Company Car Allowance

[TW]Fox;11613412 said:
As for your mates A3 - well, a car will reflect the care you put into it. Most people dont care about company cars so they get battered. The original owner of my car did 35k business miles a year in it - it was his own car - and it was absolutely immaculate despite this.
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The cars were cared for as required by the lease company and my work - serviced at all the usual intervals, cleaned regularly (a requirement because we often carry customers around), and it's not like I was redlining the thing in every gear and doing burnout starts at every junction, I didn't exactly thrash it around. No matter how careful you are with a car, 40,000 miles a year is not good for them. The extended A3 had almost 120,000 on the clock, in just shy of 3 years. I'd be surprised if that thing drove again without a major rebuild.

I really, really wouldn't want to do that in a nice car that I had significant financial and emotional investment in.
 
[TW]Fox;11613483 said:
Where does this notion that to get a decent car you'd have to spend £20k come from?
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Well depends on what you want to buy and the age mileage etc. But to buy an equivalent car to what I get from work I'd need to spend in the region of 20K, even if that 20K was on a 2 year old 530d or simliar. I could spend less but then I would be buying something with 60K miles on the clock or older etc.
 
[TW]Fox;11613412 said:
It wouldn't bother me - depreciation is not a concern for me becuase the cost of ownership I calculated factored in a residual value of zero. Increased running costs would be funded by the mileage allowance the company car allowance. Running a 5 year old used car does not cost more than leasing a brand new car.
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[TW]Fox;11613483 said:
Where does this notion that to get a decent car you'd have to spend £20k come from?
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Ah but, like me you already have the car and a nice one at that.


The thing is, assuming you don’t have a suitable car which is covered under the allowance terms and conditions (e.g. 4 years old, 4 seats etc differs between schemes/companies), thus if you had to buy a car outright to use as a company car + pick up all the expenses, it becomes much more expensive.

For example on a PCP on a new 20k car (As to make this work you need manufacturers warranty, curtsey car, road side recovery etc to get similar benefits to the company car and to be equal to a reasonable company car scheme car)

Deposit ~ 10% = £2000 (may or may not be needed)

Monthly repayments over 2 years = £400pm assuming a 0% APR and 8k residual value.

PCP limited mileage options ~ 20-30k miles per annum usually

Fuel = Private not expensed ~ 1.5k per year = £125 pm

Servicing = £70 per month (fair figure allowing for tyres etc)

Insurance = £50pm with business cover (requirement for this will be part of allowance T&C)

Total monthly = £645pm not including the deposit.

Say your salary is 25k = take home pay of £1,578 per month after tax.



Now if you get a car allowance of 300-400pm then your annual salary becomes £29k (max in this case)

Now your take home = £1,808 per month after tax

Take off the car costs -£645 = £1163 per month.

Now if you take the company car, the only payment is company car tax on £1,578 which at say £3000 per annum = £250pm. Take that off your salary and you are left with

£1,328pm (I am not taking private fuel mileage off on the company car scheme as depending on the scheme it seems you can virtually get this covered)

So in this instance you are ~£180pm better off.
 
Scottly said:
When I handed my A3 back to the guy from the lease company, it was a goddamn wreck. Another guy had an A3 that had been extended for an extra year, when the lease was up they had to come and take it away on a flatbed because it was so poorly. I feel sorry for the poor sod who bought those after we'd done. If it had been my own personal pride and joy M3 or M5 or whatever, after being battered for 2-3 years because work made me drive it into the ground, I'd be pretty upset.
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I dont understand how you can consider it worth driving something like a 1-series, compared with the allowance and the tax you will be paying its a total no brainer.

I will compare my situation; i had a Seat Leon 1.9TDI (90HP) pile of crap company car.

By opting out of the scheme, saving tax, and gaining my allowance, my paycheque is over £300pm after all deductions higher than it was. So thats over £300pm extra in my pocket.

£300! For a Seat Leon, what a load of rubbish, you can run miles better cars than a Leon for £300.

There is no way it can make sense, ever to have a company car.

FWIW i run one of the most expensive to run saloons available (Mercedes S-class V8 with air suspension), and do around 50,000 miles per year. It STILL doesnt cost much more than the Leon and ive taken it to the extreme, AND my car allowance isnt a very good one. In other companies with a better allowance it would be even more of a no brainer.
 
Jez said:
FWIW i run one of the most expensive to run saloons available (Mercedes S-class V8 with air suspension)
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Yer but your a pimp:D

Just had a look at lease hire and that works out better than my last posts PCP rates.

Actually £500pm gets you a nice lease hire car with maintenance, tax etc. As long as you don't do moon mileage.
 
Jez said:
£300! For a Seat Leon, what a load of rubbish, you can run miles better cars than a Leon for £300.

There is no way it can make sense, ever to have a company car.

FWIW i run one of the most expensive to run saloons available (Mercedes S-class V8 with air suspension), and do around 50,000 miles per year.
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Wait, so you purchase, insure, get breakdown cover for, clean, tax, MOT, service and repair an S-Class for less than £300 month? I'd love to see that broken down.

edit: the figures, not the car. Though that would be mildly amusing.
 
It depends on the tax bracket you are in as well. Depending the allowances etc it can and does make sense for some people. When I did the maths on mine I was less than 1800 a year better off by taking the allowance (after tax, insurance etc but no payments fort the car). 1800 doesn't buy you much in the way of a car.
 
Rambaud said:
If your employer is only paying 18p per mile for business use, you can claim the balance from HMRC - up to 10,000 miles = 40p, 25p per mile thereafter.

It is given as a tax relief (at your highest rate) rather than actual "cash" like from your employer.

Example :

You do 10,000 business miles and pay tax at 40%. Tax Refund = £880.00 (40p-18p x 10,000 @40%).

You can claim for previous 5 years, if appropriate.
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Is that true even if you get a specific car allowance? I will be looking into this, it's not worth a fortune bu every little helps!
 
My dad always gets company cars. He does 30k ish a year and he choses a 2litre TD (think atm hes just ordered a 2.0tdci new focus) as the tax is lower than most other family cars. He likes the peice of mind (no financial worries), and a new car.
 
Scottly said:
Wait, so you purchase, insure, get breakdown cover for, clean, tax, MOT, service and repair an S-Class for less than £300 month? I'd love to see that broken down.

edit: the figures, not the car. Though that would be mildly amusing.
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Purchase price is irrelevent as i buy at trade and sell at retail, i wont lose much if anything on the capital.

If we take monthly figures for everything;

£66 Insurance
£3 Breakdown
£0 Cleaning - i clean it myself
£15 Tax
£2 MOT
£100 Service (thats main dealer rates, going on my very high mileage)
£40 tyres (again, very high mileage, and huge tyres)

So thats £226 of fixed costs on average per month. Ok, it breaks from time to time, these bills CAN be large, but this is only due to it being the car it is, if i had something like a 3-series or a 5-series the bills would be NOTHING like they are for this car.

Plus we are comparing apples with oranges, a Mercedes S-class with a 90HP diesel Leon.

Its a total no brainer. I could run something like a 231bhp 330I Sport for LESS than the 90HP leon. If we compare like with like, i could run that same Leon if i wanted, but privately, i would save hundreds every single month as the leon would cost virtually nothing to run.
 
[TW]Fox;11613693 said:
It depends how they are used - for long journeys 40k miles is far easier than 20k miles of average use.
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Also depends on the car. But 40k per year for 3 years is still a lot of wear and tear and annual servicing costs could be huge so a fully maintained car if doing this mileage is a must.

Not that many cars can come out of 120k miles in 3 years looking great.
 
I think we are arguing over nothing here, every company seems to have different schemes, i would have to have a less than 4 year old car with less than 100k at point of use, £500 a month wouldnt really get me a better car than i have through the company.(not if you have to go out any buy another car)

I agree with scottly tho, the novelty of having a uber car soon wears off after you spent 2 and bloody half hours on the M6, its a tool at the end of the day, yes you dont want a crap car like Jez's leon, but a 1'er or A3 is more than pleasent.

I swear some of you young-uns have been spoilt with the cars you drive (not a criticism id have loved a s class or 5'er at your age) not everything below your class of car is crap.
 
Jez said:
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Great, so you can afford it because you buy cars in a way that most car drivers can't. Not really a valid comparison.

You can't not include purchase costs since most people won't be able to, most of us will have to lease or get a loan to buy. That needs to be included.

e: also you'd do 100,000 miles in 2 years and still be able to break even?
 
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Rough figures for me

my old company car (5 years ago, Impreza WRX ) compared to now running my own M3


Saving in tax £430 a month

allowance £273 a month ( 462 before tax)

AMAP credit £100 a month

so break even is at £803 a month



outgoings

Over 4 years repayments will be £27500 , estmated value at end £12000 , deposit £500

so cost for car £16000 for 4 years = £333 a month

insurance 55 a month

maintenance,tyres etc £150 per month

other bits , tax ,AA etc £40 a month


private fuel £50 per month



outgoings total £628




so £175 in credit each month and I have a better car
 
mrk1@1 said:
Ah yer but for the ones you have found many many more have fallen by the wayside.
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Oh of course - my point isnt for one minute that all cars like that are fine. Merely that if owned and looked after by a careful driver, they are fine, and nothing more.
 
Depends on scheme

I get a company car but pay no tax...

So opting out doesnt work as well as the company car... but would give a bit more choice. I have to choose a diesel if its the company car scheme.

But including servicing/insurance/tax/repairs etc etc its much better in the scheme for me.
 
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