What to do with my car allowance?

AthlonTom · 8 Nov 2006 at 23:25

I'm going to be getting 5K a year from work soon as a car allowance

Though the question is; what to do with it? Ideally I'd like the car itself to cost no more than 360 a month so I can cover my Insurance and save some for servicing etc.

Currently driving a Y reg Peg 106 Diesel (1.5) with 52 K on the clock.

The other option is to have a brand new BMW 320 D with the M-Sport Kit from work as a company car (maitenance, tax and insurance all in)

Thoughts?

EDIT: Preferably its got to be Diesel as I do around 30K a year

Dangerous · 8 Nov 2006 at 23:26

AthlonTom said:
I'm going to be getting 5K a year from work soon as a car allowance

Though the question is; what to do with it? Ideally I'd like the car itself to cost no more than 360 a month so I can cover my Insurance and save some for servicing etc.

Currently driving a Y reg Peg 106 Diesel (1.5) with 52 K on the clock.

The other option is to have a brand new BMW 320 D with the M-Sport Kit from work as a company car (maitenance, tax and insurance all in)

Thoughts?

If you can get the 320D i'd have it easy

MagicBoy · 8 Nov 2006 at 23:38

NickXX · 8 Nov 2006 at 23:43

MagicBoy said:
Tax?

Tax on the 320d won't be too bad. I'm guessing the CO2% is around 20%, and guessing the list price of the car is around £25,000. Taxable benefit is around £5k as a result.

You will therefore end up with a net bill of £1,100@22% or £2k@40%.

AthlonTom · 8 Nov 2006 at 23:48

NickXX said:
Tax on the 320d won't be too bad. I'm guessing the CO2% is around 20%, and guessing the list price of the car is around £25,000. Taxable benefit is around £5k as a result.

You will therefore end up with a net bill of £1,100@22% or £2k@40%.

On the 320D my boss said it'l be about £70 a month, dont know what happen on car allowance though

Vertigo · 9 Nov 2006 at 07:39

NickXX said:
Tax on the 320d won't be too bad. I'm guessing the CO2% is around 20%, and guessing the list price of the car is around £25,000. Taxable benefit is around £5k as a result.

You will therefore end up with a net bill of £1,100@22% or £2k@40%.

Tis 20% but list on a 320d M Sport is £27275 so it'd be £100 per month @ 22% or £182 at 40%

To the OP: take the Beemer. If you take the money it'll be taxed first so you'll not be getting £5k per year to spend but more like £300-ish per month. Of course you'd not be paying the above tax so you need to add this onto the figure to work out what you'll actually have to spend. I still think the 320d is the better option.

wassap · 9 Nov 2006 at 08:19

Depends how many miles you are likley to do and what the criteria is for the type of car you are allowed to have with your allowance, ours had to be less than 5 years old and with less than 80,000 on the clock, so you really could run a el cheapo banger and pocket the cash.

If you are doing a lot of miles then its worth getting the company car, i thought i was only going to do 30k a year tops, 3 months in im showing 10k already, im so glad i didnt opt out now.