Thinking of going with a Personal Lease

D3K · 28 Jan 2016 at 23:09

Moving jobs in a month which I need a car for.
I have options via the company, but the no brainer is a £340 pcm car allowance.

I've always had maintenance on my business lease cars due to obligation, but I'm not really sure I need it on personal lease as it adds at least £50 to the monthly cost.

Should I take maintenance on a 2-3 yr personal lease?

I've also noticed that they pay mileage depending on the engine size (new HRM regulations?). Over 2L is 26p compared to 1.4-2 which is 18p.
As I will be travelling a fair bit, I'm wondering if it would be worth getting something beefy.

On a side note, I am a complete noob with cars so if any of the above sounds ill advised, it is.

Dr House · 28 Jan 2016 at 23:27

there was a good deal on a BMW 330e not long ago, something like £2k down and £200 per month.

blairw · 29 Jan 2016 at 00:02

Is that 340 pre tax or post tax? As you will be taxed at your standard rate (40% or lower depending on salary) if you choose to have it bundled in to your wage instead of taking a car.

D3K · 29 Jan 2016 at 00:20

Dr House said:
there was a good deal on a BMW 330e not long ago, something like £2k down and £200 per month.

Yeah only 8k mileage though, and a hefty downpayment for a 2 year deal (imo).

blairw said:
Is that 340 pre tax or post tax? As you will be taxed at your standard rate (40% or lower depending on salary) if you choose to have it bundled in to your wage instead of taking a car.

Meh yes it's pre. Back to the excel spreadsheet for me

blairw · 29 Jan 2016 at 00:41

Also remember that if you have a working base that is not your home, your milage to customers/business milage will be the journey milage, minus the milage you would usually cover to get to the base/office!

Your 204 (assuming 40% tax rate) is to cover everything mind - servicing, repairs etc

iaind · 29 Jan 2016 at 07:37

£340 is a pretty horrible allowance, especially if you're a 40% tax payer.

Will they pay the HMRC rate if you use your own car? If you're a 40% payer then it's the only option that doesn't suck for tax. You'll lose 140 of your allowance or pay 40% tax on the BIK of a company car.

Whereas you get mileage at 45p tax free up to 10k business miles which works out at £340 tax free a month - I assume this is where their figures came from. If your business use will be significant and regular then this will be the cheapest option. Of course the risk is that a quiet month will leave you out of pocket, but a busy month will put you in "profit" - provided your annual total is high enough then this works quite well

IMO I wouldn't be leasing in this circumstance though, if something changes then you can't get out of it. I was doing loads of mileage in my own car for quite some time so went to get something newish - a year or so later they decided it would be better for everyone if they leased a pool car... Meaning my regular source of mileage claims (£400-500 a month sometimes) vanished overnight. As mine wasn't a lease, it was a PCP, I sold it and walked away with the deposit I put in.

If it's a new job and the current car is suitable enough then just let them pay you the full mileage rate, at least until after your probation and you know exactly how much use it'll be getting. Then get a personal loan or something for a nearly new car

Skeeter · 29 Jan 2016 at 07:57

Just picking up on one bit from the OP, I've never seen a maintained personal lease that wasn't a con. I'm on a 2 year/8k a year lease and the first service interval is 20k, so in theory I'll never hit it. All I'm likely to need is a couple of tyres. Taking a maintained lease would have been stupid.

D3K · 29 Jan 2016 at 08:12

iaind said:
£340 is a pretty horrible allowance, especially if you're a 40% tax payer.

Will they pay the HMRC rate if you use your own car? If you're a 40% payer then it's the only option that doesn't suck for tax. You'll lose 140 of your allowance or pay 40% tax on the BIK of a company car.

Whereas you get mileage at 45p tax free up to 10k business miles which works out at £340 tax free a month - I assume this is where their figures came from. If your business use will be significant and regular then this will be the cheapest option. Of course the risk is that a quiet month will leave you out of pocket, but a busy month will put you in "profit" - provided your annual total is high enough then this works quite well

IMO I wouldn't be leasing in this circumstance though, if something changes then you can't get out of it. I was doing loads of mileage in my own car for quite some time so went to get something newish - a year or so later they decided it would be better for everyone if they leased a pool car... Meaning my regular source of mileage claims (£400-500 a month sometimes) vanished overnight. As mine wasn't a lease, it was a PCP, I sold it and walked away with the deposit I put in.

If it's a new job and the current car is suitable enough then just let them pay you the full mileage rate, at least until after your probation and you know exactly how much use it'll be getting. Then get a personal loan or something for a nearly new car

It's likely that I'll far exceed 10k a year, but no doubt not pro rata every month. Yes I now agree that the allowance on it's own is a paltry sum compared to what I'm on just now (£400 budget organised by the company, with insurance). With the allowance I do get mileage on top, 18p a mile since I won't be running bigger than 2l. That offsets the first 10k miles from the other option to 27p a mile, or £225 a month. After 10k it's +8p a mile.
They seem comparable, though the £340 seems more stable. Ugh nm I'm forgetting tax offset again. I'm supposed to be telling my boss I'm off today, but this throws a spanner in the works.

I do need a tonne more than 8k skeeter. Why don't you just take taxis instead?

blairw · 30 Jan 2016 at 17:36

Any chance of negotiating the car rate? If you can get it up to 500 and you're on the 40% tax rate that'll leave you with 300 which is closer to your original estimate!