Company Car Question

PMKeates said:
Do you realise that to have a company car for 3 years will cost this guy £17,028?
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The above figure is of course not correct for many reasons. However, that would be the "cost" to the OP only if he currently had zero costs; which is not the case.

The true cost to the OP is actually £17,028 minus all the costs of maintaining his Skoda on the road for three years (i.e. all non-fuel costs, insurance, depreciation, etc.).
 
VFM Addict said:
The above figure is of course not correct for many reasons. However, that would be the "cost" to the OP only if he currently had zero costs; which is not the case.

The true cost to the OP is actually £17,028 minus all the costs of maintaining his Skoda on the road for three years (i.e. all non-fuel costs, insurance, depreciation, etc.).
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Of course it's correct. If you can buy some bread from Tesco for 99p, yet can also buy some from Asda for £1.50, the cost of the Asda bread isn't suddenly 51p. It costs £1.50. I think the OP is well aware that it isn't free to run his Skoda. On top of running it also depreciates, which forms part of the Skoda TCO (as if he got the company car he could sell it now at current value, whereas if he drives the Skoda he can only sell it in the future at reduced value).

He will likely save in the order of £7-8,000 keeping his Skoda for another 3 years versus taking the company car, and that's without considering the favourable mileage rates he will probably have if he uses a private car for business use.

I get the feeling you may be arguing a position here to justify your own choice to have a company car?
 
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Do what I do, take the money and spend as little on a car as possible = quids in.

If your going to spend the whole £550 pm running a car, in a year you'll say to yourself it's not worth it and revert to the company car and get rear ended without lube by HMRC
 
Or get rear ended by another car without a worry in the world?

@PMK
As regards your words, "I get the feeling you may be arguing a position here to justify your own choice to have a company car?", not so.
As stated clearly in another thread the majority of my company car days (all my working life) were devoid of the considerable BIK implications that have increasingly been a major consideration in recent years.

I guess its really a case of peace of mind. I accept that it may cost the OP £7,000-£8,000 over three years going the CC route but at times such may be worthwhile in that it removes virtually all the worries and unexpected problems of running a car. That includes selling the Skoda in a couple of years and buying a replacement.

Professionally I also feel the CC route has benefits. But that's a whole different debate.
 
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I presume you can explain which statement in the above post was ridiculous. Come to think of it, it is ridiculous for me to think you could support those words.
 
Seems everyone else is taking a flat financial stance and ignoring career smarts. The former is simple maths the latter typically returns a greater sum over time.
 
'Career Smarts'?

It's simply - you appraise both options from a position of not running a car, because both options are ways of running a car. You don't compare either option with your current situation, because if you do you'll make flawed judgements.
 
@ Fox

What I am saying Fox is that the decision is not one that can be arrived at solely mathematically. It truly isn't that simple.

As I've stressed throughout this thread there are other considerations which cannot be ignored. Much in the same way that a car with the most powerful engine is no necessarily the better car the best choice here is not one solely of maths.

Peace of mind, invariably predictable costs, etc., etc., cannot be dismissed as irrelevant in the existing situation. Yet most peeps have not even mentioned them. Take a look.

As regards Career Smarts that is something somewhat too complex to cover here in depth. But it too is not irrelevant. In essence its relevance here revolves around the reality that, just as there are two ways to grow a company, organically or by acquisitions, there are two ways to boost one's career/salary, by promotions or by moving employers for better positions/salaries. The company car route has benefits re employer mobility in many more ways than one.
 
VFM Addict said:
The company car route has benefits re employer mobility in many more ways than one.
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Err the company car route is a barrier to employer mobility not an advantage! It means that if you leave your company on your last day you have to hand the keys to your car back!
 
Not so, Fox. The car increases mobility.

Have you ever heard the expression, "Dressed for Stardom".

In the office environment the guy with the posher accent, who wears more expensive suits, etc., typically has a promotion advantage. Its just the way such almost subliminally influences people. So if two employees are reasonably equal the guy who is more, "Dressed for Stardom", will almost invariably get the promotion. The same impacts recruitment. Image. Turn up in a Merc, one image. Turn up in a Skoda, different image.

It is a fallacy that employers truly consider an applicant's present salary very much. Few do. They know what they are prepared to pay for a position and if they want someone that is what they'll pay. Unilever are a classic example. I've known them offer someone a 25% salary hike when offering just 10-12% would have got the individual. So the Merc image is more valuable - "Dressed for Stardom" - than a higher present salary. It increases the chances that you'll get offered the job whereas current salary alone (even including car allowance) simply does not.
 
I can see where WFM is coming from.

Rightly or wrongly and maybe sadly, the guy in the used skoda may be perceived in a negative light compared to the upwardly mobile chap in the nice merc. Not to mention the guy 'towing the company line' so to speak.
 
VFM Addict said:
So if two employees are reasonably equal the guy who is more, "Dressed for Stardom", will almost invariably get the promotion. The same impacts recruitment. Image. Turn up in a Merc, one image. Turn up in a Skoda, different image.
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So buy a Merc yourself if you are that obsessed with image. What do you drive, out of interest?

So the Merc image is more valuable - "Dressed for Stardom" - than a higher present salary. It increases the chances that you'll get offered the job whereas current salary alone (even including car allowance) simply does not.
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Are you seriously suggesting that picking a company car is a good idea because when you turn up to your interview for your next job, you'll look better? I don't deny the effect a car has on image but.. seriously?

How many interviews have you attended where they even knew what car you drove?!

I cant help but think you've taken a reasonably sound concept - that a nicer car has a better image - mixed in a truckload of delusion and come out with, well, what you've just posted.

If you know what you are doing you can use your car allowance to buy a flasher, more expensive looking car than anything on that list. How upwardly mobile would you feel if you had a Mercedes E Class or a BMW 5 Series whereas your colleagues on the company car scheme only had a C Class or a 3 Series?

If I was offered the OP's car allowance or company car list on Monday I'd take the allowance and 2 weeks later I'd pull into the carpark in a car that is faster, better looking, more prestigious and as far as anyone can tell, no older than the cars on the list.

And I'd be better off as a result.
 
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I'd love to see an interview where I could just drive straight into the interview room sideways, open the door, sit down and get the job while my tyres are still smoking behind me. After all I own a BMW which is dressed for stardom. That would be well career smart.
 
Oh dear, Fox, you really do miss the point so often, don't you?

I have never been obsessed with image. What I clearly stated was the reality that others can be influenced by it. Since you ask, and out of courtesy to you, these days, I am retired and my wife and I drive a C3 Picasso diesel. So plainly I am not obsessed with image am I? A more practical car one could not find. And since your memory seems to fail you, before that we had a Mitsubishi Colt which I still maintain is not as bad on motorways as one might think (now do you recall?).

Personally, Fox, I would be somewhat worried about the self-buy-merc plan you tendered. It is risky. The image projected by someone on £25k, who is valued by his current employers such as for them to provide him with a merc, is significantly different from the image of someone earning just £31k who spends his money on running a merc. But perhaps the difference escapes you.

It is also, although you doubt it, not unsusal for employers to see what car an interviewee draws up in. Equally it is not unusual for Visitors bays to be right by reception and clearly visible to anyone who comes down to reception to meet you. It would obviously further come as a shock to you that interviewers sometimes ask how you got to their site - "Did you drive or come by train?" - and equally not unheard of for interviewers to walk you to reception when you leave or heaven forbid to your car.

As always though I am not young enough to know everything and so at my age I just have to struggle by with what I have learnt. So I could be wrong.
 
VFM Addict said:
I presume you can explain which statement in the above post was ridiculous. Come to think of it, it is ridiculous for me to think you could support those words.
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In fairness I had only seen your comments about being rear ended when I replied - to value a hire care in the event of an accident at £8,000 was patently ridiculous.

As a separate comment, I work in the automotive industry for a reasonably well known company. It's a place where you'd expect most people who work there to be car expects. I have a 5 series that will be 10 this year that cost me peanuts, and people think I have a really good car. They look up to it as it's 'big', has a 'big' engine, and has a BMW roundel on the bonnet. The OP could trade his Skoda in for something older, but has a badge, stick a private plate on and he'd be 'dressed for success' for a fraction of the cost.

In fact, I am glad we rapidly went from trying to financially justify a company car, to 'it's worth it in case we have a nuclear apocalypse', and now to 'you'll look better'. As you constantly retrench it reveals the utter fallacy of your entire argument.
VFM Addict said:
I guess its really a case of peace of mind. I accept that it may cost the OP £7,000-£8,000 over three years going the CC route but at times such may be worthwhile in that it removes virtually all the worries and unexpected problems of running a car. That includes selling the Skoda in a couple of years and buying a replacement.
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Ok, I'll let you have that one. If you are scared of your own shadow and have the personal financial competence of a goldfish, owning your own car may be a tough gig.
VFM Addict said:
In the office environment the guy with the posher accent, who wears more expensive suits, etc., typically has a promotion advantage.
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£8,000 buys some nice suits, cologne and RP lessons. These are aspects of your image that are far more visible than the car you drive.
VFM Addict said:
Turn up in a Merc, one image. Turn up in a Skoda, different image.
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True, but then there are cheaper ways to get a Merc than paying £17,000 over 3 years for one, and 99% of people couldn't tell the difference as long as it's silver and has the sport kit.
VFM Addict said:
we had a Mitsubishi Colt which I still maintain is not as bad on motorways as one might think (now do you recall?).
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100% credibility failure when talking about cars. They are as bad as anyone who hasn't paid for one thinks.
 
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