Company Car Allowance

[[TW]Fox]

It makes sense if your car is a tool. If it isnt, it doesnt make sense.

People tend to forget the costs they'd normally incur if they didnt have the job anyway when they calculate whether to take the cash.

If you didnt have the job with an allowance you'd buy your own car for going to work and back or whatever. Perhaps you'd spend £300 a month in total running it.

Then you get a job, you can either get a company car, or you can take a say £400 a month allowance.

Instead of buying a car on £400 a month why not buy a car on £700 a month? You'll get a pretty awesome car but you'll be no worse off than you'd have been in a conventional job with no car scheme...

 

[Jez]

It makes sense if your car is a tool.

IMO still no, if a car is a tool then buy an old mondeo or something and pocket the massive difference. It'll cost nothing to run and will be just as good as far as tool goes as a diesel golf or whatever.

Agreed with others that it doesnt work if the company put rules on age etc however. IME of companies this isnt the norm however, most simply state that it must be presentable and be inspected every now and again. An old but clean and decent looking Mk3 mondeo would pass every time at my place.

 

[wassap]

It makes sense if your car is a tool. If it isnt, it doesnt make sense.

People tend to forget the costs they'd normally incur if they didnt have the job anyway when they calculate whether to take the cash.

If you didnt have the job with an allowance you'd buy your own car for going to work and back or whatever. Perhaps you'd spend £300 a month in total running it.

Then you get a job, you can either get a company car, or you can take a say £400 a month allowance.

Instead of buying a car on £400 a month why not buy a car on £700 a month? You'll get a pretty awesome car but you'll be no worse off than you'd have been in a conventional job with no car scheme...

I can see where your coming from, and in the ideal world its a great idea, but the whole point of being in a position to have a company car is to save money, personally imat the point in my life, where i want a nice-ish car, but it doesnt have to be uber, ultimately when doing the daily grind on the M5 pootling along at 50mph, it doesnt really matter what car your in.God im getting old.

 

[djjuk]

I think the moral of this thread is that it will vary depending on many variables, opt out options, current personal car situation, allowance amount, tax threshold, mileage covered etc etc etc.

There is simply not one answer to cover everyone, so to simply state company cars are not worth it is a gross generalisation, as is the argument that taking the allowance is a waste.

Personally speaking, & after careful consideration it works out the better option to take the company car. But as said that will vary depending on each individuals circumstances.

We can't all get away with 10 year old 4ltr Mercs bought at trade after all

 

[wassap]

Its a nice scheme

Something through XXX... great scheme. Nay tax.

Something to do with interest free loans from the company,, like a personal lease paid by the company... its all good, means no tax to me anyway.

But do you pay something towards the car tho?

Ours is similar, a company is allowed to give its employee a 5k tax free loan a year.which is what we get over 3 years, which we use to buy a car, any extra and we have pay that every month via our salary.This gets round the tax implication, i work for one of the worlds biggest companies, so i doubt they have got it wrong

 

[wassap]

IMO still no, if a car is a tool then buy an old mondeo or something and pocket the massive difference. It'll cost nothing to run and will be just as good as far as tool goes as a diesel golf or whatever.

Agreed with others that it doesnt work if the company put rules on age etc however. IME of companies this isnt the norm however, most simply state that it must be presentable and be inspected every now and again. An old but clean and decent looking Mk3 mondeo would pass every time at my place.

Most companies i have come across, the age and mileage vary from 3-7 years, and 80-125k miles.

 

[dalepearson]

This is an interesting thread.
I have had a company car, and owned my own. Different companies, and different companies all result in different conclusions.

There are Pro's and Con's of each. There will never be an ultimate right or wrong answer, just an opinion. From most of my calculations in my circumstance, there was never really much in it, and you can never calculate for the unknown.

Certainly a positive on the company car front is, any major failures and expense are not your concern, and when you leave your job, made redundant or get the sack the car goes back, and no worrying how you will meet you loan payments you may have if you were financing the car yourself.

Its all a balancing game, whats right for me isnt right for everyone.

 

[[TW]Fox]

ultimately when doing the daily grind on the M5 pootling along at 50mph, it doesnt really matter what car your in

Oddly I think the opposite - when commuting through the awful traffic at 3mph in Exeter city centre I was glad to be sitting in a car with climate control, a really nicely built interior, a nice smooth quiet engine and an automatic pollutant filter to get rid of the nasties.

 

[wassap]

I dont care what car im in as long as it has a decent radio.

 

[wassap]

This is an interesting thread.
I have had a company car, and owned my own. Different companies, and different companies all result in different conclusions.

There are Pro's and Con's of each. There will never be an ultimate right or wrong answer, just an opinion. From most of my calculations in my circumstance, there was never really much in it, and you can never calculate for the unknown.

Certainly a positive on the company car front is, any major failures and expense are not your concern, and when you leave your job, made redundant or get the sack the car goes back, and no worrying how you will meet you loan payments you may have if you were financing the car yourself.

Its all a balancing game, whats right for me isnt right for everyone.

Interesting point, if you have taken out a loan to buy a 'decent' car, and god forbid you lose your job, it can be very tricky Having been close to redundancy 3 times in my brief 9 years of working, im always wary...

 

[big_white_dog84]

It's entirely dependent on how much the allowance is, what your tax band is, whether you will be using it for business miles etc.

At the moment I'm on 40p per mile, and profiting by a few hundred quid a month. This is great while the car is reliable. However if I get an office job I'll be down to £0 per month so I'd choose either the cash alternative or company car at that stage.

 

[[TW]Fox]

At the moment I'm on 40p per mile, and profiting by a few hundred quid a month. This is great while the car is reliable. However if I get an office job I'll be down to £0 per month so I'd choose either the cash alternative or company car at that stage.

But if you get an office job you wont be doing business miles and wont even need a company car, you'll be in the same situation that most people are in..?

 

[wassap]

It depends on your stature in the company, some jobs come with a car, even if you dont need it for 'work'.

 

[Kappa]

It depends on your stature in the company, some jobs come with a car, even if you dont need it for 'work'.

yep, our scheme is weird, once you reach management you get 2 cars and you pay a 'lease' no tax, as its still the company's asset or something, and the company manufactured the car (dont ask me more details on this, but its something like that). But now you dont get to choose from a Jag or LR

EDIT - The management jobs dont require travelling, you just get the cars if you want (i.e. ~£170pm for a top spec mondy)

EDIT 2 - To keep OT, If I had an allowance I depending on how much it is I would take it and buy my own car, something I really like.

 

[Scrutinize]

Right, I am definately keeping my own car for now and taking the allowance. Been a useful thread, cheers guys .

Bit worried that there may be a requirement to clean my car though

 

[Axeboy]

But do you pay something towards the car tho?

Kinda...

Im our scheme you get an allowance...

Under the allowance they pay you the difference, and obviously over, you pay...

So you can get something cheap like a base model focus and they pay you £50 a month... or you can pay £100 a month and get a top spec mondeo etc etc

 

[Northstar]

As a manager in my company I get a company car and all fuel, including that for my private use as part of my T's & C's. I could choose a car up to the value of £21K from a list of pretty mundane Fords, Vauxhalls and Renaults. I chose a new Ford Mondeo 2.0 TDCI Titanium for what it's worth.

The Inland revenue take this as being worth a total of £8200 Benefit in kind, so paying 40% tax, I pay £3280/year or £273/month. This sounds a lot but when you bear in mind I do only approx 1k business miles per year but around 25k private miles it starts to make sense. (At current pump prices that is around £3000 i would be spending on diesel anyway)

The alternative from my company is £4800 a year car allowance(after tax and NI around £200/month), but no fuel card, the company then pay 12p a mile for business usage.

It was a no brainer for me!