Company car drivers care about one thing above all else: a low monthly tax bill. Picking the most frugal diesel saloons has its compromises though; often these cars are poorly equipped and don’t look the part.
There is an alternative, though. The Mercedes-Benz C300 Bluetec Hybrid’s CO2 emissions are as low as 94g/km, so it’ll cost you less per month in company car tax than any other rival. It also comes loaded with kit in range-topping AMG Line trim.
We are testing it against the petrol hybrid Lexus IS, a car that has long had low company car tax bills and good fuel economy as its main selling points.
What are they like to drive?
Inevitably, the focus these two models place on fuel efficiency results in sacrifices in other areas, but in the Mercedes, performance isn’t one of them.
It is significantly faster than the Lexus away from the line, and quicker by more than a second when accelerating from 30-70mph.
The sheer amount of shove produced by the Merc’s punchy 2.1-litre diesel engine makes it feel more relaxed getting up to speed on the motorway, or up a steep incline, whereas the Lexus starts to feel strained when you try to hurry it along.
There is a downside, though; as with other C-Class models, engine refinement is poor, with an agricultural clatter under even gentle acceleration. The transition from electric to diesel isn’t as smooth or seamless as it is in the petrol Lexus, either.
The Lexus also spends a lot more time than the Mercedes running in pure electric mode, often letting you pootle along in near-silence in town. In the C-Class, this only occurs if you activate ‘Eco’ driving mode, one of four that can be selected. Even in this setting, though, if you push the throttle too hard the diesel engine will stir in to life.
At higher speed, neither saloon is very hushed. The Lexus generates a fair bit of road and suspension noise at a 70mph cruise. There’s even more road noise in the Mercedes, and wind noise from its windscreen and door mirrors is intrusive.
Neither of these cars rides or handles as sharply as the best execs, either, with both feeling unsettled and jittery on scruffier urban roads. This range-topping AMG Line Mercedes has stiffer suspension than you get with other trims, and combined with the big alloys, this means you get the occasional nasty thud up into the cabin.
The Lexus has the softer and slightly more forgiving ride over sharp-edged bumps and potholes, but its body leans over in corners where the Mercedes stays more upright. Slower steering also makes the Lexus feel cumbersome when you’re on a twisty road. The Merc’s steering is usefully faster, even though it doesn’t give you a huge amount of feedback.
Regenerative brakes – which harvest energy for the batteries – mean it is hard to predict how much force you need to apply to come to a stop in either car, but the Lexus has a particularly dead middle pedal, with a lot of travel before the brakes finally bite.
What are they like inside?
Even the lowliest sales rep will feel like a managing director once they are behind the wheel of either of these cars.
The Lexus is incredibly well equipped so there’s no need to add any optional extras. Premier trim includes fully electric, heated and cooled seats for the driver and passenger, leather upholstery, sat-nav, dual-zone climate control, a colour reversing camera, plus a thumping 15-speaker Mark Levinson stereo system, with a DVD player and 7.0-inch screen. Try speccing up, say, a BMW 3 Series to that level and you’ll be spending a huge amount more in company car tax every month.
Surprisingly, the Mercedes is almost as well equipped, although if you want real leather instead of artificial hide you’ll have to fork out another £795. The standard Garmin Map Pilot sat-nav is rather clunky, so to match the infotainment system in the Lexus you’ll also need to pay £1495 to upgrade to Comand.
It’s worth noting that neither system is as intuitive as BMW’s iDrive, although the scroll wheel in the Mercedes is less of a chore to use than the mousepad-style controller in the Lexus.
The Lexus also trails the Merc when it comes to cabin design. In the IS, the bulkhead and foot-operated handbrake intrude where the clutch rest should be, although the pedals line up with the steering wheel better than the Merc’s.
In the back, both saloons offer decent leg- and shoulder-room, but the Mercedes has more headroom. By contrast, if tall passengers sit up straight in the Lexus, they’ll find their heads touching an annoying bump in the rooflining.
Steeply angled doors and high sills also give the Lexus poorer rear access, too. It fights back with a boot that’s longer, wider and deeper than the Mercedes’, albeit still a rather awkward shape.
The Mercedes allows you to drop the rear seats by pulling convenient handles in the boot compartment, but it’s a shame the seats don’t lie completely flat.
What will they cost?
Forget the high list prices, because neither of these cars makes any sense as a private buy. Although the Lexus and the Mercedes are both available with decent discounts, which reduce their prices by several thousand pounds, both have weaker resale values than lesser models in their respective ranges, and will be seriously expensive if you try to buy them on PCP finance.
As company cars, however, they stack up better. The Mercedes is not subject to the same 3% benefit-in-kind tax penalty as other diesel saloons, because it’s a hybrid. On 16-inch alloys it emits just 94g/km; even on the 18-inch wheels of this AMG Line model, that figure rises to just 99g/km, so it slots into the 12% tax band until 2015.
The company car tax rules are due to change in the next two years, but the Mercedes should still work out much cheaper over a three-year period than even the most efficient BMW 3 Series.
Sadly, the Lexus can’t compete with the Mercedes. There is a 99g/km version, but the extra weight of the Premier model means it emits 109g/km of CO2, so will cost you more per month than the Mercedes.
You’ll pay more to insure and service the C-Class over three years, although both the Merc and Lexus offer an all-inclusive servicing pack that covers all parts, labour and costs, split into a manageable monthly payment.
Our True MPG tests confirmed that the Lexus is more fuel efficient in the real world because it averaged close to 60mpg, narrowly beating the Mercedes. It also uses petrol, which is cheaper than diesel, so will cost you less to fuel over three years.
That said, if your commute involves lots of motorway miles, the C-Class is likely to prove to be the more economical choice.
These two cars are very closely matched, yet despite its massive kit list and more refined drivetrain, the Lexus finishes runner-up. It’s more expensive to run as a company car, and isn’t as good to drive or live with. The Mercedes feels more agile than the Lexus, is plusher inside, and is considerably quicker. It’s a very smart company car choice.
**Mercedes-Benz C-Class C300 Bluetec Hybrid AMG Line
For** Strong engine; plush interior; lower monthly tax bills
Against Unsettled ride; wind and engine noise; small boot
Verdict A strong performer with class-best running costs
**Lexus IS300h Premier
For** Generous kit list; low-speed refinement
Against Awkward driving position; slow steering; sluggish performance
Verdict Can’t match the Merc’s costs or pace