Moving from a company car to a car allowance
Discussion
Hi everyone.
On Friday Inwas offered a job which comes with a substantial pay rise (which is great!) but a car allowance instead of a company car.
I have been in a company car for the last 15 or so years and currently have a 3 series Touring. The new car allowance is £7K per year, and I can claim 45p per mile for the first 10k miles and 25p per mile after that (per year). I'll obviously be taxed on the car allowance but equally I'll avoid camp any car tax.
The stipulations are fairly relaxed, are fairly relaxed, 4 seats "not a fiesta and not a porsche" as a guide, a recent starter has just bought. 4 year old E class coupe, so 2/3 doors are fine. it can be Petrol or Diesel, but obviously I need to make the mileage payments work.
I'd expect to be covering between 20k and 25k business miles per year.
I am married and have a five year old boy. We have no plans to add to this currently...
Now, the way I'm looking at this is this is an opportunity to lease something a little bit different than the usual company car fodder, with initial thoughts being a 5 door M135i auto.
I realise I may to have to chuck some of my own money into this, which I am happy to do to get something I'll enjoy driving in my own time. I would prefer to keep my initial payment as low as possible.
Can any one who has done something similar advise on any pitfalls, or even point me in the direction of decent lease deals on the M135i or similar?
Or, perhaps if you think I'm not looking at this from the right perspective, what would you do?
On Friday Inwas offered a job which comes with a substantial pay rise (which is great!) but a car allowance instead of a company car.
I have been in a company car for the last 15 or so years and currently have a 3 series Touring. The new car allowance is £7K per year, and I can claim 45p per mile for the first 10k miles and 25p per mile after that (per year). I'll obviously be taxed on the car allowance but equally I'll avoid camp any car tax.
The stipulations are fairly relaxed, are fairly relaxed, 4 seats "not a fiesta and not a porsche" as a guide, a recent starter has just bought. 4 year old E class coupe, so 2/3 doors are fine. it can be Petrol or Diesel, but obviously I need to make the mileage payments work.
I'd expect to be covering between 20k and 25k business miles per year.
I am married and have a five year old boy. We have no plans to add to this currently...
Now, the way I'm looking at this is this is an opportunity to lease something a little bit different than the usual company car fodder, with initial thoughts being a 5 door M135i auto.
I realise I may to have to chuck some of my own money into this, which I am happy to do to get something I'll enjoy driving in my own time. I would prefer to keep my initial payment as low as possible.
Can any one who has done something similar advise on any pitfalls, or even point me in the direction of decent lease deals on the M135i or similar?
Or, perhaps if you think I'm not looking at this from the right perspective, what would you do?
Downsides.
If a company car breaks down on the way to work - You are not late.
If your car breaks down on the way to work - You are late
If you have a company car and you are made redundant - you don't have any car payments.
With a lease car - you are obliged to keep meeting those payments
I had a car allowance for about 11 years - I bought modestly every few years - knowing that if the job hit the fan - it could be sold immediately.
If a company car breaks down on the way to work - You are not late.
If your car breaks down on the way to work - You are late
If you have a company car and you are made redundant - you don't have any car payments.
With a lease car - you are obliged to keep meeting those payments
I had a car allowance for about 11 years - I bought modestly every few years - knowing that if the job hit the fan - it could be sold immediately.
So that leaves you around £330 a month after tax and nic.
You then have £8250 in fuel allowance.
A car like the M135i will cost you around £3500 in fuel for the year, doing 25,000 miles a year I think you will get around 34mpg average.
That leaves you around £725 a month to get a car and pay for servicing, tyres, insurance and depreciation.
I would be looking at an M3.
You then have £8250 in fuel allowance.
A car like the M135i will cost you around £3500 in fuel for the year, doing 25,000 miles a year I think you will get around 34mpg average.
That leaves you around £725 a month to get a car and pay for servicing, tyres, insurance and depreciation.
I would be looking at an M3.
With regard to the fuel rates, yes they are generous, but there is no opt in option.
Yes the worst case scenario is after 6 months this turns to s
t and I'm stuck with a car, that's why I am considering smaller cars, so that the wife could use it if need be.
Obviously I'd have to maintain and insure the car.
Yes the worst case scenario is after 6 months this turns to s
t and I'm stuck with a car, that's why I am considering smaller cars, so that the wife could use it if need be.Obviously I'd have to maintain and insure the car.
f1nn said:
With regard to the fuel rates, yes they are generous, but there is no opt in option.
Yes the worst case scenario is after 6 months this turns to st and I'm stuck with a car, that's why I am considering smaller cars, so that the wife could use it if need be.
Obviously I'd have to maintain and insure the car.
Did you read the figures I gave above? Yes the worst case scenario is after 6 months this turns to s
t and I'm stuck with a car, that's why I am considering smaller cars, so that the wife could use it if need be.Obviously I'd have to maintain and insure the car.
An M135i is around £400 a month fully maintained with that mileage and just 3 months down.
https://www.contracthireandleasing.com/car-leasing...
So you would be around £325 a month in pocket with that choice.
You could be in a 125d M-Sport for £300 a month fully maintained.
This would cost you £200 a month in fuel. Meaning you would be left with around £500 in your pocket after all costs are taken into consideration.
You could then go and buy yourself a used toy for fun, buy something like a 4.2 XK-R, they are down to £17-18k for a 50k mile one and are now depreciating pretty slowly. Or maybe a 911, if you are only doing say 5k miles a year in it you won't loose much.
I've had a car allowance for all of my roles over the 15 years or so. It averages around £7k/yr. to be honest, I tend to buy a 6 / 7yr old car for around £10 / £12k and run it for 18 months / 2 years and then sell it on. I like the knowledge that if I lose my job, I don't have a monthly commitment and I also like to be able to change my cars on a whim if I want to!
So after tax allowance = £4,200
10k @45p = £4,500
15k @25p = £3,750
Company Car Tax Saving @£120pm = £1,440
Total per year = £13,890
Lets say 25k of fuel @30mpg = £5,000 approx
Leaves you nearly £9k a year in your pocket to buy and run a car so to be honest could afford to run something pretty silly!
10k @45p = £4,500
15k @25p = £3,750
Company Car Tax Saving @£120pm = £1,440
Total per year = £13,890
Lets say 25k of fuel @30mpg = £5,000 approx
Leaves you nearly £9k a year in your pocket to buy and run a car so to be honest could afford to run something pretty silly!
gizlaroc said:
So that leaves you around £330 a month after tax and nic.
You then have £8250 in fuel allowance.
A car like the M135i will cost you around £3500 in fuel for the year, doing 25,000 miles a year I think you will get around 34mpg average.
That leaves you around £725 a month to get a car and pay for servicing, tyres, insurance and depreciation.
I would be looking at an M3.
I wouldn't. I'd be looking at an super economical 1.4 or 1.6 diesel. I'd be hoping to make an absolute fortune on the allowance and the mileage payments, and pay the money I make as overpayments on your mortgage. You then have £8250 in fuel allowance.
A car like the M135i will cost you around £3500 in fuel for the year, doing 25,000 miles a year I think you will get around 34mpg average.
That leaves you around £725 a month to get a car and pay for servicing, tyres, insurance and depreciation.
I would be looking at an M3.
It may be dull but check out what a difference it could make to your future.
TwigtheWonderkid said:
I wouldn't. I'd be looking at an super economical 1.4 or 1.6 diesel. I'd be hoping to make an absolute fortune on the allowance and the mileage payments, and pay the money I make as overpayments on your mortgage.
It may be dull but check out what a difference it could make to your future.
It may be dull but check out what a difference it could make to your future.
f1nn said:
I realise I may to have to chuck some of my own money into this, which I am happy to do to get something I'll enjoy driving in my own time.
He won't have to chuck money at his preferred choice, he will have nearly £4k a year extra to throw into that mortgage. Win win!!
Yeah, I know the sensible thing would be to get into the cheapest most fuel efficient car possible and pocket the extra, but after years of driving what other people have seen fit to provide for me, I just fancy a couple of years of driving something interesting.
The M135i seems like a good compromise between, performance, economy, fun, and being able to cope with the payments if the job went tits up...
The M135i seems like a good compromise between, performance, economy, fun, and being able to cope with the payments if the job went tits up...
TwigtheWonderkid said:
I wouldn't. I'd be looking at an super economical 1.4 or 1.6 diesel. I'd be hoping to make an absolute fortune on the allowance and the mileage payments, and pay the money I make as overpayments on your mortgage.
It may be dull but check out what a difference it could make to your future.
The sensible option is a F11 530d/535d or a E350CDI estate proper family car with fun too and sensibly economical to boot. Plus will not look out of place either in a low rent or high end place. Should also last you a very very long time. It may be dull but check out what a difference it could make to your future.
swerni said:
Do you really want to spend 20k + miles in something with sporty suspension ?
Again, personal preference, I'd go for something with comfort and all the toys.
I have and have had plenty of performance cars and I'd hate to drive them every day. It becomes tiresome aftet a while.
Are you, errr, of a certain age? Again, personal preference, I'd go for something with comfort and all the toys.
I have and have had plenty of performance cars and I'd hate to drive them every day. It becomes tiresome aftet a while.
Welshbeef said:
The sensible option is a F11 530d/535d or a E350CDI estate proper family car with fun too and sensibly economical to boot. Plus will not look out of place either in a low rent or high end place. Should also last you a very very long time.
E350 is not comfortable. I hated mine. swerni said:
Do you really want to spend 20k + miles in something with sporty suspension ?
Again, personal preference, I'd go for something with comfort and all the toys.
I have and have had plenty of performance cars and I'd hate to drive them every day. It becomes tiresome aftet a while.
Although I know what you are saying, I do 30k a year now in a BMW on run flats, when I had an M135I as a courtesy car it didn't strike me as being any worse, maybe a bit firmer but rather better damped, so where my current car never seems to settle on the motorway, the M135i seemed to sort itself out.Again, personal preference, I'd go for something with comfort and all the toys.
I have and have had plenty of performance cars and I'd hate to drive them every day. It becomes tiresome aftet a while.
I reckon I could cope with it No problem.
CDP said:
A fairly recent Insignia, 508, Passat or Mondeo diesel and a TVR/Caterfield/Marcos in the garage perhaps?
I've had an Insignia, Passat, 3 series as company cars, and iI-'d see i5 as an opportunity wasted now that I have a choice.I'm into bikes, and have already got a GSXR1000 as a toy, so I've no desire for an old TVR or similar.
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