Company Car Options
Discussion
Starting a new job which comes with a car allowance or option to take a car.
I don't start for a couple of months so have no more information than that currently.
Does anyone have an idea of what sort of cars are available and how far an 8k allowance will go? I assume the company just lease one on my behalf? I'll be doing fairly low mileage <10k and there is no business mileage.
It will have to be an EV for the BIK.
I don't start for a couple of months so have no more information than that currently.
Does anyone have an idea of what sort of cars are available and how far an 8k allowance will go? I assume the company just lease one on my behalf? I'll be doing fairly low mileage <10k and there is no business mileage.
It will have to be an EV for the BIK.
Different companies have different schemes and use different lease providers.
In my experience, there is a huge difference between how far your company car budget goes depending on the lease provider. Same as if you sourced it privately from different providers. So nobody will be able to tell you what you'd be able to get as a company car option.
One thing that a lot of companies are doing is salary sacrifice company car schemes, where the car contributions come out of your pre-tax salary. If you're a higher rate taxpayer (which I'd assume you are with an £8k car allowance) then that saves 40%+. I can do this through work, but only on EVs or hybrids.
I've not bothered with company car schemes for years, as I've got two big dogs which have a decent chance of damaging the interior
In my experience, there is a huge difference between how far your company car budget goes depending on the lease provider. Same as if you sourced it privately from different providers. So nobody will be able to tell you what you'd be able to get as a company car option.
One thing that a lot of companies are doing is salary sacrifice company car schemes, where the car contributions come out of your pre-tax salary. If you're a higher rate taxpayer (which I'd assume you are with an £8k car allowance) then that saves 40%+. I can do this through work, but only on EVs or hybrids.
I've not bothered with company car schemes for years, as I've got two big dogs which have a decent chance of damaging the interior
How does your allowance translate?
For example when our employer offered company cars, we received £550 per month budget, this meant that you could choose a car that was up to £550 ex.VAT per month from the chosen lease provider. If you were savvy you could just find a lease from a different lease company offering business leases at the £550 ex.vat price and then HR would arrange the lease for you, also sorting out insurance, maintenance etc. You just paid the BIK each month.
Annoyingly our employer has pulled away from company car schemes and now only offers car allowance, which can be used how you wish.
They have also initiated an EV Salary Sacrifice scheme through Octopus.
The problem lots of people have is that £550 per month, before tax and NI is paid, isn't really alot to PCP or lease a car, tax it and insure it these days, especially if you are a 40% tax payer.
For example when our employer offered company cars, we received £550 per month budget, this meant that you could choose a car that was up to £550 ex.VAT per month from the chosen lease provider. If you were savvy you could just find a lease from a different lease company offering business leases at the £550 ex.vat price and then HR would arrange the lease for you, also sorting out insurance, maintenance etc. You just paid the BIK each month.
Annoyingly our employer has pulled away from company car schemes and now only offers car allowance, which can be used how you wish.
They have also initiated an EV Salary Sacrifice scheme through Octopus.
The problem lots of people have is that £550 per month, before tax and NI is paid, isn't really alot to PCP or lease a car, tax it and insure it these days, especially if you are a 40% tax payer.
after tax (roughly)
20% - £530/m
40% - £400/m
£8k doesn go very far vs a provided vehicle if you want sometyhing new. Remember you will need to tax / insure / service / maintain / MOT the vehicloe from that budget not just buy/lease it.
There may be criteria on what you run as an opt-out vehicle, age number of seats etc.
20% - £530/m
40% - £400/m
£8k doesn go very far vs a provided vehicle if you want sometyhing new. Remember you will need to tax / insure / service / maintain / MOT the vehicloe from that budget not just buy/lease it.
There may be criteria on what you run as an opt-out vehicle, age number of seats etc.
Thanks all. What the contract says is that I receive a non-pensionabke 8k allowance which I can elect to use part or all off and be provided with a car. So guess they do all the arrangements.
Trying to finance a car privately post tax on the 8k isn't going to go far.
Will have to wait till I've started and see what the options are. Trying to negotiate my notice down as currently I am doing absolutely nothing.
Trying to finance a car privately post tax on the 8k isn't going to go far.
Will have to wait till I've started and see what the options are. Trying to negotiate my notice down as currently I am doing absolutely nothing.
Scabutz said:
Thanks all. What the contract says is that I receive a non-pensionabke 8k allowance which I can elect to use part or all off and be provided with a car. So guess they do all the arrangements.
Trying to finance a car privately post tax on the 8k isn't going to go far.
Will have to wait till I've started and see what the options are. Trying to negotiate my notice down as currently I am doing absolutely nothing.
sounds like they just give you a budget to spend at an approved lease provider rather than it being an opt out scenario where you're essentially paid itTrying to finance a car privately post tax on the 8k isn't going to go far.
Will have to wait till I've started and see what the options are. Trying to negotiate my notice down as currently I am doing absolutely nothing.
I do 10k a year, similar car allowance, they pay for all my fuel still, I have a 2017 Golf GTi currently. If I opt out, I would be offered a EV up to 70k but obviously lose the allowance + have to pay to charge at home. For me I much prefer having my own car and being able to drive around in something fun. I financed the car through savings and a small loan, had it 3 years and own it outright now.
Your situation sounds different and I don't fully understand it, but it sounds like they are giving you an allowance to lease a car through their scheme?
Your situation sounds different and I don't fully understand it, but it sounds like they are giving you an allowance to lease a car through their scheme?
zedx19 said:
Your situation sounds different and I don't fully understand it, but it sounds like they are giving you an allowance to lease a car through their scheme?
So it's my salary is X then + 8k car allowance which I can take in cash or use part or all of it and have a car provided. I'm assuming that will be something they lease on my behalf.I don't currently have a car as my wife kept it when we separated. I could take the cash and buy a car from savings and or loan, but by the time the tax man has taken its cut that 8k doesn't go far when I have to be paying tax, insurance, servicing etc.
If I can get a lease car through them and just give up some salary seems the most cost effective way of getting a car.
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