£7,200 car allowance lease or buy? Thinking new Qashqai?

[Wdk1866]

Hi, I am in need of some help I have been made a job offer that includes a car allowance of 7200 which will be taxes at the higher rate with an expected milage of 20k per year. I am not sure what the best thing to do is...lease a new car something like a Qashqai or a hatchback Astra, focus, 1 series or a class. Or look to buy a cheap second hand and run the risk of it breaking down. Anyone been in a similar situation or seen any good deals on the mentioned cars
Thanks

[gizlaroc]

Wdk1866 said:

Hi, I am in need of some help I have been made a job offer that includes a car allowance of 7200 which will be taxes at the higher rate with an expected milage of 20k per year. I am not sure what the best thing to do is...lease a new car something like a Qashqai or a hatchback Astra, focus, 1 series or a class. Or look to buy a cheap second hand and run the risk of it breaking down. Anyone been in a similar situation or seen any good deals on the mentioned cars
Thanks

Why not lease a Golf R at £200 a month?

Look in the lease deal thread. This would leave you with enough for fuel, insurance, servicing and pocket £150 a month as well.

[Wdk1866]

I will be doing 20k miles a year so the cost of a golf r is going to go up massively for me surely?

[Dave Hedgehog]

Wdk1866 said:

I will be doing 20k miles a year so the cost of a golf r is going to go up massively for me surely?

you can normally get reasonable leases up to 20k miles, especially if its shorter term over that and they get very silly

i would imagine the BIK on an R will be pretty heavy thou

[Emeye]

Extra mileage on my golf R deal is 6ppm plus vat. Thing is fuel may be a consideration at that mileage.

Lots of amazing lease deals at the moment. Passatt CC tdi very cheap too. Scirocco tdi deals and gold,gtd,deals looking good.

[zzzzzzzzzzzzzzz]

Dave Hedgehog said:

you can normally get reasonable leases up to 20k miles, especially if its shorter term over that and they get very silly

i would imagine the BIK on an R will be pretty heavy thou

If he's given an allowance there won't be any BIK.

[TwigtheWonderkid]

gizlaroc said:

Why not lease a Golf R at £200 a month?

Look in the lease deal thread. This would leave you with enough for fuel, insurance, servicing and pocket £150 a month as well.

7200/year is 360/month after tax. So 200 for the car, 150 in pocket, so according to you he fuels, insures and services it for 10/month.

OP, are they paying you 45p a mile for fuel over and above your allowance?
I know what I'd do, lease a Seat Ibiza or similar small diesel for about £115/month, and then you will be quids in. If they pay you mileage on top, massively. Use extra money to overpay your mortgage. Not very PH but you could save tens of thousands in the long run.

[Dave Hedgehog]

zzzzzzzzzzzzzzz said:

Dave Hedgehog said:

you can normally get reasonable leases up to 20k miles, especially if its shorter term over that and they get very silly

i would imagine the BIK on an R will be pretty heavy thou

If he's given an allowance there won't be any BIK.

so he will pay tax on it ?

[Wdk1866]

Can you post a few links to them as well please. I've got a Mk 6 golf gtd at the moment

[zzzzzzzzzzzzzzz]

Dave Hedgehog said:

so he will pay tax on it ?

For the purposes of the employee, car allowance is just treated as salary, taxed in the normal way. As the OP has intimated, he a higher rate tax payer so will end up with less than £400 per month in his pocket. That would probably PCP a 125d or something similar with a smallish deposit.

[2222]

Ask the company if it has a car policy.
Some will stipulate the maximum age the car can be, it's worth checking.

[anonymous-user]

Wdk1866 said:

Can you post a few links to them as well please. I've got a Mk 6 golf gtd at the moment

Not fancy a MK7 GTD? I've got one and it's a superb car. Can be had for around £180 a month on a business lease, though your mileage will push that up slightly.

[Wdk1866]

I've just got the job offer so far so no requirements as far as I am aware I am just looking at what's affordable on my budget with expected mileage, would like something new hence looking at lease think I might have a bit of tunnel vision with the Qashqai so good to get other points of view. I haven't really enjoyed my golf gtd but maybe the new one is better?

[JQ]

Honestly, buy whatever car you want. You don't HAVE to use the car allowance to pay for the car, just treat it as extra salary and calculate a budget you're happy with, you can pay more if you want a fancy car. Presumably, your currently employer didn't give you an allowance and you still managed to run a Golf.

I get an allowance of £9,000 a year and drive a 10 year old car worth £5,000.

Don't forget the opportunity cost of the BIK payment by the way - in theory I get £435 pcm after tax from the allowance, however, if I didn't take the allowance I'd be paying around £275 pcm tax for the company car I'd receive, so my total budget is £710pcm. My car actually costs me around £200pcm.

[wasserboxer]

JQ said:

Honestly, buy whatever car you want. You don't HAVE to use the car allowance to pay for the car, just treat it as extra salary and calculate a budget you're happy with, you can pay more if you want a fancy car. Presumably, your currently employer didn't give you an allowance and you still managed to run a Golf.

I get an allowance of £9,000 a year and drive a 10 year old car worth £5,000.

Don't forget the opportunity cost of the BIK payment by the way - in theory I get £435 pcm after tax from the allowance, however, if I didn't take the allowance I'd be paying around £275 pcm tax for the company car I'd receive, so my total budget is £710pcm. My car actually costs me around £200pcm.

Not everyone can do that, it depends on the terms of your opt-out - especially if you're customer-facing.

[pherlopolus]

TBH I would keep you current car for a bit and pocket the allowance towards a nice deposit in 12 months...

[nickfrog]

gizlaroc said:

Why not lease a Golf R at £200 a month?

They are not £200/month. They are £300/month when VAT and deposit is factored in. And that's on 8k or 10k miles / year. Apart from that, good plan. ;-)

Edited by nickfrog on Sunday 15th June 11:34

[Dodsy]

I get £7500 , so i bought a Jag XJR with a loan where the repayments are slightly less than my after tax allowance. My 30ppm expenses cover all the running costs and after 1 year of owning it i have managed to make around £500 on it .

[chr15b]

gizlaroc said:

Wdk1866 said:

Hi, I am in need of some help I have been made a job offer that includes a car allowance of 7200 which will be taxes at the higher rate with an expected milage of 20k per year. I am not sure what the best thing to do is...lease a new car something like a Qashqai or a hatchback Astra, focus, 1 series or a class. Or look to buy a cheap second hand and run the risk of it breaking down. Anyone been in a similar situation or seen any good deals on the mentioned cars
Thanks

Why not lease a Golf R at £200 a month?

Look in the lease deal thread. This would leave you with enough for fuel, insurance, servicing and pocket £150 a month as well.

I take it the Golf R has replaced M135i as the stock answer to every question?

[gizlaroc]

chr15b said:

I take it the Golf R has replaced M135i as the stock answer to every question?

Absolutely, but wait till you see the C63 deals next month!!


But in all seriousness, they are such a great bargain even those, like myself, who would not have been tempted by a Golf, have to give them a look.