Company Car or Not
Discussion
I have the choice -
Option 1 : £10k pay rise to use on my car and fuel
Option 2 : £10k a year on a company car which is to include fuel which would be £4k per year.
Option 1 :
Keep my Saab 93 Diesel
My tax bracket would be 40%, so I would take home £6k extra. I travel 120 miles a day, so fuel would be around £4k per year and I would have 2k left over to spend on the car.
Option 2 :
Would cost me £6k out of my take home wage per year.
I would get a new car
Fuel, insurance servicing etc would be paid for
I can sell the SAAB for £4-5k
What would you do?
Option 1 : £10k pay rise to use on my car and fuel
Option 2 : £10k a year on a company car which is to include fuel which would be £4k per year.
Option 1 :
Keep my Saab 93 Diesel
My tax bracket would be 40%, so I would take home £6k extra. I travel 120 miles a day, so fuel would be around £4k per year and I would have 2k left over to spend on the car.
Option 2 :
Would cost me £6k out of my take home wage per year.
I would get a new car
Fuel, insurance servicing etc would be paid for
I can sell the SAAB for £4-5k
What would you do?
skilly1 said:
I travel 120 miles a day, so fuel would be around £4k per year and I would have 2k left over to spend on the car.
Aren't you already paying this though? Or did I miss something. ie, if the fuel cost is going to be £4k per year, are you doing additional mileage for it? If not, it's costing no more than it does already.skilly1 said:
The mileage is commuting so I can't claim for it against tax.
Current set-up is not relevant as it a complicated situation and I can't compare, please start with a blank canvas.
You must have to do lots of offsite meetings many, many miles from your normal place of work though don't you!!!Current set-up is not relevant as it a complicated situation and I can't compare, please start with a blank canvas.
steve z said:
skilly1 said:
The mileage is commuting so I can't claim for it against tax.
Current set-up is not relevant as it a complicated situation and I can't compare, please start with a blank canvas.
You must have to do lots of offsite meetings many, many miles from your normal place of work though don't you!!!Current set-up is not relevant as it a complicated situation and I can't compare, please start with a blank canvas.
I think I would take the company car. So you start with £10k, £4k is taken away with tax which leaves you with £6k of which £4k will go on fuel which leaves you with £167 per month to cover your maintenance, insurance etc and considering you are covering 600 miles per week which is roughly 30k per annum. Take the company car and put the miles on their car - unless the car they are offering is dreadful. I realise you are going to pay company car tax but its swings and roundabouts.
flattotheboards said:
I think I would take the company car. So you start with £10k, £4k is taken away with tax which leaves you with £6k of which £4k will go on fuel which leaves you with £167 per month to cover your maintenance, insurance etc and considering you are covering 600 miles per week which is roughly 30k per annum. Take the company car and put the miles on their car - unless the car they are offering is dreadful. I realise you are going to pay company car tax but its swings and roundabouts.
Yes but if I take the company car I will be taxed around £6k for benefit in kind which needs to be added into the equation.CinqAbarth said:
Erm, it's only £6k BIK if you opt for an expensive, high emissions car.
For example, a 520d SE Auto would come in at £2.2k BIK, or a Mercedes E250CDI SE Auto comes in at £2.8k.
I've lost track of fuel benefit costs, but you probably need to double those figures for included fuel, which would make sense with a 120 mile commute.For example, a 520d SE Auto would come in at £2.2k BIK, or a Mercedes E250CDI SE Auto comes in at £2.8k.
ETA: I expect the OP is referring to the gross amount, so £6K BIK relates to £2.4K payable.
Edited by Deva Link on Friday 6th August 21:35
Deva Link said:
CinqAbarth said:
Erm, it's only £6k BIK if you opt for an expensive, high emissions car.
For example, a 520d SE Auto would come in at £2.2k BIK, or a Mercedes E250CDI SE Auto comes in at £2.8k.
I've lost track of fuel benefit costs, but you probably need to double those figures for included fuel, which would make sense with a 120 mile commute.For example, a 520d SE Auto would come in at £2.2k BIK, or a Mercedes E250CDI SE Auto comes in at £2.8k.
ETA: I expect the OP is referring to the gross amount, so £6K BIK relates to £2.4K payable.
Edited by Deva Link on Friday 6th August 21:35
Would make a lot of sense if the company offers private fuel benefit.
Op, I did the maths several times re "private fuel". break even was 11k miles a year 5 years ago, 9k miles 3 years ago, not done it since. now that fuel has gone up, it might be less!
Unfortunately, it looks like you might have to have a pretty "normal" car, but you might be surprised as to what finance deals are out there. Watch for the CO2 emissions - that new 3 series with efficient dynamics is about 1k a year less tax than a 320d, for example. The bluemotion jobs are good too.
Now, I might get lynched for this but..
under current rules, the prius might be a good shout. Witht the tax you save, you could run a PH type car for the weekends. I know it's lame, but I seriously looked at this option before parking became an issue for me.
Unfortunately, it looks like you might have to have a pretty "normal" car, but you might be surprised as to what finance deals are out there. Watch for the CO2 emissions - that new 3 series with efficient dynamics is about 1k a year less tax than a 320d, for example. The bluemotion jobs are good too.
Now, I might get lynched for this but..
under current rules, the prius might be a good shout. Witht the tax you save, you could run a PH type car for the weekends. I know it's lame, but I seriously looked at this option before parking became an issue for me.
Atomic Gibbon said:
under current rules, the prius might be a good shout. Witht the tax you save, you could run a PH type car for the weekends. I know it's lame, but I seriously looked at this option before parking became an issue for me.
+1 for the Prius. New ones are excellent - even the old shape isn't as bad as people tell you they are.I recall mine costs around 70 quid / month, but it's a T-Spirit, so comes with every toy in the book.
Amazingly quiet on a motorway run, too.
Take the car allowance: saves you a few bob and if/when you move on from your current company you still have a car of your own. One to bear in mind is that insurers often do not honour NCB built up on company cars and you have to start with 0 NCB. If you are lucky they may offer a discount for having used a company car, but it will not be as great as a full NCB. Anyway, having a brand new car is overated.
chrisispringles said:
One to bear in mind is that insurers often do not honour NCB built up on company cars and you have to start with 0 NCB.
I got full NCB and several companies said they support it when I opted out.One thing I always suggest to people who are carefully calculating the financial aspects is that the "peace of mind" benefit of having a company is worth a good £100/mth. No worries about where you park it, getting punctures in brand-new tyres etc.
With 600 miles per week comuting, plus a bit of private mileage, the OP is going to murder the value of any car he owns.
One thing I thought was bonkers when we went through this exercise is a lot of people went out and got PCP etc on exactly the same cars as they could have had as company cars, with very marginal financial benefits. If you're going to opt out, at least get something different!
Deva Link is spot on - I leant my company car to the wife a few months ago, and a pikey in a Transit dropside tried to squeeze past her on a single track road, scraping the rear 3/4 panel. Was all done and fixed within 10 days, complete with courtesy car etc.
If that had been her car, it would have been a whole world of pain to get sorted, and meant increased premiums for the next few years, even as a non-fault accident.
When I briefly opted out of a car scheme and bought my own car, I was getting paranoid about where I parked it etc, and servicing / tyres / brakes etc were never as simple as phoning the lease company and asking them to take it away for the work to be done.
However - after playing around with the idea of running a 'nice' company car, I now just opt for the cheapest to tax that fits my day to day requirements.
If that had been her car, it would have been a whole world of pain to get sorted, and meant increased premiums for the next few years, even as a non-fault accident.
When I briefly opted out of a car scheme and bought my own car, I was getting paranoid about where I parked it etc, and servicing / tyres / brakes etc were never as simple as phoning the lease company and asking them to take it away for the work to be done.
However - after playing around with the idea of running a 'nice' company car, I now just opt for the cheapest to tax that fits my day to day requirements.
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