When are you going fully electric?

[jamoor]

Why wouldn't compare an EV to a diesel?

A diesel doing 20k miles a year will be around half your quoted fuel cost which changes the calculation somewhat.

If you budget £2000 a year depreciation on an older BMW/Merc/Lexus going from 3 to 6 years old + £500 road tax + 14p per mile of fuel + £600 in repairs/warranty and £150 servicing a year (excl tyres) = £6100 a year.

£2k saving to have a diesel.


Personally I wouldn't even consider a diesel due to noise, refinement, reliability so I have never even calculated it. I am also not sure how owning a diesel affects warranty costs either.

 

[Surveyor]

If you budget £2000 a year depreciation on an older BMW/Merc/Lexus going from 3 to 6 years old + £500 road tax + 14p per mile of fuel + £600 in repairs/warranty and £150 servicing a year (excl tyres) = £6100 a year.

£2k saving to have a diesel.

Personally I wouldn't even consider a diesel due to noise, refinement, reliability so I have never even calculated it. I am also not sure how owning a diesel affects warranty costs either.

Edit for calculation failure.

I still think you're over estimating the diesel fuel costs a bit but either way £2k isn't an insignificant difference.

 

[chorse]

I just about managed to torture the spreadsheet to make buying a new EV on the company, look cheaper than keeping an old banger on the road. But I wasn't fooling anyone tbh.

 

[jamoor]

I just about managed to torture the spreadsheet to make buying a new EV on the company, look cheaper than keeping an old banger on the road. But I wasn't fooling anyone tbh.

Really? Buying it as a company car with 0 BIK is a no brainier

 

[WJA96]

Really? Buying it as a company car with 0 BIK is a no brainier

And the 100% tax relief in year 1 of ownership. For most small businesses that one vehicle purchase (even on hire purchase) will wipe out a huge part of the Year 1 tax liability. It really IS a no-brainer.

 

[Russinating]

Yup, bought my Model 3 SR+ through my business and my calcs are pages WAY back by now, but Corporation Tax saving is £7,503 (less profit on sale, if/when I do), making upfront purchase cost £ £31,986. BIK tax is £257.94 for first 3 years, which I've already saved on zero-rated resident parking permits where I live, and my current MPG is ~3050; I've spent about £1.20 to do 1,100 miles since March.

And that's ignoring the fact that I could effectively give myself a £40,000 pay rise without paying any tax (vs buying a used or new card privately, as I had in the past).

 

[WJA96]

If you budget £2000 a year depreciation on an older BMW/Merc/Lexus going from 3 to 6 years old + £500 road tax + 14p per mile of fuel + £600 in repairs/warranty and £150 servicing a year (excl tyres) = £6100 a year.

£2k saving to have a diesel.


Personally I wouldn't even consider a diesel due to noise, refinement, reliability so I have never even calculated it. I am also not sure how owning a diesel affects warranty costs either.

I don't know where you're getting your diesel car serviced for £150/year (£450) over 3 years/60,000 miles. Generally I see ~£200 for a minor service and ~£350 advertised for a major service and that's assuming you don't need anything done to an automatic gearbox (DSG Service is about £200 every 38,000 miles) or a cambelt (60-120,000 miles is prime territory for a cambelt change) or a clutch...

Of course Audi will charge you £350 per year for the first 4 years to check the cooling system, change the cabin pollen filter and wiper blades on a low-mileage E-tron....

4 years, 36,000 miles
2 x Services with inspections and 2 x MOT’s covering:

• High Voltage and battery components including all leads, cooling lines for damage and leaks
• 2 x MOT’s (available in year 3 & 4 of ownership)
• 2 x Pollen filter changes
• 2 x Brake fluid changes
• 2 x Air-conditioning services
• 2 x Set of wiper replacements

£1355 paid in advance at time of purchase. Quite literally LOL.

 

[jamoor]

I don't know where you're getting your diesel car serviced for £150/year (£450) over 3 years/60,000 miles. Generally I see ~£200 for a minor service and ~£350 advertised for a major service and that's assuming you don't need anything done to an automatic gearbox (DSG Service is about £200 every 38,000 miles) or a cambelt (60-120,000 miles is prime territory for a cambelt change) or a clutch...

Of course Audi will charge you £350 per year for the first 4 years to check the cooling system, change the cabin pollen filter and wiper blades on a low-mileage E-tron....

4 years, 36,000 miles
2 x Services with inspections and 2 x MOT’s covering:

• High Voltage and battery components including all leads, cooling lines for damage and leaks
• 2 x MOT’s (available in year 3 & 4 of ownership)
• 2 x Pollen filter changes
• 2 x Brake fluid changes
• 2 x Air-conditioning services
• 2 x Set of wiper replacements

£1355 paid in advance at time of purchase. Quite literally LOL.

That is literally lol. It's not even reasonably ridiculous. under £100 quids worth of parts there.

 

[chorse]

Really? Buying it as a company car with 0 BIK is a no brainier

Kind of.

-Depreciation is still a big cost even after considering the tax breaks. Battery tech is moving fast, so depreciations is likely to be similar to an ICE car or worse over 5 years. That's probably 3 or 4k a year just in depreciation. More than the total cost of running my old banger .
-You only save corporation tax on the depreciated amount. If you sell the car, the proceeds go back onto income and are taxable.
- BIK might not be not zero forever

Yes maintenance and fuel costs are low, but as a percentage of total running costs i these bits don't move the needle that much vs deprecation.

No they don't appreciate, over the long term.

 

[jamoor]

Kind of.

-Depreciation is still a big cost even after considering the tax breaks. Battery tech is moving fast, so depreciations is likely to be similar to an ICE car or worse over 5 years. That's probably 3 or 4k a year just in depreciation. More than the total cost of running my old banger .
-You only save corporation tax on the depreciated amount. If you sell the car, the proceeds go back onto income and are taxable.
- BIK might not be not zero forever

Yes maintenance and fuel costs are low, but as a percentage of total running costs i these bits don't move the needle that much vs deprecation.

No they don't appreciate, over the long term.

Depreciation rate is irrelevant if you are leasing or PCPing with an option to purchase at the end.

The depreciation (in this case lease payment) is offset by the fuel savings.

 

[WJA96]

That is literally lol. It's not even reasonably ridiculous. under £100 quids worth of parts there.

Genuine cabin pollen filters are about £70 each from TPS, so a bit more than £100 worth of parts, £100 in MOTs, £100 for brake fluid changes, £35 for wiper blades. That's still £1000 over the odds though. And you're paying in advance so you're almost certainly financing that at 5.9% APR over 4 years as well. Genuinely scary.

 

[WJA96]

Depreciation rate is irrelevant if you are leasing or PCPing with an option to purchase at the end.

The depreciation (in this case lease payment) is offset by the fuel savings.

You don't get the big tax break unless you buy the car. If you lease then it does come off your corporation tax and you don't pay the VAT. It really is a staggeringly generous situation at the moment. Our accountant literally sent us all links to the Tesla website.

 

[Russinating]

You don't get the big tax break unless you buy the car. If you lease then it does come off your corporation tax and you don't pay the VAT. It really is a staggeringly generous situation at the moment. Our accountant literally sent us all links to the Tesla website.

Not quite correct. You can only claim half the VAT back if you lease and you can only offset profit with the monthly payments, as opposed to the FYA of 100% of the vehicle cost.

 

[WJA96]

- BIK might not be not zero forever

Indeed. BIK is zero in 20/21, 1% in 21/22 and 2% thereafter. Still buttons for personal use of a brand new car. And I don't know if anyone has mentioned the fuel benefit? That's another £200/month saving against what it would be on an ICE car for a higher rate tax payer.

And I think we're all being a bit naive about the government funded smart chargers. You only get the £350 subsidy if you install chargers that phone home and can be controlled by a central system. Hmmmm - does that sound like an opportunity to tax us all for charging our cars in future? Yes, I think it does. So I bought the Tesla charger. It's not smart, doesn't qualify for the £350 grant but the company is paying for it (actually they paid for 3) and the smart functions (economy tariff charging etc.) can be controlled from the Model 3's own systems.

 

[WJA96]

Not quite correct. You can only claim half the VAT back if you lease and you can only offset profit with the monthly payments, as opposed to the FYA of 100% of the vehicle cost.

Thank you for the correction. I knew there was a reason we had an accountant

 

[Russinating]

Thank you for the correction. I knew there was a reason we had an accountant

Haha. It differs again with PCP, as it's a loan you technically do own the vehicle (in the eyes of HMRC), you can't claim any VAT back from the PCP payments but you can claim 100% FYA of the entire cost of the vehicle, repayable if you hand it back after the term. I think, if I remember rightly!

In the end I opted just to buy mine for cash because we could and it made it far simpler on paper. All the money out, 100% FYA, regular BIK payments.

 

[WJA96]

Can you get a business PCP?

 

[jamoor]

With Tesla I just put my company name etc and everything was addressed to the business so yes its possible.

 

[McPhee]

Yes maintenance and fuel costs are low, but as a percentage of total running costs i these bits don't move the needle that much vs deprecation.

That would depend heavily on the price segment of the car and the mileage in question, surely? Saving £500/year on running costs on a £60k car will barely make a dent in the total cost of ownership. But saving £2k/year on running costs on a £25k car is going to make a huge difference to ownership costs.

If you're driving an I-Pace 5,000 miles per year, there's a chance it'll be more expensive than an X5 or Cayenne. If you're driving a Leaf 20,000 miles a year, it's probably cheaper than a Focus.

 

[jamoor]

That would depend heavily on the price segment of the car and the mileage in question, surely? Saving £500/year on running costs on a £60k car will barely make a dent in the depreciation. But saving £2k/year on running costs on a £25k car is going to make a huge difference.

If you're driving an I-Pace 5,000 miles per year, there's a chance it'll be more expensive than an X5 or Cayenne. If you're driving a Leaf 20,000 miles a year, it's probably cheaper than a Focus.

Exactly, in my example I budgeted 2k in depreciation annually for a 3 series going from 3-6 years old, the fuel costs for 20k are higher than the depreciation.
With a petrol even more so.

If the car was going from year 1-3 then the fuel costs would be lower than depreciation.