i3 as company car - no brainer?

[trowelhead]

Hello All,

Am i right in thinking i can lease a BMW i3 through my ltd company for approx 300 per month (which will lower my corp tax)

Let's say 50/50 work / private use

and then the only thing i'll be paying is BIK at 5/7/9% in next upcoming years on EV so £619 £866 and £1,113

I've worked some numbers and it looks like a no brainer in terms of savings against running my current car (not via company), am i missing anything? (yes a leaf / zoe would be cheaper still as the lease is 100pm cheaper, but not sure i would enjoy the interior in those)

Can you look over these figures and let me know if i have mis calculated anything / missed anything out?

Ok so:

(all costs are monthly to make it easier)

Fuel 635d = 200 i3 = 40 (this is worst case for i3, probably would be less as i'd use the free charge points)
Depreciation 635d = 150 i3 = 300 (this is the lease cost for the i3 vs my anticipated depreciation on the 635)
Insurance 635d = 212 i3 = 69 (using quotes from Confused.com)
VED 635d = 22 i3 = 0
Maintenance 635d = 75 i3 = 0 (would only have the i3 two years from new shouldn't need anything. 635d would be a service/tyres etc)
BIK 635d = 0 i3 = 72 (would only have the i3 two years from new shouldn't need anything. 635d would be a service/tyres etc)
Return on capital if i sell car 635d = 0 i3 = -80 (this would effectively make the i3 80 per month cheaper, cash invested into monthly dividend paying fund at 7% yield)
Corp Tax saving 635d = 0 i3 = -60 (this would be lease cost of 3600 less off my 20% corp tax bill)

So Total Cost
635 = 659 per month (7908 per year)
i3 = 341 per month (4092 per year)

Am i missing anything?

[Phooey]

trowelhead said:

Am i missing anything?

Yep, you will look a right tool in an i3

[trowelhead]

Phooey said:

Yep, you will look a right tool in an i3

Perhaps, i quite like them, they certainly stand out! I'll go for the orange one for maximum effect

Edited by trowelhead on Thursday 6th August 23:25

[trowelhead]

This is all subject to a test drive of course - might hate it but seems like a good fit for the 90% city traffic i get to enjoy, beats a leaf/prius etc etc.

I'll upgrade it to an i8 of course when budget permits

[isleofthorns]

trowelhead said:

Hello All,

Am i right in thinking i can lease a BMW i3 through my ltd company for approx 300 per month (which will lower my corp tax)

Let's say 50/50 work / private use

and then the only thing i'll be paying is BIK at 5/7/9% in next upcoming years on EV so £619 £866 and £1,113

I've worked some numbers and it looks like a no brainer in terms of savings against running my current car (not via company), am i missing anything? (yes a leaf / zoe would be cheaper still as the lease is 100pm cheaper, but not sure i would enjoy the interior in those)

Can you look over these figures and let me know if i have mis calculated anything / missed anything out?

Ok so:

(all costs are monthly to make it easier)

Fuel 635d = 200 i3 = 40 (this is worst case for i3, probably would be less as i'd use the free charge points)
Depreciation 635d = 150 i3 = 300 (this is the lease cost for the i3 vs my anticipated depreciation on the 635)
Insurance 635d = 212 i3 = 69 (using quotes from Confused.com)
VED 635d = 22 i3 = 0
Maintenance 635d = 75 i3 = 0 (would only have the i3 two years from new shouldn't need anything. 635d would be a service/tyres etc)
BIK 635d = 0 i3 = 72 (would only have the i3 two years from new shouldn't need anything. 635d would be a service/tyres etc)
Return on capital if i sell car 635d = 0 i3 = -80 (this would effectively make the i3 80 per month cheaper, cash invested into monthly dividend paying fund at 7% yield)
Corp Tax saving 635d = 0 i3 = -60 (this would be lease cost of 3600 less off my 20% corp tax bill)

So Total Cost
635 = 659 per month (7908 per year)
i3 = 341 per month (4092 per year)

Am i missing anything?

Remember... Most of your 635d costs are from taxed income, so you need to gross these up to get the 'real cost', whereas, most of the cost of the i3 paid by the company out of gross earnings.

[Guvernator]

Leasing an electric vehicle through your company is certainly quite tax efficient so if you like the i3 than the figures do work vs owning or leasing privately.

Unfortunately most electric vehicles look odd or are crap to drive (sorry I include the i3 in this). You do have the Tesla or i8 which are more interesting but then lease costs on those are nearly £1000 so not really worth it.

Surely there is a market for an electric vehicle which looks good and is decent to drive but doesn't cost £100k?

[trowelhead]

isleofthorns said:

Remember... Most of your 635d costs are from taxed income, so you need to gross these up to get the 'real cost', whereas, most of the cost of the i3 paid by the company out of gross earnings.

Very good point, hadn't thought about that. So for example car insurance would be billed to company and thus paid with pre tax company earnings?

[trowelhead]

Guvernator said:

Leasing an electric vehicle through your company is certainly quite tax efficient so if you like the i3 than the figures do work vs owning or leasing privately.

Unfortunately most electric vehicles look odd or are crap to drive (sorry I include the i3 in this). You do have the Tesla or i8 which are more interesting but then lease costs on those are nearly £1000 so not really worth it.

Surely there is a market for an electric vehicle which looks good and is decent to drive but doesn't cost £100k?

I've requested a test drive so i have no idea if i'll like it or not. Very mixed reviews some love it some are not keen. I must admit it seems a good fit for the type of city driving i have to endure.

Agreed i'd LOVE an i8, but the cost is just too much for me to stomach. If it was priced at M3 levels i'd be all over it like a tramp on chips

In fact, i'd love bmw to release an i3/i4 with similar setup to the i8 but costing 40-50k and looking like the new m3/m4!

[DSLiverpool]

I love my Leaf, it drives like an S class and costs buttons. Now I have a 100 mile round trip to current work I'm using a diesel but the weekend is all Leaf.
However it's for utility work I don't do pleasure drives but as a commuter it's superb, relaxing and cheap.

[gangzoom]

trowelhead said:

In fact, i'd love bmw to release an i3/i4 with similar setup to the i8 but costing 40-50k and looking like the new m3/m4!

Wait till Q1 2016, when Tesla is due to announce details of their up and coming Model 3....You can always go and buy a BMW badge off ebay to cover up the Tesla badging

[Guvernator]

gangzoom said:

Wait till Q1 2016, when Tesla is due to announce details of their up and coming Model 3....You can always go and buy a BMW badge off ebay to cover up the Tesla badging

I'm pretty sure the Model 3 will be a Focus-esque car. Not really what I would call "exciting". I think gangzoom and I are talking about wanting an electric performance saloon\coupe but at a price that's a little more affordable than the current offerings from Tesla and BMW.

[Zoon]

Guvernator said:

Unfortunately most electric vehicles look odd or are crap to drive (sorry I include the i3 in this). You do have the Tesla or i8 which are more interesting but then lease costs on those are nearly £1000 so not really worth it.

£550 a month for a Model S

[Guvernator]

Zoon said:

£550 a month for a Model S

At that price you are getting the basic model S which is missing AWD, quick\dual charging options and has reduced range as well as performance, i.e. it's the base spec model. To get a better featured Tesla you are looking at adding a couple of hundred on top of that which is too rich for me. Even £550 a month is a bit too much when you compare what else you can have for that monthly cost.

OP have you also considered the Audi A3 e-tron? Still all electric so should be zero rated a but a bit more normal looking than an i3.

[LordGrover]

Guvernator said:

Leasing an electric vehicle through your company is certainly quite tax efficient so if you like the i3 than the figures do work vs owning or leasing privately.

Unfortunately most electric vehicles look odd or are crap to drive (sorry I include the i3 in this). You do have the Tesla or i8 which are more interesting but then lease costs on those are nearly £1000 so not really worth it.

Surely there is a market for an electric vehicle which looks good and is decent to drive but doesn't cost £100k?

There will be, but probably still two years off.
Tesla Model 3 looks quite promising.

[Guvernator]

One thing to bear in mind though is that HMRC are clamping down on EV cars too. Cars that used to be zero rated for BIK are now 5% and this is going up over the next few years to 7% then 9%. It really looks like they don't want people to have company cars any more.

[trowelhead]

DSLiverpool said:

I love my Leaf, it drives like an S class and costs buttons. Now I have a 100 mile round trip to current work I'm using a diesel but the weekend is all Leaf.
However it's for utility work I don't do pleasure drives but as a commuter it's superb, relaxing and cheap.

Sorry for delayed replies not been on ph for a while (been on holiday)

Funny you should mention the leaf on here as that was another option.

I have just hired one this week starting today for £80 for the week. Interestingly it would actually be cheaper for me to rent a leaf from a hire car company and run it than it would be to drive my current car!

I'm enjoying it so far, there is a bit of range anxiety creeping in but I'm sure that will go away in time.

I've used a rapid charger at ikea today which was easy enough - very smug feeling driving it home for free.

Ride quality is great on our crap roads, and it feels very solid and well built. Pretty much a perfect commuter car.

The leaf also works out way cheaper than most of the other options.

DS - what is yours like spec and colour wise? I think I'd go with the acenta version in red/blue/white with the beige interior.

The question would be whether it's worth buying a used 2011 model outright for 8-9k or lease/pcp a new one for around 200 a month.

Either way, I'm chucking more than 200 a month of diesel in the 635 so seems like a no brainer

Edited by trowelhead on Wednesday 19th August 23:57

[trowelhead]

gangzoom said:

Wait till Q1 2016, when Tesla is due to announce details of their up and coming Model 3....You can always go and buy a BMW badge off ebay to cover up the Tesla badging

I read your comment on another thread about driving a leaf and then saving enough in 2 years to buy a model s. What a great plan I may just join you! I'd hope there are some used bargains in a few years time when lease cars come back in. Or the new model 3 depending on what it's like

[trowelhead]

Guvernator said:

OP have you also considered the Audi A3 e-tron? Still all electric so should be zero rated a but a bit more normal looking than an i3.

Yes I've looked into the e-tron, golf gte, egolf, i3 rex and leaf.

Going to try my best to test drive as many of the above as possible before coming to a decision.