Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Iain Cottingham

Hi,

I'm after advice / help. My current 64 plate Outlander Phev is due for replacement of its 3 year lease in January 2018. My monthly lease allowance is approximately £800, unfortuantely not enough for either Volvo XC90 & XC60 hybrids.

My two primary requirements being CO2 emissions < 75 (thank-you spreadsheet Phil) and a SUV build (I'm 1.9M tall with a dodgy back so need to step into, not down into the vehicle).

Do I go for a direct like for like Outlander PHEV replacement or is there a better alternative vehicle within my monthly allowance?

Many thanks.

Iain

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Falkirk Bairn

Honda CRV PHEV due early 2018.

Lexus RX but it will depend on your milage - high mileage = higher monthly payments.

I have tried the 300NX & thought it poor on the open road - just no go in it but great around town.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - badbusdriver

Not an awful lot out there (using autotrader search) with a high seating position and >75g/km.

As well as your Mitsubishi there is the Kia nero. But if you want to throw in an MPV, the BMW 2 series active tourer is an option as is it's kissing cousin, the mini countryman phev. If you are in a position to go full electric, the renault zoe has a high seating position.

No idea about monthly lease rates though.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Iain Cottingham
Thanks i'll look at the Honda
Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - craig-pd130

Look at a BMW 225xe - it's an MPV so high roofline and fully adjustable seats, including generous height adjustment so getting in is very much stepping into the car, rather than lowering yourself down.

I'm 2.5 inches shorter than you but have tons of headroom. Very roomy interior. I got mine in July and the company contract hire is £270/month on 6+35.

It's a quick car in Sport mode (0 - 60 in 6.5 secs, 30 - 70 in 6.7 seconds in kickdown). Comfy ride and very quiet. I get a genuine 15 - 16 miles commuting on a full charge (it will run up to 78mph in Max eDrive mode). Motorway economy on long runs at a cruise-controlled 75mph is 45mpg.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - SLO76
So close to being able to afford the XC60 or the XC90 both of which are great cars but then I think £800 a month is an insane amount of money to spend leasing a car. Our Honda CRV 1.6 DTEC SE-T costs me £259 a month on a four year lease with 10k p/a mileage allowance. It'll exceed 60mpg on a distance run, averages 56mpg day to day, costs £20 a year to tax and has all the room anyone could ever need. I can't see how a firm justifies spending so much. Nice if someone else is paying however.

Out of curiosity, what fuel economy are you averaging on the Mitsubishi? We looked at them when we took the CRV but all the reports were showing real world economy was only a fraction of the official figure. These hybrids rarely stack up in reality.

Edited by SLO76 on 06/11/2017 at 19:46

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Engineer Andy
So close to being able to afford the XC60 or the XC90 both of which are great cars but then I think £800 a month is an insane amount of money to spend leasing a car. Our Honda CRV 1.6 DTEC SE-T costs me £259 a month on a four year lease with 10k p/a mileage allowance. It'll exceed 60mpg on a distance run, averages 56mpg day to day, costs £20 a year to tax and has all the room anyone could ever need. I can't see how a firm justifies spending so much. Nice if someone else is paying however. Out of curiosity, what fuel economy are you averaging on the Mitsubishi? We looked at them when we took the CRV but all the reports were showing real world economy was only a fraction of the official figure. These hybrids rarely stack up in reality.

Sounds like to me that the OP is getting a 'green status car', as I was under the impression that the 'under 75g/km' rule for CO2 has been scrapped for the zero rated VED band - its only actual electric-only (actual zero CO2 emissions at tailpipe) that now (for new ones at least) qualify, and besides, the next level up (for cars with a list price [including optional extras] of under £40k) is only £140 VED PER YEAR, hardly a big dent in the wallet of a firm, especially when they could lease a much better car of the same size for a significantly less amount (at least half that) and pay less in total when fuel, servicing and BIK taxes are added up.

It should also be noted that going for an expensive car, 'green' (not really [the PHEV's real mpg is an ave of 58 and ranges from 45 - 67mpg, plus where and how the electricity is mainly produced in the UK) which costs over £40k when new will attract a big penalty in VED. I agree with others saying they should just go for an 'ordinary' car suitable for the mileage/driving the OP actually does (not just to tick a box for so-called environmental reasons) that they find comfortable etc.

Not having a go at the OP specifically, but I've increasingly noticed that many company car owners, particularly upper middle and higher up managers are now spending HUGE sums on these vehicles (even under lease), which often takes significant sums away from the rest of the firm that could be better spent on productivity items for staff, and goes some way to stem the annoyance of lower ranked staff who see the same managers get more and better perks (most of which they don't need) as well as at least maintaining pay or getting decent rises, whilst they get nowt and struggle with 5yo deficient PCs and dodgy office chairs. I used to work for a small firm (it didn't earn a fortune) when the bosses, during the recession, bumped up their cars from mid premium saloons to top-of-the-range ones and 4x4s whilst asking us for pay cuts in 'hard times'. Needless to say this didn't go down well and was remembered.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Iain Cottingham
Many thanks for the response. I've been quoted by Leaseplan £1200 pm for the XC90 & a similar £1000 pm for the XC60. Apparently the high monthly leases costs are due to the low estimated residual values due to no one really knowing when the battery will need replacing (alleged cost £20k)

As i do a lot of motorway driving around up to 80mph, the average fuel consumption isn't great around 25mpg. It costs around £30 in petrol to do the round trip of 135 miles to/from work. So 22p per mile.
Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - craig-pd130
As i do a lot of motorway driving around up to 80mph, the average fuel consumption isn't great around 25mpg. It costs around £30 in petrol to do the round trip of 135 miles to/from work. So 22p per mile.

Based on my experience, the 225xe will give around 45 - 50mpg for a round trip like that, assuming you start with a full charge and do not charge again. The economy is pretty good if you don't cruise at more than 80mph.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - SLO76
I take it that's with a high annual mileage as the XC60 can be had with 10k p/a for just over £800pcm? Your usage doesn't suit a hybrid powertrain at all so I'd advise asking whoever is in charge of this decision to think again. Does it really have to be such a low emissions rate? A large diesel SUV or exec would cost far less to lease and fuel. It's makes zero sense to pay vastly more to run a hybrid to save a few quid in tax surely?

A Volvo XC60 2.0 D4 can be had for less than £570pcm though even this is more than double the rate I'm paying on an equivalent sized Honda CRV. I've bought perfectly reliable cars for £800 that've run for years so the thought of wasting that sort of cash on a monthly lease horrifies me. I'd rather take a wage rise and buy my own motor if that's an option.

Edited by SLO76 on 07/11/2017 at 08:41

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Falkirk Bairn

A friend did a lot of business mileages bought cars say 1-2 years old with 10-15K on them.

Bought a well specced model with 18 / 24 mths warranty left - looked after the car.

Clocked up his 30K miles & sold the car with 40/45K & some warranty left for reassuring the private buyer - average miles & in good condition - next car was the same routine - worked for him & saved lots over trying to lease a car for 3 yrs /90K miles.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - RichardW

>>As i do a lot of motorway driving around up to 80mph, the average fuel consumption isn't great around 25mpg. It costs around £30 in petrol to do the round trip of 135 miles to/from work. So 22p per mile.

Which rather makes a mockery of the 'Low CO2' moniker and BIK tax!!

Anyway, assuming this is a company motor...

List is around £35k. Rough BIK figures:

18/19 13% £4555 taxable £910 payable @ 20%, £1820 @ 40%

19/20 16% £5600 / £1120 / £1240

20/21 15% £4900 / £980 / £1960 (still be be agreed by HMG - gradutated for electric range)

If you went to a diesel XC60, CO2 around 130-150 depending on model. Based on 140g/km and list of £40k

18/19 29+3% £12800 / £2560 / £5120

19/20 32+3% £14000 / £2800 / £5600

20/21 33+3% 14400 / £2880 / £5760

So significant savings in BIK for you, but offset against increase in fuel costs; company's cost would be reduced by going diesel, but not sure if enough to offset your increased costs (or if they would even play that game!). Surely though at £800 / month, which is best part of £30k over 3 years, they'd be better off buying it, and hoping that they could trade it in for more than £5k - although that somewhat depends on how many miles you are doing.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Iain Cottingham

Many thanks for the comprehensive BIK analysis.

I'm probably under a misapprehension, I've been told by my HR/payroll team that there is a change in BIK company car tax in 2017/18. If the vehicle has CO2 emissions greater than 75 then you pay the higher of the CO2 BIK or your monthly lease equivalent (even if you do not receive it). Which in my case would be £800 x 45% = £360 pm or £4,320 + the fuel benefit.

With my current vehicle choice, I receive a "cashback" of £200 for not utilising the full allowance plus I receive a fuel card for all mileage.

I'm in a very fortunate position that a fully expensed company car + fuel + cashback has a low tax charge. However my marginal rate of tax is effectively 90% as I no longer receive tax relief on the majority of my employers pension contributions.

Hence a big motivation in my vehicle choice is the BIK tax impact.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Falkirk Bairn

>>Hence a big motivation in my vehicle choice is the BIK tax impact.

Buy your own car & pocket the allowance, if this is allowed.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Engineer Andy

>>Hence a big motivation in my vehicle choice is the BIK tax impact.

Buy your own car & pocket the allowance, if this is allowed.

It depends - if you do low mileage, work and/or private, then I would agree that having a car allowance and either keeping your current car (as I did at my last job) or buying a new one of your choice (I as I would've done if I had stayed) is by far the best choice, especially if you own a perfectly serviceable car that you like, or that the company car choices are not to your liking .

Its a different story if you do a large (over 25k miles) annual mileage, and especially if most of those are company miles. An ex-colleague was doing best part of 40-50k+ miles a year, and 2/3rd at least of that was company miles. There's no way he could've afforded the far higher insurance and maintenance costs, as well as the huge depreciation over the economic life of the car (probably only 5 years from new at most), so he sensibly opted for a company car (a modest mid-to-upper sized diesel estate [not a 'premium' car], but perfectly decent) and let the firm pay for all the running costs except his own fuel for private mileage. The car would be bought/leased as an average mileage, good condition 2yo and sold/given back at 5yo.

I would've thought that the CO2 would low enough (even if not below 75g) on most mid-priced, mid-larger sized cars (other than big 4x4 SUVs) to not incur a huge BIK penalty, and, of course, not buying from a 'premium' German (or equivalent) brand with a price tag (new RRP) well into the £30ks or even over £40k but still buying a quality, comfortable car would seriously reduce the actual amount paid in tax by the OP, and if bought/leased at 2yo would be far less than buying new and incurring huge depreciation (whatever the marque) because it does huge annual mileages.

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - RichardW

I wasn't aware of the change to tax basis....am now!

It appears to be only applicable if you have a choice of cash or car, and is on the cash offered (rather than the lease value - although this may be same). You could get your company to say car only, then you will only be taxed on BIK, not the other rate. It might also be that depending on the car price, BIK rate, and cash value, then you may still end up on the BIK rate!

I would review taking the fuel card though - it's costing you over £10k in tax a year - do you really get through 8000 litres or so of fuel for private motoring?

You need a BIG spreadsheet to work this one out, but it may be that the options are only a couple of grand either way - and perhaps the total cost is not your main driver,so to speak.

Can you lease a TESLA X for the £800 / month? Would the 150-200 mile range work for your driving?

An enviable position to be in....!!

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Engineer Andy

I'm wondering if it would be better for the OP to just hire a chaffeured car for longer trips!

Seriously though, they may want to to think about giving him an incentive to move closer to wheer he works to save on travelling costs or to make greater usage of public transport (major saving IF you can book early) or even staying in a region for work meetings to reduce the need for longer trips.

My ex-colleague did that and it made a decent reduction in mileage, just for the sake of spending 1x £100 a week on overnight hotels and food (half of which he'd have to incur anyway even with travelling from home/the office) but saving far more on fuel (and also maintenance costs).

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Iain Cottingham
I would gladly have a shorter commute. I spend an equal amount of time commuting to Bristol and Heathrow (HQ in Paris) and when I can WFH.

My annual mileage is still around 19k, hence having the fuel card.
Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Iain Cottingham
The relevant link on the HMRC website is

www.gov.uk/government/publications/income-tax-limi...e

Interestingly the HMRC tax calculator doesn’t take into account this change ??

Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Iain Cottingham
Many thanks for everyone’s contribution.
I have decided to order an Outlander Phev 4HS.
Mitsubishi Outlander PHEV - Replacement of Hybrid Company Car - Iain Cottingham
Unfortunately the £855 monthly lease allowance isn’t enough for a Tesla X
 

Ask Honest John

Value my car