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sanity check please - co car vs. car allowance
nick205 - 9/9/10 at 04:21 PM

Following my post about LPG cars I'm still trying to work out which works best for me. If anyone can add some sanity to my calculations I'd appreciate it...

Current co car tax burden = £1,700/yr

Proposed car allowance = £2,900/yr (after tax)

Estimated running costs = £1,100/yr
- 3yr old Octavia TDI
- Business insurance
- Road tax
- Servicing
- MoT
- Tyres
- Slush

Saved co car tax + car allowance – running costs = £3.5k/yr, £7k/2yrs or £10.5/3yrs

Buy a £7k car and run for 3 yrs = £10,300

Pros/Cons…
- Negligible cash flow value, but left with a car of some residual value
- 2nd hand vehicle, but wider personal choice

Risks…
- Change jobs and lose car allowance
- Major repair bill
- ???

Comments and experiences please

stevebubs - 9/9/10 at 04:28 PM

Quick Q? how many miles will you be doing?

If you're a high miler, company car is normally always best...

I've always had my own car, but went company car in my current job as I've done c. 40k miles in the last 15 months.

Now looking to move again and think I'll take the company car as I don't want to splash out just yet...

Alos, what is the company car you're being offered? Is it better/worse than the Octavia?

TimC - 9/9/10 at 04:58 PM

Just don't do what I did and opt-out and then go and buy something specialist (Alpina B10) - it cost me a fortune to keep it A1.

In hindsight I wish I'd taken the company car - next time around I will be.

Guinness - 9/9/10 at 06:02 PM

quote:
Originally posted by TimC
Just don't do what I did and opt-out and then go and buy something specialist (Alpina B10) - it cost me a fortune to keep it A1.

In hindsight I wish I'd taken the company car - next time around I will be.


I opted out of my old firms company car scheme, and bought a BMW540i Touring. Oh what a sensible decision that was, at 20mpg average!!

Now I have a Seat Leon TDi and it's much more beneficial.

Mike

pekwah1 - 9/9/10 at 07:19 PM

well the obvious questions are the initial outlay for buying a car with a car allowance, the maintenance (tax, insurance, mot, repairs, servicing) and depreciation which will be much more with higher mileage.

Company car means you'll pay more tax, but as long as you stick to a co2 friendly diesel mobile (or hybrid) then this will be less. I'll be paying around £56 per month for a bmw 118d. The best thing with a company car is there is no worry about anything. Everything is paid for by the employer bar fuel.

The one major difference for all of this which i don't know much about is when the employer pays your fuel (i pay mine and claim back per mile of company use). I think when this happens, you will end up paying a lot more tax on it.

hope this helps!

nick205 - 9/9/10 at 07:54 PM

quote:
Originally posted by stevebubs
Quick Q? how many miles will you be doing?

If you're a high miler, company car is normally always best...

I've always had my own car, but went company car in my current job as I've done c. 40k miles in the last 15 months.

Now looking to move again and think I'll take the company car as I don't want to splash out just yet...

Alos, what is the company car you're being offered? Is it better/worse than the Octavia?



Good point - forgot to include in my summary above.

I used to average 30k+ a year at which point a co car was the only way. This has now dropped to an average of just under 20k a year. Obviously this will have an impact on resale value, but if I start with something sub 60k and sell at ~120k I'd not be overly concerned.

AndyW - 9/9/10 at 08:12 PM

I do 35k+ and will always go for co car. Easy option and luckily I get a damn good choice. Have an s line a4 at mo

whitestu - 9/9/10 at 08:22 PM

Do you get a 'green' option in your car policy?

I went for a Prius as it actually makes me money in our car policy.

stevebubs - 9/9/10 at 11:03 PM

any restrictions in the company car policy? some don't allow cars over a certain age or mileage - here was 5 years and 100k miles...new place is 8 years/100k miles

stevebubs - 9/9/10 at 11:05 PM

Perhaps more to the point -

1) can you get a car you *want* on the scheme?

e.g. do you *want* the Octavia or is the "sensible" choice?

2) If you decide to move on, would giving the company car back be a problem? e.g. I'm still trying to figure out what to do for transport on the few days I'm going to be without one...

MikeR - 10/9/10 at 05:03 AM

g/f has an alfa company car costing 150 a month in tax and a fuel card costing 120 a month.

We figured out how many personal miles we had to do to break even on the fuel card. Before she met me it was debatable if she did enough personal miles. We now use her car as the standard transport therefore we easily do the mileage. Its also nice going - "hmm, shall we drive to X today" without thinking blooming heck thats going to cost x on fuel.

thefreak - 10/9/10 at 12:53 PM

What's the changeover point between company car and own car with mileage?
Last year I did around 12-13k, this year will be at least that.
Currently I get 30p/m but the 2002 A4 TDI is coming up to 170k and I'm thinking about changing it.
Is it worth me asking the company if they're going to start a car scheme or will it not benefit either of us?

Vindi_andy - 10/9/10 at 01:26 PM

in our company the car must be less than 4 years old.

Not sure about the mileage or anything else cos Im not in the scheme.

[Edited on 10/9/10 by Vindi_andy]

nick205 - 11/9/10 at 09:36 PM

Standard policy is a company provided lease vehicle which you can self select within a budget of £400/month. Has to be 4/5 door, has to be diesel, has to portray the right image.

I've had a Leon Cupra TDI and currently have a Passat Estate and been perfectly happy with both.

The Passat however was chosen in times more plentiful and when I found out children 2 and 3 were on the way - together.

Since then times are leaner and we've changed SWMBOs 306 for an Alhambra.

This leaves me the chance to have a smaller less tax heavy car - e.g. a Golf, which in reality is probably the way I'll go.

However I can't ge away from the thought of taking an allowance and ending up with something tangible at the end rather than just getting clobbered on tax for no net gain.

I'd be more than happy tooling round in a 3, 4, maybe 5 year old Octavia, Golf, A3/4 which could be a higher spec/power model than I'd get on lease.