Fleet News

Contract hire survey: luxury diesels

THE Mercedes-Benz S-class is synonymous with the executive car park, used by countless company bosses to reinforce their image of power and the fact that ‘they’ve made it’.

Perhaps surprisingly, it’s not the biggest seller in the sector, though; that honour falls to Jaguar’s XJ range, but in terms of presence and image it’s right up there.

And now there’s an all-new model, crammed full of technical advances such as Night View Assist, which uses infra-red technology to boost a driver’s vision in the dark by projecting the view ahead into a screen on the dashboard, and adaptive cruise control which locks on to the car in front and judges speed accordingly. It’s all clever stuff, packaged in a bigger model with striking styling.

However, there’s one familiar part of the package, and that’s the 3.0-litre V6 turbodiesel, bringing real-world economy and emissions to this luxury product.

But competition in this sector is fierce, with Audi’s elegant A8, the recently revised BMW 730d, Jaguar’s XJ TDVi, the new look Range Rover TD6 and, in terms of size if not stature, Volkswagen’s luxurious Phaeton, here in more expensive four-seat guise to bring it up to price parity.

Audi A8 3.0 TDI quattro Sport

P11D price £51,117
2006 CO2 BIK tax bill (40%) £7,156
2006 VED bill £170
Rental Rates
Lombard £806
Masterlease £897
Custom Fleet £862
Arval £956
Alphabet £904

BMW 730d SE

P11D price £50,642
2006 CO2 BIK tax bill (40%) £6,684
2006 VED bill £170
Rental Rates
Lombard £847
Masterlease £927
Custom Fleet £893
Arval £938
Alphabet £785

Jaguar XJ 2.7 TDVi Sport Premium

P11D price £49,787
2006 CO2 BIK tax bill (40%) £6,373
2006 VED bill £170
Rental Rates
Lombard £777
Masterlease £926
Custom Fleet £889
Arval £889
Alphabet £853

Mercedes-Benz S320 CDI

P11D price £54,767
2006 CO2 BIK tax bill (40%) £7,448
2006 VED bill £170
Rental Rates
Lombard £962
Masterlease £1,083
Custom Fleet £976
Arval £1,130
Alphabet £976

Range Rover 3.0 TD6 HSE

P11D price £49,292
2006 CO2 BIK tax bill (40%) £6,900
2006 VED bill £170
Rental Rates
Lombard £810
Masterlease £906
Custom Fleet £866
Arval £895
Alphabet £836

Volkswagen Phaeton 3.0 V6 TDI 4Motion 4-seat

P11D price £47,472
2006 CO2 BIK tax bill (40%) £6,646
2006 VED bill £170
Rental Rates
Lombard £759
Masterlease £854
Custom Fleet £812
Arval £686
Alphabet £785

Commercial director, Alphabet (GB)

SUCCESS here depends on creating cutting-edge product quality and brand image.

Here, BMW leads the way, epitomising luxury performance and, with the Service Inclusive pack, makes unarguable financial commonsense, too.

Sales-wise, the imposing S-class has some ground to recover but Mercedes-Benz is responding to the need to get back on terms by redressing the image/quality balance.

Luxury cars now face increasing competition from high-end 4x4s. Careful mid-life revisions to the Range Rover brought its sales close to those of the leading saloons last year.

With its quality feel and under-stated drive, the Audi delivers coolly technical luxury, while the Jaguar engenders a strong emotional response, but some find its styling too conservative.

Well-engineered and praised for its refinement, the Phaeton’s relatively tiny sales say everything about the need to carry the ‘right’ badge.

Pricing risk manager, Lombard

IN A sector aimed at the more senior executives, the choice will often focus more on comfort, brand and quality perception than rental cost.

On price and tax the Jaguar is number one, offering the lowest emissions and best fuel economy. It’s a good value package with the second lowest rental.

The Volkswagen Phaeton has the lowest net price and this drives the cheapest rental, but it may find it has a hard time competing with the established luxury brands.

The S320 CDI is brand new, packed with technology, and may bring Mercedes-Benz back to the forefront in a sector it previously dominated. However, it has the highest rental.

The Audi and BMW are both well established, incorporating significant technology. The choice is down to personal preference.

The Range Rover occupies a luxury niche – few will need the off-road capability, and the emissions level is stratospherically high.

Head of strategic and international sales, Arval

THE new Mercedes-Benz S-class is a superb all-rounder – refined, elegant, with a purring engine under the bonnet. On the downside, it lacks cabin and boot space compared with its rivals.

The 2.7-litre twin-turbo V6 diesel Jaguar is the best model in the XJ range. Some engine noise is preserved to remind you that serious driving is an option, but inside it’s a very quiet car. Strangely, the boot is smaller than that of a Ford Mondeo so make sure you take your golf clubs along when you go for a test drive.

The 3.0-litre TDI unit is also the pick of the Audi A8 range. This car is stylish and spacious with a powerful yet quiet engine. Smooth handling and solid build quality make this a convincing all round package.

BMW has recently improved the 7-series’s appearance and now the model adds attractiveness to its existing mechanical excellence.

The recently revised Range Rover borrows from both Jaguar and BMW, although it lacks the quiet smoothness of its rivals.

Volkswagen’s Phaeton isn’t a natural choice at this level, but if spaciousness is vital then this car becomes a strong candidate.

Trade services manager, Custom Fleet

IT IS only a few short years ago that the term ‘luxury diesel’ would have been a real misnomer, but times have changed and these cars are aimed squarely at the senior manager or director for whom diesel is no longer a dirty word.

Selecting the best here often boils down to personal preference, but our choice for first place rests on the broad and superbly designed shoulders of the Range Rover – the quintessential luxury all-rounder with strong off-road ability.

It says a lot for the rest that the BMW looks like good value at more than £100 per month less than our third choice, the Mercedes-Benz S320, which wins my award for best-looking car.

The Jaguar pushes it a close fourth but does not have the desirability or appeal of the two German saloons, nor the utility of the Range Rover.

It may be surprising to see the Audi A8 so low down but high SMR costs, largely down to the excessive price of replacement tyres, count against it.

And finally we come to the Phaeton, Volkswagen’s attempt to move upmarket. Judging by the numbers you sees on the roads, it’s a move that hasn’t paid off.

Senior pricing analyst, Masterlease

THERE is no real reason for these cars to exist in today’s market. While they are the flagship models for their various manufacturers, they don’t do anything that their smaller stablemates can’t do just as successfully, and for considerably less cost.

Yet it is precisely because they are the flagship models that there is, and always will be, a market for them, both new and used. Ownership demonstrates that you have arrived, that you won’t settle for anything less than the best, and to many people that alone justifies their cost.

The obvious odd one out here is the Range Rover, being the only non-saloon bodied vehicle.

The Jaguar trades on its heritage, while at the same time utilising the latest technology for the aluminium bodywork and drivetrain.

The Audi, also aluminium bodied, is the more sporting of the group, while the new S-class is still seen as the epitome of luxury and comfort.

The BMW, with its recently toned-down styling, follows a similarly driver-orientated route as the Audi, while the Volkswagen represents the (relatively) value for money option.


THE new S-class is significantly more expensive on rental rates than any of its rivals, and is the only car featured to top the £1,000-a- month barrier. The Phaeton is the cheapest – around £100 less a month than the others.


THE Range Rover is a big, heavy beast with not much in the way of aerodynamic efficiency, and it is easily the worst for CO2 emissions. The Jaguar and BMW lead the way with very low emissions for the type of car.


NO surprise that the Range Rover, which weighs in at more than 2.5 tonnes, isn’t that economical. The Audi, BMW, Jaguar and Mercedes-Benz are all evenly matched around the 34mpg average mark.


THE Range Rover is king of retained value, holding 41% after three years/60,000 miles. The VW Phaeton retains the least – it hasn’t got the prestige badge, although the five-seat version would fare better.


AS the newest car, the S-class hasn’t got much support – the average discount is £7,700. VW is the most generous at £12,000, closely followed by Audi, which provides an average of £11,000 off.


THE BMW 730d will be the cheapest car for a fleet to maintain, costing around £2,500 over three years/ 60,000 miles. The Audi and Mercedes-Benz will cost around £1,000 more over the same period.

How the panel voted

1. BMW 730d

IT appears the recent facelift has done wonders for the 7-series. The toned-down looks make it less visually challenging and compliment the excellent driving dynamics and cost-effectiveness.


THE S-class is joint first, although the BMW scores more first-place scores from our panel. However, the S320 CDI remains a brilliant all-rounder, but it is much more expensive than the 730d.


FOR so long a style icon, the Range Rover gets better as the years roll by. The TD6 impresses for its appeal, style and off-road ability, but loses marks for its high emissions and low fuel economy.

4. AUDI A8 3.0 TDI

THE A8 is the most sport-oriented car of this group, delivering a rewarding drive allied to elegant styling and fantastic build quality. Only the very high SMR costs mark it down.


VERY effective in cost and driver tax terms, the key criticism of the XJ is its old-fashioned look. Under the skin it’s bang up-to-date, but it is marked down for being too conservative.


A FANTASTIC car, but the Volkswagen badge simply isn’t strong enough to compete with the premium heavyweights – and the amount of Phaetons sold backs this up.

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