of the best premium models to appeal to our demographic heroes and heroines.

It's a sector that has a blend of new and old, established players and ambitious upcomers, and contract hire is a key area for such cars, as it is the principle way user choosers fund their cars.

On the established side are the three cars from the German giants: the BMW 3-series Coupe, the Mercedes-Benz Sport Coupe and Audi TT.

The 3-series is the car that is the most fleet-orientated, and there have been thousands sold or contract-hired in the past few years to companies, and it shows no signs of abating. It's interesting to see whether the huge numbers sold to fleets will have an effect on the residual values the contract hire firms predict.

The Mercedes-Benz Sport Coupe, based on the C-class, is probably the most conservative drive of the cars here and the Sport in the title should probably be replaced with Sensible, but like most Mercs, it should hit the spot when it comes to strong residuals and attractiveness to traditional Mercedes-Benz drivers.

The third of these three is the TT, which is one of those cars that executives seem to swarm to, but like the 3-series Coupe, it has been around a while and has sold fantastically well. Nearly 10,000 were sold last year alone. Will the bubble finally burst?

Because, where once the TT had the market for sporting compact coupes virtually to itself, there are some new models in the sector.

The Alfa Romeo GT is the newest here, and continues Alfa's run of form in producing gorgeous-looking cars. The question remains though: will it continue Alfa's run of form in producing cars with high running costs, dubious reliability and heavy depreciation?

The Mazda RX-8 is one of those cars that struggles to be pigeonholed as it has four doors, four seats (although the back two are not quite as practical as you might be led to believe), and an unusual engine in the Renesis rotary unit. So it's a coupe that could almost be a saloon, but isn't quite. All very confusing. But an element in its favour is that Mazda is as keen as mustard on fleet business, so will it come with generous rates?

Last, but by no means least, is the Nissan 350Z. This is the least practical, is likely to prove the most expensive, only has two seats and can be a bit awkward to drive. But it is fantastic, looks a billion yen, and for a driver wanting thrills and an engine note of a racing thoroughbred, is hard to beat until you get to Porsche 911 money.

Andy Brown
Operations director, Inchcape Fleet Solutions
'The range of coupes on offer is becoming more diverse in style and concept as the manufacturers produce more high-image models to stimulate interest and demand. The more restrained approach of the Mercedes and BMW may have a more enduring appeal, but it is hard to deny the appeal of the likes of the Mazda and the Nissan.'

Andrew Cope
Managing director, Zenith Vehicle Contracts
'This is an exciting sector, which is expanding quickly. It offers drivers new and dynamic alternatives to the standard Audi TT and 3-series coupes. Despite this, drivers and companies need to be aware of the associated costs, both in terms of tax, fuel but, most importantly, corporate responsibility. Are your drivers trained to drive these cars safely?'

Tracy McMahon
Pricing manager, Lloyds TSB autolease
'New entrants the Mazda RX-8, Nissan 350Z and Alfa GT bring originality and excitement to the coupe sector. The Nissan 350Z has a great engine and stunning good looks. If I were to choose a coupe it would be my old favourite the Audi TT, but the introduction of the RX-8, with its practicality and originality, could prove to be fierce competition.'

Richard Schooling
Commercial director, Alphabet
'This is a niche where fleet operators can offer their drivers style, quality and dynamics without losing sight of shareholder value, especially now that fuel costs and interest rates are on the rise. The BMW unquestionably sets the standard for mixing driver appeal with solid business sense, as its domination of fleet sales shows.

John Pout
Head of UK & international sales development, Arval PHH
'Like last month's selection of cabriolets, coupes are often the first model types to get a line through them when the car choice list is being reviewed. PCP and ECOS schemes may well bring them into greater currency, but in most cases it's hard to take more than one customer out in them and be sure they will enjoy the ride. When practicality rules over style the coupe gets ruled out.'

Vital statistics: how our models compare

Average rental rates

BMW 318Ci £447
Mazda RX-8 £460
Alfa Romeo GT £474
Mercedes Sport Coupe £484
Audi TT £486
Nissan 350Z £509

  • Average based on results from our leasing panel

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

    BMW 318Ci £1,925
    Alfa Romeo GT £2,338
    Mazda RX-8 £2,452
    Audi TT £2,454
    Mercedes Sport Coupe £2,508
    Nissan 350Z £3,049

  • Average based on results from our leasing panel

    RV forecasts (3years/60,000 miles)

    Nissan 350Z £10,031/42%
    Mazda RX-8 £8,907/41%
    BMW 318Ci £8,911/39%
    Mercedes Sport Coupe £8,967/38%
    Audi TT £9,112/36%
    Alfa Romeo GT £6,469/30%

  • Average based on results from our leasing panel

    CO2 emissions (g/km/tax band)

    BMW 318Ci 180/22%
    Mercedes Sport Coupe 207/27%
    Alfa Romeo GT 207/27%
    Audi TT 228/31%
    Nissan 350 Z 273/35%
    Mazda RX-8 284/35%

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

    Combined mpg

    BMW 318Ci 38.2
    Mercedes Sport Coupe 32.8
    Alfa Romeo GT 32.5
    Audi TT 29.7
    Mazda RX-8 25.2
    Nissan 350 Z 24.8

  • Source: Vehicle Certification Agency

    Audi TT 1.8 quattro 180

    Pout: It is a shame that there are so many on the road these days – but then who can argue with popular choice when it's based on brilliant design, fabulous looks, a hairy-chested engine and genuine comfort. Superb residual values mean that the rentals look good too!
    Schooling: The Hungary-built TT has a devoted following, but the high price and restricted two-seat capacity may help explain why only one in five goes to a fleet.
    McMahon: The Audi TT may seem like a veteran in the coupe sector, but it still manages to hold its own against new models. This is reflected in the strong residual values, ensuring rentals remain competitive even though the cost new is higher.
    Brown: The TT is a familiar sight after five years on the market, thanks to a combination of striking looks, show-car interior and a hassle-free ownership experience.
    Cope: This is very much still the car to be seen in but its appeal may wane in a couple of years' time as over-saturation of the marketplace results from its popularity.

    Average monthly rental £486
    P11D price £25,127
    Average net price £21,717
    Average maintenance £2,454
    Average RV £9,112/36%

    Rental Rates

    Inchcape £471.53
    Zenith £501.71
    Alphabet £521.29
    Arval PHH £472.41
    Lloyds TSB autolease £461.00

    2004 CO2 BIK tax bill (22%/40%): £1,714/£3,116
    2004 VED bill: £160

    Alfa Romeo GT 2.0 JTS


    Pout: The Alfa suffers from a reliability reputation, which it probably doesn't deserve so much today. Although priced competitively, natural conservatism over residual values pulls the rental right up – to all but neutralise the on-the-road price position. Well-equipped, throaty and sporty, but if you're tall, bag the front seat.
    Cope: Performance is outstanding in terms of power, speed and handling. Unfortunately, it could be affected by Alfa's poor reliability issues and after-sales (RV) performance.
    McMahon: The GT Coupe has the stunning looks you would expect from an Alfa Romeo and is surprisingly spacious. Rentals are high due to low RVs and maintenance costs high because of unreliability associated with Alfas.
    Schooling: It is surprisingly roomy as well as good-looking. Unfortunately, the Alfa Romeo's rapid depreciation undermines its fleet credentials.
    Brown: Combines gorgeous looks with decent accommodation and useful hatchback layout. The rev-happy engine adds further to the appeal but we are not convinced by the dealers or the long-term durability. Average monthly rental £474
    P11D price £21,297
    Average net price £17,945
    Average maintenance £2,338
    Average RV £6,469/30%

    Rental Rates

    Inchcape £491.64
    Zenith £470.82
    Alphabet £461.64
    Arval PHH £467.66
    Lloyds TSB autolease £480.00

    2004 CO2 BIK tax bill (22%/40%) £1,265/£2,300
    2004 VED bill £160

    BMW 318Ci SE


    Cope: This is probably the most popular choice of all the cars in this basket as it provides the most cost-effective option. With the launch of the latest version next year, this popularity will most likely continue, if not increase.
    Pout: This really gives the TT a run for its money and in my view it's the only alternative in this genre. BMW's typically Teutonic quality, robustness and attention to detail delivers a smooth and generally noiseless ride. The rental is highly competitive.
    Brown: The 318 is tasteful and well-engineered but in this group can look a bit conservative. For some, though, it is still the default choice based on image and reputation.
    McMahon: Competitive maintenance budgets and strong residuals mean the rentals are lowest on the BMW Coupe. Low CO2 emissions ensure this would be the most preferred coupe to keep your BIK low.
    Schooling: The hallmark of brilliance is an ability to make the difficult seem easy. The 3-series Coupe is as fashionable and rewarding as ever while making an equally compelling financial case for itself.

    Average monthly rental £447
    P11D price £22,992
    Average net price £19,783
    Average maintenance £1,925
    Average RV £8,911/39%

    Rental rates

    Inchcape £459.08
    Zenith £468.51
    Alphabet £416.57
    Arval PHH £454.68
    Lloyds TSB autolease £436.00

    2004 CO2 BIK tax bill (22%/40%): £1,113/£2,023
    2004 VED bill: £145

    Mazda RX-8 231


    Brown: The RX-8 is one of the most striking cars on the market. Unique in looks, sound and layout but also more practical than it appears. High fuel consumption is the only downside.
    Pout: With an enduring reputation for reliability and excellent construction, the Mazda is a highly competitive player in this sector. The unusual rotary engine gives it a distinctive sound and equally good performance. Generous standard equipment adds to the value for money – and with a nine-speaker sound system it's a rapper's delight.
    Cope: Mazda has made a real attempt to upset the balance with this car's very different approach to styling and construction. It offers great driving performance, but is let down by poor economy and high emissions.
    McMahon: The Mazda RX-8 is like no other car on the road. It is one of the quickest and the absence of a central pillar ensures easy access to the back seats in contrast to its rivals. The only downside is its heavier fuel consumption.
    Schooling: Its thirst and high CO2 may make some drivers think twice but the competitive price could soften the BIK blow. The well-received RX-8 also promises to hold its value.

    Average monthly rental £460
    P11D price £21,902
    Average net price £19,147
    Average maintenance £2,452
    Average RV £8,907/41%

    Rental rates

    Inchcape £461.53
    Zenith £477.38
    Alphabet £436.93
    Arval PHH £472.29
    Lloyds TSB autolease £453.00

    2004 CO2 BIK tax bill (22%/40%): £1,687/£3,066
    2004 VED bill: £160

    Mercedes-Benz Sport Coupe C200K Evo Panorama SE

    McMahon: Although the C200K may not be the sportiest looking coupe in the sector, it does benefit from strong residuals. Unfortunately, this is outweighed by expensive running costs and heavy fuel consumption. High CO2 emissions are reflected in the BIK level.
    Brown: The Sport Coupe is expensive and not as quick as the competition, but it has a strong image and this, combined with the Mercedes-Benz name, means good residuals and hence a strong case for the business user.
    Schooling: A sound business choice. In a sports context, though, the coupe may err a little too far towards the restrained conservatism that is intrinsic to this marque's appeal.
    Pout: It looks more sedate than its rivals and drives in similar fashion. Still, it is highly reliable, durable, looks pretty good and at the end of the day it's a Merc. More spacious than its rivals, this is the safe if unexciting choice.
    Cope: Again, Mercedes has developed a stable and well-balanced car but its subtle styling does not provide younger drivers with the exciting image of some of the other cars here.

    Average monthly rental £484
    P11D price £23,472
    Average net price £19,944
    Average maintenance £2,508
    Average RV £8,967/38%

    Rental rates

    Inchcape £494.62
    Zenith £494.12
    Alphabet £466.77
    Arval PHH £485.46
    Lloyds TSB autolease £477.00

    2004 CO2 BIK tax bill (22%/40%): £1,394/£2,534
    2004 VED bill: £160

    Nissan 350Z


    Schooling: Its good looks and muscular engine stand out – but so do its running costs, due to short service intervals and the cost of the different-size front and rear tyres.
    McMahon: The Nissan 350Z benefits from great looks and a 3.5 V6 engine and comes with generous standard equipment. Although residual values are strong, high maintenance budgets and an average fuel consumption of 24.8mpg contribute to high running costs.
    Cope: This is a very butch car, which is well priced. The overall package is slightly let down by the quality of the interior. Drivers need to select the right colour for resale purposes.
    Brown: The back-to-basics package of muscular looks, big power and well-sorted chassis has an undeniable appeal and the 350Z has sold out in the UK.
    Pout: If you like red meat you'll probably enjoy this. A 3.5-litre engine delivers plenty of growl but just as much CO2. I don't think we'll see too many of these in the company car park. SMR and RV costs push the rentals high against its peer group.

    Average monthly rental £509
    P11D price £23,802
    Average net price £21,107
    Average maintenance £3,049
    Average RV £10,031/42%

    Rental rates

    Inchcape £486.19
    Zenith £501.88
    Alphabet £514.74
    Arval PHH £514.27
    Lloyds TSB autolease £529.00

    2004 CO2 BIK tax bill (22%/40%): £1,833/£3,332
    2004 VED bill: £160

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