Company car thoughts

Howard · 18 Jun 2018 at 14:19

Hi guys,

My girlfriend's job requires her to do a lot of driving from site to site. She is, with me in agreement, strongly considering taking her employer up on their company car scheme for the following reasons:

1. Her Toyota Auris is getting on a bit (56 plate, 80k miles), and the maintenance costs are creeping up, as well as the fact the AC system has failed more than once now and this is an essential feature

2. She wants a new car but cannot afford to buy anything better, especially considering we're going to be buying a house soon

3. The money from the sale of the car before it gets totally old and decrepit will be useful in the future and can be put aside

4. Ultimately, she needs a reliable car for work and if the company car fails for whatever reason, it can be made someone else's problem

5. An automatic would be really nice for the amount of driving she does

Here are the details of the company car scheme:

- Seat Leon 5dr 1.6 TDI manual or auto, this is all you get and it's non-negotiable
- Approx £80-90 BIK tax
- Claim 12p/mile for business mileage
- Only the employee is allowed to drive it, non-negotiable

For comparison, a private lease on the same DSG model is approx. £300 per month including VAT, appropriate annual mileage, and a maintenance package. Based on some fag packet calculations, taking into account her rough average monthly current mileage claims (45p/mile) and the actual cost of fuel, I estimate that it'd end up costing at least £100 per month out of her own pocket. And then there's the deposit of course.

If we had more spare cash then I'd normally just spend a few grand on a newer Honda Civic or something, and whilst there are a couple of unfortunate aspects, i.e. the lack of car choice and ability to spec optional extras (like climate control, thanks SEAT for only including this on your top spec models :rolleyes:

), and the inability for me to ever be able to drive it should the need arise, to me it sounds like a no-brainer for a completely hassle-free car "ownership" prospect. It's a shame she'll be losing features from her current Auris like climate control, keyless entry/start etc., but really, to her, "a car's a car".

But there could well be something we're missing, and so I thought I'd make this thread. What do we reckon?

Thanks!

-Ad- · 18 Jun 2018 at 14:47

What would her car allowance work out at (per month after tax)?

Howard · 18 Jun 2018 at 15:08

-Ad- said:
What would her car allowance work out at (per month after tax)?

There isn't one. Either you use your own car and claim 45p per mile, or you have a company car.

rodenal · 18 Jun 2018 at 16:09

The actual mileage that will be claimed is a key aspect of it really, for there to be a circa £100 overall cost I'm assuming she covers less than 10kpa so stays within the 45ppm boundary the whole time (i.e doesn't trip into 25ppm or whatever the revised rate is)?

Whilst it may not work out brilliantly to lease a brand new car using only business mileage recovery rates it's hard to see how it really benefits over keeping the existing car until it dies (in pure financial terms that is).

From a hassle perspective I can sort of get it, but it's only ever come close to working out financially for me on a company car when I was covering nearly 30k miles per annum

Havana_UK · 18 Jun 2018 at 16:30

You can buy a 1-2 year old example of the proposed company car for £11~12k.

A £12k loan over 4 years at 3% will cost ~£265 / month. Is that an option to consider?

Howard · 18 Jun 2018 at 17:00

Havana_UK said:
You can buy a 1-2 year old example of the proposed company car for £11~12k.

A £12k loan over 4 years at 3% will cost ~£265 / month. Is that an option to consider?

No, sadly not.

rodenal said:
The actual mileage that will be claimed is a key aspect of it really, for there to be a circa £100 overall cost I'm assuming she covers less than 10kpa so stays within the 45ppm boundary the whole time (i.e doesn't trip into 25ppm or whatever the revised rate is)?

Yes, I'd say 8,000-10,000 business miles pa, with a fair amount of personal miles on top. This is also where a company car would be useful (i.e. fuel economy and no extra costs).

It's not a ridiculous mileage, no, but a lot of it is urban in horrible traffic and built up environments in greater London etc, and so in terms of time spent in the car it is quite a lot. It's all starting to take its toll on her current car and she isn't keen to keep shelling out on bills.

IAmATeaf · 18 Jun 2018 at 17:19

Sounds like her mind is made up?

-Ad- · 18 Jun 2018 at 19:15

Howard said:
There isn't one. Either you use your own car and claim 45p per mile, or you have a company car.

Bahhhh.

Sounds like she wants a new car, so here endeth the thread

But why consider a diesel when she's going to be doing a lot of 'urban in horrific traffic and built up environments in greater London etc'? Is there a decent small petrol engined car with decent fuel economy, or if I'm reading your OP correct, the Leon is the only choice?

Then use your, presumably larger car for the longer journeys and trips away etc.

IAmATeaf · 19 Jun 2018 at 12:01

Only choice is the Leon judging by the original post.

Tee Hee Johnson · 19 Jun 2018 at 12:59

I'd likely just keep the Yaris, yeah maintaining it sucks... but it's likely not going to throw a couple of grand bill.

Kenai · 19 Jun 2018 at 18:05

In these situations where the employer offers car or nothing, it's difficult to beat because all you're paying is BIK. It's also got the benefit of point 4, which can be worth it's weight in gold.

If you like the car, there's little reason not to take it.