Latest Business Car Manager News: Yaris Hybrid Road Test: all the Tax Benefits for the Price of a Fiesta

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With the incredibly low company car tax band and attractive entry fee, the new Yaris hybrid will provide effective savings for business car owners. New review from Business Car Manager, more details follow.

The hybrid at home. If your company car spends it's time in town, the Yaris has to be on the list

Toyota Yaris Hybrid 1.5 VVT-i T3 CVT

What is it?

TOYOTA pioneered the petrol-electric hybrid and has sold more than 2.5m since the first Prius models reached Japanese customers back in 1997.

With the exception of Honda, most rivals have been slow or reluctant to follow the trend; even so, cumulative global sales of all hybrids have been edging towards the 5m mark.

Now, with its first, Ford Fiesta-sized Yaris Hybrid supermini already flowing out of showrooms, Toyota is accelerating the pace.

The £14,995 starting price for the base T3 model, rising to £16,995 for the well-equipped, range-topping Spirit, has dropped the hybrid to a new level of affordability, some £2,000 below the entry level Honda Insight, itself seen hitherto as the first “affordable” hybrid on the market.

But it is the Yaris’s other financial credentials which make it a force to be reckoned with by more conventional rivals, against which it is competitively priced.

The CO2 emissions of the cheapest T3 model are just 79g/km. For business users that puts it in the 10 per cent company car tax band, still shifting to only 11 per cent in for 2014/15 – so company car tax is stable.

In other words, the business user can wind up paying as little as £25.25 a month. That low CO2 rating also qualifies it for zero VED, congestion charge exemption and – so welcome to employers – 100 per cent first year writing down allowance.

The EU fuel economy figures are also pretty startling: 80.7mpg combined for the cheapest, lightest T3 version.

The Yaris Hybrid’s drivetrain is complex, combining an updated 1.5 litre petrol engine and downsized battery and electric motor system, plus continuously variable transmission from the Prius. To reassure business users and SME business car buyers, however, the hybrid Yaris comes with an eight-year, 100,000-mile warranty on the battery pack and five-year, 100,000 warranty on the rest of the car.

What’s hot?

•Business user costs don’t come lower...
•...for employer and company car driver
•A new low for hybrid pricing
•Over 80mpg potential
•Reassuring warranty despite complexity
•Good interior space
•Pleasant looks
•Toyota build quality

What's not

•Not as economical as figures suggest on open highway
•Ride, handling, steering uninspiring

Business Car Manager road test verdict

This is one of a handful of cars where the most appropriate question for a truly cost-conscious company car driver is not “why should I buy it?” but “how can I justify not buying it?”.

Admittedly, for the enthusiastic driver, the Ford Fiesta-sized Yaris Hybrid lacks emotional appeal or sheer driving pleasure. It looks smart enough. The interior is well planned and surprisingly roomy (Toyota deserves a pat on the back for not noticeably compromising interior space with the hybrid battery pack). Materials quality is high and the cars are well put together by Toyota’s Valenciennes plant in France.

The Toyota Yaris Hybrid is also relatively refined for a small car, with mechanical noise well suppressed. But straight line performance is best described as leisurely; ride and handling are undistinguished; and the extra weight of the twin drive systems (engine and battery) has induced a certain vagueness to the steering.

And while city driving, with battery-only operation in frequent use, should see up to 70mpg fuel consumption, in higher speed, open road driving with petrol engine and battery pack working necessarily in parallel, BCM’s assessment is that the average driver is likely to fall up to 20mpg short of the “official” 80.7mpg EU combined cycle economy of the base Yaris T3 hybrid, or the 76.3mpg of the range-topping Spirit version.

For truly cost-conscious, efficiency-seeking, pragmatic company car drivers as well as their employers, however, the financial pros will far outweigh the dynamic cons, minor fuel consumption reservations regardless.

At an on-the road starting price of £14,995 – no more than a reasonably specified Fiesta and £2,000 less than Honda’s Insight Hybrid – Toyota is making the benefits of a hybrid available to almost all.

And, as already set out above, the financial benefits are considerable: minimal company car tax, zero VED, nose-thumbing to London’s congestion charge and, for the employer, 100 per cent first year writing down allowances if they buy - all thanks to the Yaris Hybrid’s miserly 79g/km CO2 emissions.

If there’s a chink in the Toyota Yaris Hybrid’s financial armoury, it’s the need to improve the business car lease rates against Fiesta rivals in the open contract hire market. In a business car comparison, a similarly priced 100PS Fiesta EcoBoost costs from £189 a month to lease compared to the Yaris Hybrid’s from £212.

For significantly more competitive business car lease rates, though, head to Toyota dealers where you’ll find the Yaris Hybrid from £184 a month.

Jon Williams, Toyota GB’s president and MD, suggests that, with the Prius plug-in range extender Hybrid having also just joined the company’s hybrid line-up of Auris, Prius and Yaris (with another model to come), hybrids will become an ever more major force in the company’s sales line-up and that the Yaris Hybrid will account for at least 20 per cent of all Yaris sales in 2013/14.

While much of Toyota’s business has been retail, he says he sees no reason why a 40 per cent business user share should not be achievable and promises a “harder push” towards company car and business car leasing opportunities.

With its company car tax appeal, we would tend to agree with that assessment.

It’s early days yet for the Toyota Yaris Hybrid. But with the chill winds of recession set to blow for some time to come, cold financial calculation suggests that the innovative supermini may well find itself pushing at some already wide open SME doors.

Toyota Yaris Hybrid 1.5 VVT-i T3 CVT – the low down

P11D Value    £ 15,140
Monthly business rental (ex VAT)    From £212 a month (3yrs/30,000 miles)
Company car tax bands 2012/13 to 2014/15    10%, 10%, 11%
BIK tax    £1,514, £1,514, £1,665
Engine    1.5-litre four-cylinder petrol/electric motor with nickel hydride battery pack
CO2    79g/km
Power/torque    100bhp/ 132Nm
0-62mph    11.8 seconds/103mph
Economy    80.7mpg

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Conrad Swailes
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