Fleet News

Contract hire survey: premium upper-medium diesel

TO succeed in the premium upper-medium sector, having a diesel engine is a must because of the lower benefit-in-kind tax bills for drivers.

Audi, BMW, Mercedes-Benz et al have reaped the rewards with massive growth in the corporate sector. However, Lexus’ attempt to make a mark has been severely hampered by its petrol-only range. As a result, seven years on from the launch of the IS, Lexus has finally added a diesel to its all-new range.

And there are two versions to choose from – the standard models or the Sport versions with shorter gearing for a sportier drive. We’ve chosen the latter to compare as it competes on price and sporting intent.

But it faces tough competition. The Audi A4 and BMW’s 3-series are consistently among the top-10 best-selling diesel models in the fleet sector, while the Mercedes-Benz C-class is enjoying a renaissance after a host of revisions last year.

Completing the line up is the Volvo S60 – more tourer than sports saloon – and the Jaguar X-type, a car which has never quite caught the imagination of company car drivers.

The Jaguar’s travails indicate the size of the challenge facing the Lexus.

Sean Bingham
Director of new business, Bank of Scotland Vehicle Finance

This sector has seen huge growth since the introduction of CO2-based taxation in 2002, with diesel registrations up almost 75% by 2005.

The Lexus offers bags of equipment and renowned reliability but is let down by poor economy and high CO2.

The Jaguar and Volvo are capable, but fail to excite. So the winner is German, but which one? The Mercedes is comparatively underpowered although it remains a compelling package, while Audi’s 2.7 TDI is a delight and is a strong overall proposition. But in the BMW you get the sharpest drive, the best fuel consumption and the lowest CO2.

Andy Brown
Operations director, Inchcape Fleet Solutions

The Lexus is a pretty car and the long-awaited diesel ticks all the boxes, allowing Lexus to compete with BMW.

The Audi’s 2.7 TDI engine is a worthwhile upgrade on the 2.5 but the 2.0 TDI 170 may be better value.

The 3-series is the definitive car in this sector and BMW has not rested on its laurels.

The interior is modern and the new-age styling theme seems to work best on the Three.

The C-class suffers from high prices and a complicated range, while the S60 is the oldest but scores on space, kit and performance.

The X-type has not been successful, but the traditional looks offer their own appeal.

Ivor Johnson
Fleet management and operations director, Leasedrive

In the this class, the 3-series reigns supreme. In terms of performance, the good value Jaguar X-type is the BMW’s nearest rival. The well-built Volvo is let down by its ride and handling – likewise, the stiffly- sprung Lexus.

However, the IS220d has the best specification and highest residual value. Slowest of the pack is the supple and quiet Mercedes, which still has cachet but no longer boasts legendary build quality. The smooth Audi A4 puts up the best overall challenge and is the cheapest to lease.

But the refined BMW will deliver the most driving fun and remains the benchmark.

David Hosking
Managing director, Tuskerdirect

Of this group our favourite is the Audi A4, which in S line trim looks superb. The 2.7 TDI is also the best of the bunch and spec levels are high.

These factors score it just ahead of the BMW which, in M Sport set-up, is prone to being twitchy on all but the most perfect road surfaces.

Third is the Volvo as it’s a great car to drive with excellent build quality. The C-class feels underpowered and while it’s good-looking it is unspectacular to drive. The Lexus is another exciting looking model, but it too is a disappointing drive.

We’re not great fans of the Jaguar X-type and the 2.2-litre diesel is a harsh engine that does not gel well with the car.

Average leasing rates

THE Volvo has easily the highest monthly rental, thanks to a low RV forecast and high SMR rates.

The Lexus matches the BMW and Jaguar, but the Audi is cheapest thanks to a low SMR bill and strong RV.

CO2 emissions

THE Lexus lags well behind here because in Sport guise it has shorter gear ratios than the standard IS220d – the latter would emit 168g/km. The BMW and Jaguar lead the way on low emissions.

Fuel economy

AGAIN, the Lexus suffers in Sport trim – the standard model returns 44.8mpg. The rest are evenly matched around the mid-40s, although the BMW and Jaguar lead the way again on fuel economy.

Residual values

THE Jaguar has never really fulfilled its role of being a ‘British’ 3-series, and its residuals reflect this. The Lexus has the highest RV, although the BMW runs its close and is just one percentage point behind.

Average discount

JAGUAR, Mercedes-Benz and Volvo are the most forthcoming with support, while Lexus offers the least discount because the IS is so new. However, BMW is equally frugal despite the 320d selling so well.

Average maintenance

AUDI leads the way as the A4 is the only car with projected SMR costs below £2,000. The BMW and Lexus are evenly matched, as are the Jaguar and Mercedes-Benz, but the Volvo is well off the pace.

Fact file

BMW 320d M Sport

P11D price: £27,102
2006 BIK bill (40%) £2,168
2006 VED bill £135

Rental Rates:
BoSVF: £487
Inchcape: £503
Leasedrive: £494
Tuskerdirect: £485

VERDICT: Still the daddy of the sector, blending driving and badge appeal, low emissions and high fuel economy. Strong RV despite huge sales success.

Audi A4 2.7 TDI S line

P11D price: £25,962
2006 BIK bill (40%): £2,596
2006 VED bill £160

Rental Rates:
BoSVF: £448
Inchcape: £494
Leasedrive: £468
Tuskerdirect: £478

VERDICT: Lowest monthly rental, cheapest SMR rates, high specification levels and understated styling see the Audi claim a strong second.

Mercedes-Benz C220 CDI Sport

P11D price: £26,542
2006 BIK bill (40%): £2,548
2006 VED bill £160

Rental Rates:
BoSVF : £449
Inchcape: £493
Leasedrive: £488
Tuskerdirect: £493

VERDICT: Can’t match the 320d for driving fun, but C220 is smooth, stylish and has the second lowest rental thanks to strong support from Mercedes.

Lexus IS220d Sport

P11D price: £26,710
2006 BIK bill (40%): £3,098
2006 VED bill: £195

Rental Rates:
BoSVF: £498
Inchcape: £492
Leasedrive: £500
Tuskerdirect: £492

VERDICT: A mixed bag, with praise for its looks and refinement, but loses out with high emissions and low fuel economy. RV is sector-leading.

Volvo S60 D5 SE Sport

P11D price: £27,357
2006 BIK bill (40%): £2,626
2006 VED bill: £160

Rental Rates:
BoSVF: £480
Inchcape: £541
Leasedrive: £538
Tuskerdirect: £514

VERDICT: As a sports saloon the S60 is outclassed, but it is well-built and equipped, and comfortable. Weak RV and high SMR make it the most expensive to lease.

Jaguar X-type 2.2D SE

P11D price: £26,327
2006 BIK bill (40%): £2,211
2006 VED bill £135

Rental Rates:
BoSVF: £452
Inchcape: £519
Leasedrive: £525
Tuskerdirect: £508

VERDICT: Low emissions and good economy but the X-type doesn’t fire the imagination. Poor RV, but on the money for rental thanks to strong support.

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