Takin' It To The Top

Sydney Morning Herald

Thursday May 6, 1999

MICHAEL LYNCH

More people are looking at leasing upmarket vehicles, particularly as the deals on offer become easier and more flexible. MICHAEL LYNCH reports.

The competition in the prestige car segment is hotter than ever. And flexibility of the current crop of finance deals has more people looking at leasing upmarket vehicles.

Once, Mercedes-Benz was not unlike the late Lord Denning's description of the law - like the Ritz, open to all but afforded by only a few. That is definitely not the case in the more (automotively) egalitarian 1990s.

"And you thought you could never afford a Mercedes-Benz" goes the advertisment - well, now you can through such varied options as a finance lease, an operating lease, an asset/hire purchase (where businesses are concerned) or through sale by instalment (designed predominantly for private buyers).

So how affordable is it? Depending on the scheme, it costs between $1,278 and $1,582 a month for a C240 Classic, which has a retail price of nearly $79,000, well out of reach of most motorists.

For example, a finance lease over 48 months, with a 45 per cent residual, is the cheapest C240 deal at $1,278.

The operating lease, over 30 months, with a 1 per cent pre-payment of $787, works out at a monthly charge of $1,382.

The hire-purchase deal, with no balloon payment, goes over 60 months at a regular charge of about $1,582, while the straight buy-by-instalment contract over 60 months, with a $20,000 balloon payment, will cost $1,322 a month.

To appeal to a wider group of buyers with a deal set up to tempt first-time Benz drivers into the new A Class, Mercedes is trying even harder - the latest is a hybrid of its operating, finance lease and instalment purchase programs.

Payments are spread over 48 months and there is no deposit. There are various end-of-agreement options: the customer can hand back the vehicle along with a $499 user fee, extend the agreement, or buy it outright at a minimum future agreed value.

Fancy something a bit racier than an upscale around-town runabout such as an A Class or a sedan such as the C Class? A Porsche might be more on the money.

Porsche Cars Australia, with Porsche Financial Services and Capital Finance, packages a number of purchase or lease options. These include the Porsche Consumer Lease, Hire/Term Purchase and Novated Lease programs.

Porsche Financial Services, set up in 1997 to bolster the importer's customer-service program, covers business loans and personal finance packages as well as car deals.

The cost of getting into a Porsche Boxster with manual transmission ($109,900) is similar to that for the Benz C Class - $1,401 a month, based on a 60-month lease with a 50 per cent residual.

The automatic Boxster is slightly more expensive, its $1,490 monthly charge reflecting its $116,900 rrp.

Further up the scale, Porsche Carreras can be had with manual or tiptronic gear boxes in either coupe or cabriolet form: the cheapest costs $2,346 a month, the most expensive $2,648.

At the top of the Porsche tree comes the Carrera 4, again available with either manual or tiptronic gearbox, and as a hard or soft top. The cheapest, the Carrera 4 manual, is $2,611, while the most expensive, the Cabriolet 4 tiptronic, is $2,930.

Is a BMW more your style? Through its BMW Financial Services subsidiary, the German importer has a schedule of options for all products - cars, motorcyles or even personal loans. The terms of finance contracts range from 24 to 60 months. Personal leases can be used to fund either a new or a used vehicle, and on-road charges and insurance costs can be included.

The Melbourne-based company has produced a finance package tailored to those wishing to get into its flagship vehicle, the 7 Series. Known as SUM - 7 Series Ultimate Finance Motoring System - the program is based on BMW Financial Services' fully maintained operating lease. It includes all scheduled service and maintenance, a replacement set of tyres and re-registration. As it is an operating lease, the concerns over resale value are taken out of the equation.

Terms of three to four years, and an allowance of up to 100,000km, are available. At the end of the deal drivers are given a series of options. They can return the car, select a new model and start a fresh contract. Or they can refinance the vehicle and continue driving it. Similar deals are available for all BMW cars through BMW Financial Services Auto Plan Plus.

Honda is often regarded as the Japanese equivalent of BMW. A company with a fine and lengthy tradition in motor sport (both Formula One and IndyCar), it has models such as the Accord, Legend and Prelude, and its first off-roader, the CRV, comfortably fits into the prestige bracket.

In an effort to boost its presence in this market segment, Honda introduced a tailored "Executive Benefit Programme" 18 months ago, squarely aimed at "user-chooser" drivers who salary-sacrifice as part of their package.

Part of the scheme involves maintaining vehicles for evaluation and drive days for familiarisation with the latest models in the company's range. Clients receive rebates on service charges during the first three years of the vehicle's life, which contribute to what Honda calls its low-operating and whole-life cost.

*All figures and information supplied by Daimler-Chrysler Australia Pacific; BMW Australia; Porsche Australia and Honda Australia.