Conference terri::cars_uk

Its a bit late to complain now!!  It was all decided 18 months ago.

Digital wanted to save money on its company car costs (the infamous 26 million 
a year). So they talked to various manufacturers, and got the best deal 
available from Vauxhall. 
As Digital now pays less for their cars, they have been able to reduce the 
amount of money they give to the employees (the standard base cost + market 
supplement as appropriate), but they still offer the "same quality" (?apart 
from electrivc windows and air conditioning?) of car - PROVIDED you take a 
Vauxhall.

If you do NOT want to have a Vauxhall, there is nothing official to stop you - 
you can get a quote and order one. However, as the Vauxhalls are all about 25% 
cheaper - it means that all other cars are about 25% (of full list price) more 
expensive.....

It was all fully explained in brochures 18 months ago.

Cheers, Chris

    Aha !
    
    Brochures, 18 months ago...
    
    Thanks for the prompt reply.
    
    I guess I should have been paying more attention. In my naivety I
    thought we had negotiated a "if it's a Vauxhall you get it cheap" type
    of deal.
    
    As it turns out what you suggest is that because we can get Vauxhall's
    cheaper the provision we are given is less.
    
    So can I just check one thing, do Digital still pay some part of the
    overall lease price that we don't see in the quoted price given to us.
    
    Let's say we have a quote for a 18000 car (non-Vauxhall). We assume
    that the leasing company can negotiate a 10% discount (they usually get
    more I believe). The servicing costs on these cars (according to What
    Car) are around 1500. Tyres (4 sets) around 1300. Bringing a grand
    total of around 19000.
    
    It looks like we are seeing quotes for cars of this value of around
    6400. At the end of a three year deal the car has been completely paid
    for including all costs, the leasing company gets the full resale. Is
    this normal in leasing ?
    
    Are the quote prices we are given actually funny money that doesn't
    actually represent the actual payment that is made to the leasing
    company ?
    
    Regards,
    
    Mark

    Remember there is an insurance loading included in the driver price
    so the price quoted is not the actual lease cost. 
    
    The minimum car allowance is based on a petrol Cavalier 1.6LS (as is the
    mileage rate). 
    
    We are lead to believe that Digital has negotiated a good deal with
    Vauxhall hence the preferred list.
    
    I think the reason for the descrepency in prices is that the car
    allowance is set in stone along with the preferred list prices last 
    July and the increase in lease costs has not been taken into account.
    
    Car Fleet are not under any pressure to review this because the company
    has made it clear to us either take a Vauxhall at a reasonable cost
    or leave the scheme. Quote for other models but if the price is high
    either take it or leave it.
    
    There is still a little bit of flexibility in the car scheme and I
    accept that Vauxhalls offer the best deal. I'm also busy using my GM
    credit card and am building up a tidy amount of points to cash in
    when I change my lease car next year.
    
    Royston

Re. .2

You seem aggrieved that the lease company have accrued the cost of the car
over the three years, or am I missing the point ?

My understanding is that the lease company is in business to make money. If that
money/profit is the resale value of the car you have used, after 3 years, then
what the heck.

Personally the only way I'm going to be driving around in your example 19k car
is if it's through a company car scheme. I'm certainly not going to have the 
disposable income to be able to front the cost, or pay off a loan.

The history of company cars as a perk was always "Sorry chum, we can't pay you
more because the taxman is going to clobber you, and our NI contributions,
pension contributions, etc are going to go through the roof, so have this motor
by way of compensation". Fortunately we work for a company that gives us the
option to take the cash instead. In my case this is the difference in being able
to afford to work here, or not.

Yes, I'd love the choice of any car in the market place. Equally I'd like that at
a silly price. But at the end of the day, if someone wants to provide a car I'm
not going to baulk at their choice. If I don't like what they're offering I'll
take the cash and either buy my own or buy something else to compensate.

TKS

    
    Re .0
    
    Yes. The rip-off scheme changes were announced over 18 months ago.
    I think that what wasn't clear was how much extra we would be paying
    for non-Vauxhalls. There were two recent quotes that were posted here
    for a Passat estate and a C-Class Merc that were both over �6000 pa.
    I have seen a large number of contract hire quotes in the press that
    offer C-Class Mercs at a lot less than �6000 for 36months/36000 miles.
    Even if we add the insurance element the gap is huge. (> �1000)
    
    I currently have an E220 Merc that is only costing �5,600 (18 months) 
    and this has a higher depreciation than the C-Class and cost a whopping
    �6,500 more than the C-Class with the quoted spec. It was also leased
    when interest rates were a lot higher than they are now. 
    
    In the same vein I have not seen any quotes in the press for 1.6 
    Cavaliers that match the nominal �2950 (which includes insurance).
    
    Still it's good to know that I'm contributing to the saving :-(
    
    Richard.
    
    
    
    

    Do cost centres still contribute anything towards the cost of the
    lease? They used to be charged a substantial amount...
    
    If they do pay (any CC managers reading?) then the comparison is even
    more unbalanced between in and out. Not that I care, I'm lucky enough
    to be out of the scheme as of September.
    
    regards
    john

    Cost Centres have to meet the cost of the car supplement to the
    employee & any costs which neither the employee nor the Leasecar nor
    the Insurance company will accept, & the cost of individuals lease if
    a car is chosen in lieu of supplement/salary.
    
    The CC does not have to pay any *extra* premiums/penalties except where
    an employee leaves & is consequently no longer receiving a job supplement
    from which the CC can deduct the cost of lease. 
    The CC has to stump up the lease cost until the vehicle is disposed of.
    The CC is of course no longer having to bear the salary of the ex-
    employee either. If the slot is filled by another with their own
    lease-car, then the CC has to bear both the leasecar costs until the
    unused leasecar is disposed of.
    
    Tony.
    

    re: .4
    
    I  can't dispute the car scheme is a significant benefit. You are
    right, you haven't missed the point, I am complaining about paying in
    full for a car and watching the leasing company walk away with the
    residual. Whether the car costs 19000 (just an example I chose) or
    12000 doesn't make any difference. I believe it is unusual for a lease
    of this nature to reward the lease company with the full residual of
    the car at the end of term. This is why leasing grew in popularity. If
    you chose a car (say a Mercedes) with a high purchase price, because it
    enjoyed a really good residual value the actual lease costs were
    approaching affordable. Under our current scheme the residual of a car
    doesn't seem to matter one jot, excepting the fact that the leasing
    company walks away with an even fatter profit at the end of term.
    
    I have no problem with leasing companies making money. What I insist on
    is a fair price. Currently it looks like the lease company is easily making
    around 35%-40% margin on every deal. I don't think this is normal but I
    shall happily stand corrected.
    
    My concern is that we have negotiated such excellent terms on Vauxhall
    cars that the leasing company is having to inflate every other lease in
    order to avoid losses. I don't think that this is fair. It smacks of
    keeping everybody behind after school because someone stole the
    blackboard duster.
    
    I can't disagree that the scheme is still very interesting if you want
    a Vauxhall, it's unbelievable (as .4 points out). I know that it comes
    down to free choice as to whether you stay in or not and like yourself
    I doubt if I could afford a 19000 car privately. I believe that no
    matter what the actual cost of the car is my same concerns apply.
    
    I don't want to leave the scheme but I don't really want a Vauxhall and
    I know a number of other people in the same situation. What I would
    like to see is a return to a fairer equilibrium between "preferred" and
    alternatives.
    
    Is anybody from Car Fleet reading this ?
    
    Does anybody know what the Vauxhall population has become ? Is it
    significant, because if not it might be better to release the
    constraints on the Vauxhall scheme.
    
    Having originally been smacked gently with the 18 months old brochures I
    didn't pursue any line of enquiry with Fleet. I shall try to get in
    touch soon.
    
    re: .4 - thanks for the support.
    
    Regards,
    
    Mark                            

    the last few lines of the previous note should have read....
    
    re: .5 - thanks for your support.
    
    Mark

    re .8
    MArk,
    
    You make some good points, I suggest you take them to whoever is in
    charge of car fleet.
    
    From VTX:
    
    The central number for car fleet enquiries is (7)830 4858.

    I think it is dubious to compare the quotes we see on cars with any
    that you may see in the press for Vauxhalls and others. I believe,
    though accept I may be wrong, that our price is supposed to cover
    everything other than accidental damage. So insurance is in, servicing,
    replacements of tyres etc, vehicle excise duty etc. Also there are the
    lease costs of financing, admin, profit and at the end the resale
    value. I also remember that as part of the Vauxhall deal we get a
    discount on parts and servicing. So I suppose Vauxhall quotes are below
    average and non-vauxhall quotes are above.
    
    Andrew
    
    PS I read this morning that one company (FMS?) had declared their
    company cars smoke free zones. Apparently the resale value of a car
    which has been used as an ashtray for 3 years is noticeably less than a
    clean example.
    
    PPS Saab have introduced a 900 variant with no ashtray or cigar
    lighter, pointing out that many people do not smoke and therefore these
    extras are of no interest.

    > PPS Saab have introduced a 900 variant with no ashtray or cigar
    > lighter, pointing out that many people do not smoke and therefore these
    > extras are of no interest.
    
    Ashtrays have been an option on Marcii since the early 60s! :^)
    
    Mark

    
Re .11

�    I think it is dubious to compare the quotes we see on cars with any
�    that you may see in the press for Vauxhalls and others. I believe,
�    though accept I may be wrong, that our price is supposed to cover
�    everything other than accidental damage. So insurance is in, servicing,
�    replacements of tyres etc, vehicle excise duty etc. Also there are the
�    lease costs of financing, admin, profit and at the end the resale
�    value. 
    
    Contract hire covers all these things except insurance. So I believe
    DEC quotes are (and should be) comparable with the outside world.
    
    Richard.

   > PPS Saab have introduced a 900 variant with no ashtray or cigar
   > lighter, pointing out that many people do not smoke and therefore these
   > extras are of no interest.
    
    What - nowhere to plug the CB into?  Its not just smokers who use this
    socket!
    
    Jc
         

I've just had a conversation with Car Fleet about replacing my car in April.
A current quote of #5247 for a Golf GTI 16v is made up of:

		12 x Monthly rental quoted by lease company
		#900 level 15 insurance
		#100 Non Vauxhall `fee'

	(# = UKpounds)
	
	It appears that the only `penalty' for ordering a non-Vauxhall is the 
#100. This may be reasonable for the extra admin required. Though the insurance
figure of #900 per year is a bit steep for an over 50 like me!!

Regards

John

    
    I believe that Digital insurance is TPF&T only, so �900 sounds
    incredible! 
    
    Mark

    
    Level 15 should be �800 according to VTX.
    
    If you get it down by �100 I'll have half.
    
    Regards,
    
    Mark

  
  re:.15
  
  I thought the non-Vauxhall fee was in the order of a few hundred quid,
  maybe 400, rather than 100?
  
  Chris.(who's dreams of a Honda Civic VTi with crap fuel economy, but
         great performance were dashed when he received back quotes for 
  	 it; and ended up with a leasemobile Cavalier)

    
     Re the insurance bit - 
    
     are we still being penalised for all these 18 year old Deccies driving
     around in SRI's  ?
    
    
    Gary

Which 18 year olds would they be then?

If we are being penalised, it is because, collectively we crash too many cars, 
have too many broken into, drive like nutters.

I realise that statement doesn't apply to everyone, but most of us who are 
mild-mannered Mr. Average in the office, turn into complete b**&^ds on the 
road. This is not something which is only confined to the younger drivers.

I actually doubt whether we have any company car drivers under 20.

Stuart

Vauxhall have just been appointed IBM's UK leaser. The business potential 
is about 3,000 cars a year from IBMers.

It would be interesting to know what they are paying for their cars?

John 

The �100 non-vauxhall fee is no doubt in addition to the fact that the 
discount we get on the vauxhall's is higher. 25% was mentioned at the 
time the new scheme was set up, but I believe this has been reduced as we 
didn't achieve the expected (but not commited) volume.

No doubt because so many non-vauxhall lovers paid more or walked away!

I did talk to Doug Arnold at the time, and the discount varied, but was 
around this figure on the high volume models, but less on frontera's and 
some top-range cavaliers/calibra's.

The contract was negotiated on predicted volume, but he was carefull
to point out that digital did not sign anything to guarantee the volume
we would purchase. Good job too I think as I'm sure that in this company
we're just too picky to go for a single source deal like this.

In my own case, I just couldn't face a foxhole at any price, so came out, 
bought the car I was currently leasing and am still happilly driving that.

Richard 

    re: .15
    
    Are you sure the �100 is just an annual fee ?  The prices make more
    sense if it is a monthly fee :-)
    
    tmp

    Chaps,
    
    When checking our lease prices against those published in Newspapers,
    etc, remeber that out leases are based on annual mileages of 20,000 (or
    greater) and those published are normally for 10,000. Also, don't
    forget the 17.5% VAT.
    
    Peter

    
    Re .last
    
    Sorry, but this is not correct.
    
    1. The quotes are ALL based on same fixed period/mileage.
    2. We (employees) pay the quote.
    3. The price paid by Digital can differ wildly from the quote.
    4. We (employees) do not pay VAT on the lease/contract.
    5. Digital is charged the VAT but claims it back from HMCE.
    
    Richard.

    Richard,
    
    In .5 you gave as an example a Mercedes for 36month/36,000 miles. I am
    under the impression that my Digital lease is 36Month/60,000 miles. Are
    you saying that this makes no difference or that the Merc you are
    comparing with is the same as your Digital quote.
    
    Andrew

    You have to remember that the company effectively reduced the
    car supplement by 700 pounds last year anyway!....so it's a double
    wammy, and yes, I believe the company will be trying to divest itself
    of what is fast becoming more of a tax liability than in the past, and
    possibly a liability to its employees also.
    
    Tim
    

    You also have to remember that the Digital lease price comes from gross
    ie untaxed income. So if I were paying 6,000 for a Digital lease and
    came out of the scheme I would only see 3,600 increase in my salary.
    Speaking as a 40% tax payer, for riff raff it would be 4,500.
    
    Andrew