Business Car or Car Allowance

Casdawer

Casdawer

Casdawer

Soldato
Joined
14 May 2009
Posts
4,299
Location
Hampshire
Hello all,

I'll be starting a new job in the beginning of December and I have a choice of a company car OR car allowance (£340 - Tax).

I also have an issue where I signed up to a lease deal with a Citroen garage for a C1 back in March (it was cheap OK!) and I'll need to find someway to hand this back (I know I will most likely incur a cost)

I have a few questions for you guys:

  1. Do I go for the Business Car or the car allowance?
  2. What cars would you suggest?
 
Cars to suggest? Well, what are your requirements? Do you need to carry big loads so might need an estate? How many miles are you doing for diesel v petrol? Do you want to spend more or less than your allowance?
 
#Chri5# said:
Cars to suggest? Well, what are your requirements?
It needs to comfortable (for when I'm stuck in traffic) and has to be an automatic. Bluetooth is needed as well as a Sat-Nav.

Do you need to carry big loads so might need an estate?
With a baby planned in the next year or so, it'll need to be able to carry baby stuff but most importantly it'll need to carry golf clubs for those very important meetings.

How many miles are you doing for diesel v petrol?
Round trip of 50 miles per day on A27/M27 but may be occasional travel abroad for work.

Do you want to spend more or less than your allowance?
I'm happy to add an extra £100 on top of what I'll get as I'm paying £135 for my C1.
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I have a car allowance and fuel card. The car allowance is taxed as income.

The fuel card total fuel purchased each year and other benefits are deducted from my tax allowance. I do a tax return each year to claim back my company mileage. This basically cancels out the fuel and other benefits deductions. This only works if your business mileage is greater than your personal mileage by a large enough amount.

Then you have to add on costs of ownership such as business use car insurance, warranty, road tax, servicing, tyres, car loan etc. By buying low mileage cars that are 2-3 years old the significant depreciation is gone. After about three years I then fully own the car and trade it in against a replacement. In my case this roughly breaks even excluding the value of the car.

You need to work out which method suits your actual needs and finances best.
 
PCP and lease you can hand back once you have paid half the amount due.
Easy to calculate on a lease, but PCP it includes the residual so you need to be very close to the end in most cases and its possible to not even pay half within the PCP term (look at a decent TT, residuals so high the balloon basically can be 50%)

But you can pay off a PCP early, so its worth asking garages to see if they will help out, if it was a new C1 expect some real pain
 
Mercenary Keyboard Warrior said:
PCP and lease you can hand back once you have paid half the amount due.
Easy to calculate on a lease, but PCP it includes the residual so you need to be very close to the end in most cases and its possible to not even pay half within the PCP term (look at a decent TT, residuals so high the balloon basically can be 50%)

But you can pay off a PCP early, so its worth asking garages to see if they will help out, if it was a new C1 expect some real pain
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You definitely cannot do that on a lease. If you want to hand the car back early it'll depend on what the finance company charges. VWFS is 55% of the remaining payments, for example. I'd expect others to be around the same.
 
Casdawer said:
Hello all,

I'll be starting a new job in the beginning of December and I have a choice of a company car OR car allowance (£340 - Tax).

I also have an issue where I signed up to a lease deal with a Citroen garage for a C1 back in March (it was cheap OK!) and I'll need to find someway to hand this back (I know I will most likely incur a cost)

I have a few questions for you guys:

  1. Do I go for the Business Car or the car allowance?
  2. What cars would you suggest?
Click to expand...

So you already have a car which you are tied into in a lease deal. Why not just take the car allowance and keep your lease?
 
mmcg1 said:
You definitely cannot do that on a lease. If you want to hand the car back early it'll depend on what the finance company charges. VWFS is 55% of the remaining payments, for example. I'd expect others to be around the same.
Click to expand...

If its a true lease yes, but most people say this and they are in fact on an HP agreement or PCP deal so they are covered.
But granted yes if hes truly on a lease then hes pretty screwed and I think 55% is quite a reasonable assumption.

This is quite a good site for these types of thing

http://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/
 
Rotty said:
just to add, a lot of company car schemes have no option for an auto unless its for disability reasons
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And some have quite strict rules around number of doors, age of car, soft top etc

Worth looking at the fuel issue, does it come with a card, in either case
Then you need to understand the rules does it cover private etc

Agree with Rotty that 340 is low to start with so the company car looks more appealing in these situations for the risk free motoring.
Its probably something horrible though with that kind of car allowance, could even be an astra **shudder** ;)
 
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