Company car or car allowance?

craptakular

craptakular

craptakular

Soldato
Joined
7 Jan 2007
Posts
10,607
Location
Sussex, UK
If you had a choice of a company car or a car allowance which is best?

Company car would be a Focus Zetec or Titanium I think.

Car allowance would be £5.5k per year.

I'm leaning towards the company car as I wouldn't have to worry about insurance, maintenance, tyres etc etc, also I would then get a parking permit at HQ.

However, the car allowance would boost my salary, this would be advantageous when I look at a mortgage in 18months time.
 
It will be at 40% doing around 12-15k a business miles a year. I don't care about speed or as I want economy. Where I live you can't speed because of all the traffic jams and speed cameras or poor country roads.
 
I'd say its borderline personally, but you need to do a quick spreadsheet with some costs.

ie, the company car, the tax for it on one side
other side needs the cash in hand, the ppm, the tax reclaim you can do each year and of course the costs to run a car that suits inc tyres/insurance etc

I think what you are getting isnt bad but it comes down to what you would want if you chose your own car. If you chose something older then you could make a little money but you might not want the hassle.

The company may have rules on the age and type of car you choose.


Long story short, do a simple spreadsheet :)
 
How old can the car be? If there are no car limitations then its an absolute no brainer to take the 5.5k in my opinion. You clearly dont care much about the actual car, so just buy yourself some cheap Focus or whatever and pocket the money going forward. 18ppm will fuel most smaller engined cars easily.
 
Its £269/month roughly

You'll get some ppm back from the mileage rate and a little tax on the difference too to help. Its not that much though in my opinion.
 
Currently I have a 62 plat 1.4 Polo, its fine, but I have put around 4,000 business miles on it in 3 months.

Its difficult, if I go car allowance is it usually just bolted on to your salary? Would that mean more student loan and pension contributions?
 
If you want no hassle and something new then the company car is the way to go

If you are fine with something a little older but a bit of risk on running costs then the payment can work, plus a good chance of a little money left over

If you already have a car, it might be worth just keeping that and banking the cash though.. as youve sunk the money into that already anyway
 
Axeboy said:
Its £269/month roughly

You'll get some ppm back from the mileage rate and a little tax on the difference too to help. Its not that much though in my opinion.
Click to expand...

Its more than that real world though, as he should also count the tax that would otherwise have been deducted (if taking a co car)
 
If the car allowance has no silly restrictions, take the money.

Especially if you already have a car that's perfectly up to the job.
 
Thats the only problem with the company car, tax out of my salary...

It might be better for me to the car allowance then.

I borrowed some money from my parents for the car and havent started paying it back yet, so the car allowance would mean I could pay them back in less than 18 months.

I get cheap MOT, tyres and stuff through my Dad.
 
Work it out on a spreadsheet mate, wont take long

As you have a car already thats suitable, just stick with it and take the money.. thats what it now feels like, but do the sums :)
 
You must log in or register to reply here.
Back
Top Bottom