Help! Lease deal - BMW iX £500/month

Showboat

Showboat

Showboat

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I'm really not up to speed to lease deals and pitfalls to be wary of, so i'd appreciate some help understanding where i've messed this up as it looks to good to be true.

Wife gets a nhs lease scheme from work, using salary sacrifice.
There is an offer of the following:

BMW iX ESTATE 240kW xDrive40 M Sport Edition 76.6kWh 5dr Auto
  • Fully comprehensive insurance, including 4 additional drivers
  • Routine servicing
  • Tyre replacement
  • Breakdown cover
  • Vehicle excise duty (car tax)
  • Windscreen replacement cover
  • No deposit
  • No credit check
  • Monthly deductions taken directly from salary
  • On the road support from a dedicated Aftercare Team for the duration of your lease

For a 12,000 mile a year lease its working out at £500/month (£6,000 year)
We probably spend about £1000 on things like insurance / servicing / tax and tyres and that's all included in the price above.
Then theres the savings in diesel vs petrol, using this it works out to a saving of about £800 a year. (https://www.zap-map.com/tools/journey-cost-calculator/)
So the true cost of owning this £80,000 car for 3 years is about £350 a month!
When i look at this car via lease deal websites its quoting an £8,000 upfront and £800 a month! But theres no deposit on this deal.

Too good to be true so what have i messed up.
 
Na the salary sacrifice deals are generally great. Just ring up and see if they have an actual car though. I sacrifice 580/mo for a Pug e2008 which is probably 300 net. If your deal is 500 net it's probably more like 1k/mo gross sacrifice, so do consider it'll reduce your pension contributions quite substantially.

Edit: also the headline mileage for me was for the full 3 years. I almost got caught out on a 3k/year lease till I realised.
 
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It’s salary sacrifice, meaning your wife’s salary will be reduced by the gross amount year. That impacts her pension which is based on her salary which will cost a not insignificant amount. If you don’t top that up, it will add up to a large amount over the average draw down period. Don’t forget those pensions are index linked so you’ll lose all the inflation too.

You may not be concerned about that though.

£500, sounds like the net amount, the gross will be significantly more and as such the impact on the salary will be significantly more.
 
Yeah, so its £900 gross broken down as:
Monthly Gross Salary Sacrifice: £ 899.07
Savings on NI: £ -17.98
Savings on Tax: £ -311.08
Savings on Pension: £ -121.37
Total savings per month: £ -450.43
Monthly Take Home Pay reduced by: £ 448.64
Monthly Car Tax Liability: £ 53.50
Total cost per month: £ 502.13

So the pension reduced by £121, i'll need to look into the impact of that. Thanks!
And it's 12,000 annual mileage.. heart skipped a beat when you mentioned that so appreciate it!
 
Check what 121 pension reduction means tho - as if she's only paying minimal then that could be half. And depending on age that could be mega i.e. 1m when she's 60(or whatever) or 500k.
 
Grab the deals when they come as they are few are far between. I'm only paying around £250 a month all in for my Etron which was a £65k car.
Unfortunately for me, those deals are long gone now. Shame it's got to go back next year :(
 
Showboat said:
So the pension reduced by £121, i'll need to look into the impact of that. Thanks!
And it's 12,000 annual mileage.. heart skipped a beat when you mentioned that so appreciate it!
Click to expand...

I don't work in the NHS, but I'll have a stab of explaining it. Public sector pensions are usually defined benefit, based on your career average salary. The amount you pay each month actually isn't actually what goes into your 'pension pot' (you don't have a traditional pension pot).

You pay X% (6-9%) contribution per month and then at the end of the year your total pensionable earnings are multiplied by a fraction (usually 1/43 or about 2.3%) and that is your annual pension when you retire. You build that number cumulatively each year, the pension amount is indexed (RPI I think) so it also raises each year with inflation.

e.g. if you earn 30k for 30 years you'll get a pension which is roughly £21k (assuming no inflation)

So in your example, if your wife's salary is reduced by £899.07 per month.

That means, her salary is reduced by £10,788.84 per year, multiple that by 1/43 which equates to around £251 down per year, or £753 for the period of the agreement.

£753 doesn't sound like a lot but that's how much less PER YEAR her pension will be once she is drawing it down. Say she lives for 15 years, that's over £11k in todays money (the numbers are based on there being zero inflation).

If she is on a fairly average salary, that is suddenly a lot of pension to be missing out on, however she may well be a consultant and approaching the lifetime allowance and if that's the case its a very different conversation. If you have a good pension scheme, salary sacrifice is a mega cost saving for the employer.

EDIT: I should add that you'll need to check the numbers against the scheme which she is in, they may be different.
 
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This is a good deal - the same car on my salary sacrifice scheme is £900 per month, with everything you mentioned.
 
Likewise, same car is vastly more expensive on our scheme with the same mileage etc.

Ours is non pensionable so you would need to add the £121 back on (which is ultimately good), but it still doesn't get close to getting you into that car.

£500/month on ours for 12k pa will barely get you into the base model, 160kw EV6
 
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can't you make voluntary pension contributions to offset the £121 , when topic came up here last time - pisonheads had a good thread.

Isn't the IX a behemoth too ? no sign of the iX1 bev on the list - just watched AG review.
 
jpaul said:
can't you make voluntary pension contributions to offset the £121 , when topic came up here last time - pisonheads had a good thread.
Click to expand...

It’s a defined benefit pension, it works very differently to a ‘normal’ pension. Your contributions do not directly related to what you get and there are pretty ridged rules around what you can and can’t do within the schemes.
 
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eg. https://chasedeveremedical.co.uk/can-i-pay-more-into-my-nhs-pension-scheme/

  • Additional pension purchase.​

    Within the pension scheme, medical professionals can buy additional annual pension benefit in set £250 amounts.
The cost, which is determined by the scheme actuary, depends on your age and can be paid with a lump-sum or over a fixed-term of between one and 20 years.

This option is available across all three sections of the NHS pension scheme:

  • 1995 and 2008 section – maximum of £5,000 of guaranteed index linked pension available, with or without dependants’ pensions.
  • The 2015 Scheme – the same as above, but to a maximum of £6,500
 
chroniclard said:
Would you voluntarily want to be seen in an IX is the burning question? :eek:
Click to expand...
I had a look around an iX last weekend and I actually like the looks. The side on view is probably the worst.
My issue is the battery size and therefore range, isn’t enough for the price bracket. It’s a little less than my Polestar 2, which for nearly double the price makes it a no go.
 
The problem with the iX 40 is the same as the fat Audi eTron - range for the 'base' battery is not good enough for a large, luxury SUV. It would have to be the 50 version for me and that costs many roubles more!

I had a good look around one and it is an unusual car. I felt that it was very 'designed', but, typically for large German SUV's the practicality for a family is somewhat lacking (IMHO). It sort of felt very 'fat' inside, lots of padded surfaces and really thick doors for no apparent reason. Don't get me wrong, if I could change to a full EV (not yet as I need 7 seats, waiting for new Kia EV9), then I would have one as long as I could afford the 50 version. My wife's ID3 does around 215 miles in summer and perhaps 180 in winter and that would be slightly annoying for our main family vehicle.

I would say that it would be a fantastic car but be aware that we don't really yet have real world 40 version winter driving range results yet.
 
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