Company cars - Worth it?

NeilFawcett said:
I'm comparing like for like in virtually all areas, except for a license plate in reality :)
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Aye but the licence plate is the key ;)

You seriously cannot compare the costs of running a 6 year old car to a brand new car. (forget if its a company vehicle or a private one)

By your own admission your happy with a 5 year old car, so you have already proved to yourself that a brand new car isn't something you would normally entertain, hence its unlikely you would value the "benefit" of a new shiny plate vehicle vs an old one.

If your personal choice was to run a 1-4 year old car the numbers may be much closer but the fact your running an older one means the New Smax vs a 5 year old Smax is about as relevant as comparing the new Smax to a 10 year old 911 when deciding which one is cheaper to run.

If you really want to see the impacts of the supply difference you have to compare like with like, buying (and selling) insuring, ensuring equal provision of services etc the same cars via the two means.

Most people completely forget you may have to supply another vehicle yourself (ie rent one) should you take car allowance and for some reason your car be off the road for a while. Its always easy to overly simplify these things, if you were a rep on the road daily and someone crashes into your car causing significant damage would you expect your employer to suddenly stump up a rental car? If you have a fully expensed company car then they would, they need to supply the tool for you to undertake your duties, if you have opted out of this benefit and supply your own instead you may well need to provide your own. The difference mainly comes down to is it a perk car or a genuine tool of trade however.
(I've seen this happen to someone who opted out of a company car who then had an uninsured cause significant damage, their car took a fortnight to be fixed (garages were busy it was a few years ago in the last silly snow season) and they had to hire a car for that period as their employer rightly told them if they were not working as normal they could take holiday or unpaid leave)
 
robskinner said:
but the fact your running an older one means the New Smax vs a 5 year old Smax is about as relevant as comparing the new Smax to a 10 year old 911 when deciding which one is cheaper to run.
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But in my case, it's absolutely relevant, as I see no real difference between a 5mth old SMax and a 5yr old SMax. The older one might have a few niggles due to age, but I'm sure the £2-3k a years saved (in my case) can more than make up for that! :)

If the difference was in the hundreds of pounds I'd be interested, but when it's £2-3,000, it makes no sense for me...

I could spend £1000 a year on problems (which of course is hugely unlikely) and still be around £2000 a year better off!
 
Company car seems much more of a no brainer if you're on a lower income, the numbers just don't add up anymore once you hit the 40% band. Car is costing me all of £55 a month plus diesel and I get to drive it with no mechanical sympathy without worrying...
 
mnet674 said:
Company car seems much more of a no brainer if you're on a lower income, the numbers just don't add up anymore once you hit the 40% band. Car is costing me all of £55 a month plus diesel and I get to drive it with no mechanical sympathy without worrying...
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In your case is it just the tax? ie: If you didn't have the company car, would you not get a car allowance to your salary?
 
So if, say, BMW wanted to be more tax efficient, they could launch a range of their new 'employee-exclusive' 5-series with some minor styling differences, only available as company cars, for a couple of grand? :p
 
NeilFawcett said:
In your case is it just the tax? ie: If you didn't have the company car, would you not get a car allowance to your salary?
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I'd say this plays a big part in the decision.

Generally there are a few categories of people when it comes to company cars, some people aren't given the option of an allowance, some people when they sacrifice their allowance it's the whole lot gets taken, or some people get to choose how much it costs them based on their choice of car (and whether they want to personally contribute anything extra).

Personally as much as I'd love a new fully maintained car it makes no sense for me to take up a company lease. The lease costs on offer aren't great, the tax is a killer, plus I lose out on the tax relief on mileage (as my co pay below the HMRC guideline rates).

Add to that it's more of a perk for me rather than job requirement. I don't really need a car for work, if I didn't drive it the company would be paying my train fare anyway so to be about £550/£600 worse off a month all for a 320d M sport or similar isn't worth it for me.
 
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NeilFawcett said:
But in my case, it's absolutely relevant, as I see no real difference between a 5mth old SMax and a 5yr old SMax. The older one might have a few niggles due to age, but I'm sure the £2-3k a years saved (in my case) can more than make up for that! :)

If the difference was in the hundreds of pounds I'd be interested, but when it's £2-3,000, it makes no sense for me...

I could spend £1000 a year on problems (which of course is hugely unlikely) and still be around £2000 a year better off!
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Ok ok i get it, you just dont get it.

Comparing an OLD car with a new car is invalid. It makes NO difference on the funding method.

The old car (barring it being silly old) will always be cheaper to run, the depreciation on a brand new Smax would probably be 4k a year for the first couple. Most fords have a residual of about 50-55% at 3 years old that why they are cheap when comparing to a NEW one because the heavy depreciation hit has already happened. Most cars lose similar apart from some of the BMWs etc which tend to lose a little less.
If you ever look at lease cost tables you would be stunned at how some of the fords and vauxhalls etc cost the same to lease as BMWs, Audis mercs, because the depreciation is so much better, and I mean for basically competing models.
 
Not sure if this will work as a link but for the Smax its even worse than I thought, assuming whatcar have a clue ;)

http://www.whatcar.com/car-deprecia...?makeId=1&modelVersionId=1987&editionId=33442

Your motoring on the cheap by running a car of that age, assuming its mechanically sound of course. Expecting a brand new car to be able to be run for a few hundred difference to a 5year+ car just isn't realistic.
Company cars are not a massive perk anymore, but they are still a good perk for a lot of people but as ever personal circumstances dictate, assuming you compare like with like, or reasonably like with like as Fox suggested with a nearly new GTi etc
 
robskinner said:
Ok ok i get it, you just dont get it.

Comparing an OLD car with a new car is invalid. It makes NO difference on the funding method.
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But my entire angle has nothing to do with new or old car. I was simply exploring two different methods of owning the same car. I am comparing owning a SMax to do a job - I don't care if it's 1 day old or 10yrs old. Just as long as it's reliable and cost effective.

If the company car scheme allowed me to achieve that, great. But clearly it does not.

For some individuals on this thread - who do not lose a car allowance - it is an absolute no brainer to get a company far. But in my case, losing over £5k from my take home means it's an absolute no go...

If (like those other individuals) I didn't lose a car allowance, I'd most likely take the company car as the cost would be about the same...
 
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robskinner said:
Not sure if this will work as a link but for the Smax its even worse than I thought, assuming whatcar have a clue ;)

http://www.whatcar.com/car-deprecia...?makeId=1&modelVersionId=1987&editionId=33442

Your motoring on the cheap by running a car of that age, assuming its mechanically sound of course. Expecting a brand new car to be able to be run for a few hundred difference to a 5year+ car just isn't realistic.
Company cars are not a massive perk anymore, but they are still a good perk for a lot of people but as ever personal circumstances dictate, assuming you compare like with like, or reasonably like with like as Fox suggested with a nearly new GTi etc
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Not sure what you're pointing at.

If I buy a 4yrs old SMax (again) for say about £11k, then every year over the course of say 5yrs it will most likely lose about £1200 in value. Add to this repairs, insurance, MOT, wear and tear etc, we could probably say it will cost on average about £2k-2.5K a year...

After 5yrs, I go out and buy another SMax for 11K again etc etc...

The company car option will cost me £5.5k a year... The only difference is it's license plate as far as I'm concerned... That's £2-3k a year worse off...
 
But that's because when you get a company car, you're not getting a 4 year old one..

This is what you don't seem to be grasping.

Yes, there is no point doing so in your situation, because you simply don't care if it's a new car or not. It will be a new car via lease, whereas it won't be if you buy it yourself, so you're not comparing like for like.

Just accept it's not for you and move on :p
 
I've had company cars for the last 6 years, no option of allowance. To me that makes it a no brainier, new car every 3 years, no maintenance costs, insurance of anything. I clipped my wing mirror and chipped a front fog over Christmas; free to fix.

All the talk of a bluemotion golf costing £3k is ridiculous though - it's nearer £600 p.a.

For working on a comparison you also need to consider the company reimbursing you for allowance you don't spend.

I get £550 a month lease allowance (I have to use the lease company stipulated by my company, and I cannot have the cash). I pay tax on the value/emissions of the car, and max my allowance.

However, if I didn't, and only spent £250 on a fiesta or sommat I'd get the remainder (or a proportion) paid into my salary - so this should be considered in any calc FOR the company car too.
 
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Pug said:
I get £550 a month lease allowance (I have to use the lease company stipulated by my company, and I cannot have the cash). I pay tax on the value/emissions of the car, and max my allowance.

However, if I didn't, and only spent £250 on a fiesta or sommat I'd get the remainder (or a proportion) paid into my salary - so this should be considered in any calc FOR the company car too.
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Does not compute.
 
miniyazz said:
But that's because when you get a company car, you're not getting a 4 year old one..

This is what you don't seem to be grasping.

Yes, there is no point doing so in your situation, because you simply don't care if it's a new car or not. It will be a new car via lease, whereas it won't be if you buy it yourself, so you're not comparing like for like.

Just accept it's not for you and move on :p
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Three scenarios:-
1) Take a company car and ONLY pay tax - as per some other posters in this thread.
2) Take a company car and pay tax and unfortunately lose £1k of (hyperthetical) car benefit.
3) Take a company car and pay tax and unfortunately lose over £5k of car benefit.

(1) and (2) appeal to me... (3) doesn't appeal to me.

Each is a realistic scenario, but (3) simply isn't worth it to me.

I'm sure to some folk who need the nice numbers and letters on their license plate (a newer car), something akin to (3) might be appealing. To me it means absolutely nothing... Would be nice, but that's about as important it get to me. A 5yr old car is the same as a 5month old car to me.

The thread is about my company car options, and my value set. Can you grasp that? So indeed, let's move on...
 
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Pug said:
I've had company cars for the last 6 years, no option of allowance. To me that makes it a no brainier, new car every 3 years, no maintenance costs, insurance of anything. I clipped my wing mirror and chipped a front fog over Christmas; free to fix.
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If zero allowance is offered, then it is a no brainer. I agree.

But in the overwhelming majority of cases, an allowance IS offered therefore the opportunity cost of not taking it MUST be factored into any calculations about which is the correct option.

It is generally the opportunity cost of the car allowance that makes up the bulk of the cost of a company car, not the tax element of the car.
 
NeilFawcett said:
Three scenarios:-
1) Take a company car and ONLY pay tax - as per some other posters in this thread.
2) Take a company car and pay tax and unfortunately lose £1k of (hyperthetical) car benefit.
3) Take a company car and pay tax and unfortunately lose over £5k of car benefit.

(1) and (2) appeal to me... (3) doesn't appeal to me.

Each is a realistic scenario, but (3) simply isn't worth it to me.

I'm sure to some folk who need the nice numbers and letters on their license plate (a newer car), something akin to (3) might be appealing. To me it means absolutely nothing... Would be nice, but that's about as important it get to me. A 5yr old car is the same as a 5month old car to me.

The thread is about my company car options, and my value set. Can you grasp that? So indeed, let's move on...
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That's what I said? It doesn't make any financial sense for you because you aren't buying a new car with your allowance, so don't get a company car :confused::confused:
 
I'm surprised that more people don't go for a commercial vehicle. Personally I would opt for a Mitsubishi l200 with all the luxuries and then pay ~£1100 per year for bik and fuel card tax.
 
But then you have to drive around in... a commercial vehicle which understandably many people don't want to do? Hence why not many do it.
 
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