Yet another company car thread

Brookert

Brookert

Brookert

Soldato
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13 Dec 2010
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If you had the choice of using a company car, or a car allowance, what would you do? Both include fuel for work.

1. The company car, a new octavia with enough gizmos for work such as such nav.

or

2. An allowance that works out at £300 a month.

The upside to the allowance is I get to pick what I want, and get some sort of equity built up or own it after finance ends. Also, my tax code doesn't take quite the monumental hit it does at the moment. The downside being I do at least 30000 miles a year, rendering many pcp and lease deals unavailable. Also, insurance and maintenance costs etc.

The upside to a company car is peace of mind motoring, with everything covered.

What you do?
 
It depends on the mileage rate you'll get for fuel. Normally with an allowance you also get maybe 27p/mile etc, which makes the difference.

I don't think its as simple as allowance every time, 30,000miles per year is quite high.

You need to do a spreadsheet of both options including mileage rates, maintenance and any tax back on mileage you can get (if any). You also need to decide on a value of car that you would be happy with. This cost then goes against the tax implication of the company car.

I'm not convinced the allowance is the right answer for 30k per year based on £300/month only.
 
The thing is, what decent level estate car can you get for less than £300, that allows you to rack up moon mileage?

So not only do I need to factor in the savings in tax, I need to consider company mileage rates and mileage tax relief. I believe you can claim 22p a mile from the company, then you could claim the difference to 45p for the first 10000 tax relief, then 25p per mile after 10000 tax relief after that?

I may have got that all completely wrong.....
 
You are pretty much right on the mileage, so run some calcs based on those numbers.

I think it'll come down to what you would accept as a decent car for 30k per year
 
Well, not an Astra estate put it that way!

The aim of the game is to get myself an automatic of something I actually like to be in. Driving in traffic is absolutely killing my left knee.
 
To be honest anything that's going to be a 30,000 mileage allowance and also insurance (never required a quote for that high so could be a good chunk of your £300) etc. for £300 a month is not going to come close to the Octavia I wouldn't have thought, every lease deal I've looked at requires you to call regarding mileage above 20k so to compare properly is going to be difficult, also there would a initial payment/deposit on a lease vehicle.

I personally if doing 30k a year would take the company Octavia, can you request an auto explaining that you're getting knee pains?
 
Don't forget that the £300 will also be taxed, so you'll be left with less in your pocket, on the plus the company car tax you'd incur will be back in your pocket.

If it were me, at that sort of mileage and given that the allowance is only £300 I'd just get the company car.

Also you mention equity built up but how long would you keep the car for with that sort of mileage going onto it before you start getting hit for big bills?
 
Those figures I'd be taking the car, you'll wipe the value off anything in warranty and I wouldn't want to be chancing 30k per year on something out of warranty that wouldn't depreciate hard.
 
Thanks for your replies. It seems OCUK has spoken in favour of the company car. It does seem that the mileage is a bit of killer. The next job grade comes with a significantly higher allowance.

I can't complain about the spec of the cars they've ordered. A lot of other companies give out much lesser vehicles for the same job.
 
Opting for the company car is I think the wise choice as if i was doing that many miles last thing I'd also want to have to be responsible for is the maintenance of the car.

I used to do 20k+ miles a year but as soon as that dropped to under 4k I opted out, if my mileage goes up I'll jump back into the seat of diesel :D
 
Combination of low monthly allowance + high miles makes the company car the right choice IMO.

I do similar miles but my allowance is double what you're being offered and I get fuel back @ £0.22 / mile + tax relief too.
 
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