So, to borrow a phrase: what car? Our family daily was a privately owned 2009 Volkswagen Tiguan 2.0 TSI 4Motion Sport, and the new car had to perform similar tasks.
Four-wheel drive was inessential, but both front-runners happened to have it. One was the Subaru Solterra Touring: I like the brand, it’s brisk at 6.9sec from rest to 62mph and standard equipment is excellent, but it waned on aesthetics, range and boot space.
The Skoda Enyaq 85x Sportline Plus couldn’t quite match the Subaru’s kit but had much more space, a little more pace, a quarter more range (officially 328 miles in total) and, in a sober colour, I could handle the subjectively awkward styling. Its smarter interior and the proximity of a Skoda dealer would be welcome bonuses.
Although the Solterra’s retail price of £54,840 was £6235 higher than the Enyaq’s, the BCH payments quoted by Subaru dealer AF Noble & Son in Penicuik came in lower. Opting for a three-year term and an annual allowance of 5000 miles, it was priced at £458 per month, financed through Black Horse.
Once pearl black paintwork was added, lease broker Fleet Sauce in Wrexham quoted £521 per month for the Enyaq via Lex Autolease. There was nothing extra to pay in month one on either vehicle; just 36 equal amounts.
For the Skoda, that schedule was only about 1% more expensive over three years than shelling out 12 months up front: a small price for improved cash flow.
The tax savings vary depending on a few things: whether you’re a sole trader on the one hand or a limited company director taking most of your pay via dividend on the other; what your personal tax band is; what level of corporation tax your limited company pays; and whether your business is registered to pay VAT.
A non-VAT-registered sole trader in the basic rate band will save 20% compared with paying for the same car out of their after-tax earnings on personal contract hire. In other words, they would give up £417 in monthly take-home pay for the Skoda rather than £521. If they are VAT-registered, the saving increases to 27%.