new company car or opt out?

rapid64k

rapid64k

rapid64k

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Hello gents I have been a company car driver for around 25 years and have only ever had two cars that were my own. I have a leased car at the moment which i never drive outside of work because it sucks!!
I own a 12 years old BMW 3 series SE Auto which i love very much:p.

I have been promoted and will have been offered a BMW 3 series must be 2.0 with low emission my work friend got himself a BMW 3 Series Diesel Saloon 320d Efficientdynamics 4dr as his company car.
I can have the same or i can opt out and get £532 car allowance. Im not sure if i should go for the company BMW or lease one for myself will i be better off?

I will be office based doing around 66 miles a day which will be over 10,000 miles a year...what should i do?
 
At this level I suspect a company car is a slightly better option unless you want something better and want to put some cash towards it.
 
Hi fox. as its going to be a new position and i will be mostly office based i cant say how many miles i business miles i may do, but it will be more than 10,000 as travel from my home to work will be classed as personal.
Tax wise i guess 20%
 
If you take the company car:

£70 a month tax.

If you take the allowance:

£360 after tax allowance

This means that net, a company car will cost you £430 a month.

But you've also got the mileage expenses to. On the company car this will be about 10-11p per mile. So £91 a month for the company car. But you can claim up to 45p a mile usually for your personal car, so that would be £375 a month. So you'd have an extra £284 each month from your mileage claim, too. Meaning that effectively the company car is costing you...

£714 a month (In terms of your net position had you opted out, ie you are £714 worse off than you would have been rather than you need to find £714 each month, if that makes sense?)

But obviously if you opt out and end up £714 a month better off versus taking the car, you must spend money on buying, running and fuelling your own car. So anything under £714 a month it costs you to buy, run and fuel your own car is money in your pocket. You also have the opporutnity to pick whatever car and spec you want really. It should be easily possible to buy a good specification 6-12 month old BMW or Mercedes thats better than a 320d and costs less than £714 a month to run, making you financially better off and driving a better car.
 
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Dang your good lol.....i got to read it all again and take it all in. Thanks for all the research.
The BMW 3 Series Diesel Saloon 320d Efficientdynamics 4dr Step Auto has very low emissions , which my company likes.
so your vote is to go for the the opt out?
 
[TW]Fox;22586238 said:
But you've also got the mileage expenses to. On the company car this will be about 10-11p per mile. So £91 a month for the company car. But you can claim up to 45p a mile usually for your personal car, so that would be £375 a month. So you'd have an extra £284 each month from your mileage claim, too.
Click to expand...

I know every company is different but the private mileage rate could be a lot lower than that which would affect the figures a bit.

For instance my company pays the same regardless of if it's a company or private car (15/18p, diesel/petrol). What you can do in that situation is claim the tax back on the difference, so you get your 15/18p whenever the company pay out + 20% of 30/27p at the end of the year.

I guess it still doesn't change the figures massively, but just showing that a private mileage rate may be a lot lower than 45p.
 
It really does depend exactly how many business miles you will do and what rate your company will pay you for fuel per mile if you are:

a) a company car driver
b) a car allowance taker

Until you know this you can't calculate for sure. But the above figures give you an idea. Most people don't look at the opportunity cost of the allowance and additional mileage claims when they appraise a company car. They just look at the 70 quid a month tax figure and think its a bargain for a new 3 Series.

If I was in your position, I'd be opting out, taking the car allowance and using the money to finance my own 5 Series and not a 3 Series. Or buy something a few years old with a warranty and enjoy the extra cash in your pocket!
 
Also it's a decent enough allowance and with 20% tax you see a fair bit of that when you take it, along with the mileage I'd likely be taking the money option.
 
You also need to consider how the company buys it's cars and if they give you a value to spend per month and a list of cars as fleet buying will usually mean they get anything from 10% to 30% off the list price of the car which mean you also get the chance for cars that would cost you a lot more. Tax is on new price however.
 
Thing is im just coming out of a bit of a financial nightmare and all my funds have been depleted so i dont really have cash to hand to buy another car right now and i dont want to take another bank loan...how about leasing a car instead?
 
Yeah was checking that out fox, all i can do at this point is work out my travel to work and home..and then estimate the rest. As its a new post i cant say how much mileage i will be doing as i will be office based about 3 -4 days a week.
10,000 maybe to little for me as its around 40 miles to office so in total 80 miles a day that alone is around 11,500 miles a year
 
[TW]Fox;22588072 said:
Dont forget excess mileage charges, it's a 10k lease.
Click to expand...

When you take out the lease its not that much more expensive for a few extra k per year.

Also mercedes do not charge that much per mile, I think its about 12p + vat if you go over your limit.
 
Yes i have seen that. I wont make that much out of private mileage anyhow as i will be predominately sited in the office maybe only going out 2 or once a week.
 
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