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£11,000 tax saving helps drive Volvo XC90 hybrid attraction to SMEs

Volvo XC90 T8 dynamic
Tax-saver - the all-new XC90 T8

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9 February 2016

The Volvo XC90 hybrid tax savings

  • Personal taxation at just over £100 a month or £1,208 a year is a key driver
  • Tax-dodging Volvo is a twin engine plug-in hybrid electric vehicle (PHEV)
  • 49g/km CO2 so that it carries just 5% benefit in kind (BIK) rate for £3,208 a year
  • Still got loads of style, practicality, luxury, comfort, versatility and flexibility

A TAX-SAVING of more than £11,000 is a bold claim by any manufacturer.

So Business Car Manager spoke to Selwyn Cooper, Volvo’s head of business sales, to find out the sales strategy to SMEs for the new Volvo XC90 T8 Twin Engine hybrid.

First, though, a bit about the car.

This tax-dodging Volvo is a twin engine plug-in hybrid electric vehicle (PHEV) with just 49g/km CO2 so that it carries just 5% benefit in kind (BIK) rate for £3,208 a year tax against the 152g/km CO2 of the D5 diesel version that’s rated at 28% BIK for £14,120 tax calculation.

How can you run a Volvo XC90 T8 on the business and pay virtually no tax?

“Our experience to date has seen a surprisingly high uptake of PHEV orders in the business community. The large take up of PHEV orders, has been driven by business people taking a car through the company leading to a number of implications from a tax perspective.

Selwyn Cooper Volvo
Selwyn Cooper

“If we look at Benefit in Kind (BIK) which actually drives the driver’s choice more often than not, the personal taxation on the Volvo XC90 T8 Twin Engine is £1,208 in 2015/16, which at just over £100 a month is exceptionally strong value in terms of a benefit in kind calculation.

“Speaking to people at shows, that’s clearly been a significant driver for the generation of interest in the car.

“As well as this It has got style, practicality, luxury, comfort versatility and flexibility I think modern people want out of a car – all the things that tick a box for business users.”

We know the Government Plug-in grant isn’t going to be around forever, with the entry-level Momentum the only one to qualify – do you think this will make a difference to Volvo XC90 T8 take up?

The all-new XC90 T8
Plug-in charge for the all-new XC90 T8

“It will depend on the client and what’s driving the decision. If the decision is being driven by a capital amount – how much it’s going to cost, there will be a consideration. But £5,000 on a £60,000+ car, relatively speaking, is a small percentage.

“I think in the SME sector, if the buyer can afford £57,500, they can afford that £5,000 gap. I don’t think there will be a major impact, particularly when you work out what’s it’s going to cost them personally – because that doesn’t change whatever spec you go for  – that’s not influenced.

 Can you give us a breakdown of what spec Volvo XC90 SME buyers are choosing then?

“It is:

  • 38% Inscription,
  • 42% Momentum and
  • 20% R-Design.

“The level of Inscription took us by surprise; the take-up was higher than we anticipated.

 

“Of the 40,000 delivered, the engine split so far is:

  • 82% D5 (diesel),
  • 5% T6 (petrol) and
  • 13% T8 (hybrid).”

Have you learnt anything from Volvo’s first plug-in hybrid, the V60 when it comes to marketing the XC90 T8 to the SME?

Yes, absolutely key is that a detailed presentation has to be done with these cars. If you don’t do that, they don’t get the value and see the benefit of the technology. Plus, what it can do for them – that has been absolutely fundamental. That was the real lesson learnt from the V60 hybrid.

Do you have any idea of contract hire figures for this car?

“A T8 Momentum on a three-year contract will be around £590 per month.”

Inscription has been the top trim for SME buyers. I have sold one for over £80,000! – Selwyn Cooper

Can you give us any idea of pre-orders from SMEs for the Volvo XC90 T8?

“Inscription has been the top trim for SME buyers. I have sold one for over £80,000, which is the dearest car we’ve ever sold; it was an Inscription with every option ticked. I think the total was over £86,000!

“Typically, early-adopter clients have been people with an environmental interest. Early buyers have been businesses with the environment or sustainability as part of their core values – it’s a natural fit.”

The all-new XC90 T8
Luxurious interior of the all-new Volvo XC90 T8

 

 

 

 

 

 

 

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