6500k car allowance, 25-30k miles pa

[Swampy1982]

So, let me tackle the key questions first

1 - Yes I know I was talking about what company car less than a year ago
2 - Yes it is still school holidays
3 - No I am not a prepubescent boy
4 - Yes, fully aware "what car" threads are annoying
5 - Any help given would be truly appreciated

So - The story

Current in a comfortable job, with reasonable salary and a basic my2017 Audi A4 rep mobile for a company car, good MPG, nice basic spec, does everything I want it to (although I wish it was an estate)

Got a phone call out the blue from a competitor, offering circ. 50% more basic, plus £6500 car allowance. Also included a fuel card for private and business miles

I need help with the following

1 - Realistically, what fuel efficient but reasonable car can I get with the car allowance, I do like the German brands but am open to suggestion (40% tax)
2 - How the hell does a fuel card work! (what would tax look like etc)
3 - What method is best to obtain a car considering the miles (25k-30k PA)
4 - I would need the car quick, likely I would be put on gardening leave but would need the car around 6-8 weeks max

Requirements are
1 - Diesel (because of the miles)
2 - Decent boot
3 - Modern
4 - 4 door minimum
5 - Available quickly
6 - Fit within/around the car allowance after tax @40%
7 - Ideally ok to insure (assuming I cannot transfer no claims from the company policy I might be expensive to insure 35 years old, social, domestic, commuting and business miles

If you can help with any of the points, or have advice/experience for me to watch out for then I'd massively appreciate it, sorry for the long post but wanted to cover everything I could

[joshcowin]

Some sort of volvo?

xc60?

[Steviesam]

Fuel card that includes personal use = no diesel and a V8.

[Swampy1982]

Steviesam said:

Fuel card that includes personal use = no diesel and a V8.

I'd love love love to do that... don't tempt me

that being said, I genuinely haven't a clue how the fuel card works, whether it varies from business to business, whether you just get the tax back, whether it only covers certain MPG etc etc

[Cupramax]

6500k = 6,500,000 hth.

[Swampy1982]

joshcowin said:

Some sort of volvo?

xc60?

I do like a good volvo, my dad has one and they are relatively bullet proof although uninspiring (which is fine for the task...)

but then I suppose I need to understand how is best to obtain said Volvo, finance, lease, loan, etc etc its the miles thats the killer largely I think for lease deals

[Alex_225]

Might be a bit old fashioned but I own a W211 Merc E Class which I bought purely for motorway driving and I absolutely love it. Mine is an early one (2003) but cost me £4k last year. £6.5k would bag you a lower mileage newer one.

That said mine has 117k on it and the 3.2 straight six diesel engine, drivers really well and 50mpg is achievable too. That's with the 5 speed auto, the newer ones have the 7 speed.

Might not be your thing OP but I'm very happy with mine.

[TwigtheWonderkid]

You need to look very carefully at having a fuel card for personal mileage. If you get a similar car to what you have now, boring but worthy A4 diesel or suchlike, you'll probably have to do about 10K private miles a year before the fuel saving outweighs the tax hit.

[TooMany2cvs]

Swampy1982 said:

that being said, I genuinely haven't a clue how the fuel card works, whether it varies from business to business, whether you just get the tax back, whether it only covers certain MPG etc etc

I rather suspect that they'll have an "acceptable vehicles" list.

If the fuel card covers personal fuel as well as business use, then it'll be taxed as a benefit in kind - you pay income tax on £22,600 x the BiK percentage of the car.

[anonymous-user]

Are they going to give you a pence per mile allowance as well, otherwise you're getting about £325 a month (less a large amount of P11d tax on your fuel card) to buy, run and service your own car. Which doesn't seem very generous for a role putting you into higher rate earnings.

[Swampy1982]

TwigtheWonderkid said:

You need to look very carefully at having a fuel card for personal mileage. If you get a similar car to what you have now, boring but worthy A4 diesel or suchlike, you'll probably have to do about 10K private miles a year before the fuel saving outweighs the tax hit.

Thank you for that, well worth noting.

On the assumption that commuting counts as personal miles, and commuting being the majority of the miles, I think I should be ok with this...

[Swampy1982]

janesmith1950 said:

Are they going to give you a pence per mile allowance as well, otherwise you're getting about £325 a month (less a large amount of P11d tax on your fuel card) to buy, run and service your own car. Which doesn't seem very generous for a role putting you into higher rate earnings.

I'm not sure on this point, seeking clarity on it, as you are right that it is a bit tight for the requirement.

[Hungrymc]

Just a word of caution, make sure you know the criteria to qualify for the car allowance. I changed from company car to car allowance about 10 years ago and it was brilliant at first as there were no rules - I ran an M3 convertible and a 911 C4S as daily cars for the first 5 years. Then they started tightening the rules up and now we have to satisfy certain criteria (which changes at the different car allowance levels) to retain the payment. The benefit is now much reduced as they've effectively forced people to run cars very similar to those which they would have qualified for in the old company car scheme (maximum age, diesel, certain manufacturers, minimum models / specs)..

Make sure you know the rules - worth asking for the car policy.

[Swampy1982]

Hungrymc said:

Just a word of caution, make sure you know the criteria to qualify for the car allowance. I changed from company car to car allowance about 10 years ago and it was brilliant at first as there were no rules - I ran an M3 convertible and a 911 C4S as daily cars for the first 5 years. Then they started tightening the rules up and now we have to satisfy certain criteria (which changes at the different car allowance levels) to retain the payment. The benefit is now much reduced as they've effectively forced people to run cars very similar to those which they would have qualified for in the old company car scheme (maximum age, diesel, certain manufacturers, minimum models / specs)..

Make sure you know the rules - worth asking for the car policy.

great advice, noted...

[General Fluff]

TooMany2cvs said:

I rather suspect that they'll have an "acceptable vehicles" list.

If the fuel card covers personal fuel as well as business use, then it'll be taxed as a benefit in kind - you pay income tax on £22,600 x the BiK percentage of the car.

That's not how it worked when I had one. BIK value of the car was irrelevant as it's not a company car. I paid tax on all the fuel used as if the fuel cost itself was a BIK (regardless whether personal or private use), then reclaimed the tax using HMRC's mileage rates for the business use.

In summary OP, ask HR at the new employer as whilst you may get the right answer here, you won't know which one it is.

On the car, it may be the only opportunity you get to run something really desirable without worrying about fuel costs. Take advantage if you can.

[spookly]

1 - Why bother with fuel efficiency if you have a fuel card? Some employers will have a policy which might limit choices. In absence of any restrictions on fuel type or mpg, I would be getting the most fun petrol car with the largest engine possible.
It's possible that company policy could also restrict type/size/age of car too, which would also restrict choices.... so find out what the policy would be.


2 - A fuel card lets you buy fuel just like a credit card, but only fuel. This is then usually billed directly to your employers, saving you having to pay for fuel and claim expenses. The tax man will charge a flat rate for a fuel card if it is available for personal use. If you do a lot of personal miles then it works out very good, if you do few personal miles then the tax on the fuel card could be higher than the cost of paying for fuel.

3 - Lease or buy fairly new. Will depend on company policy for the age of vehicles (if they have one). It will also depend if that £6500pa is pre or post tax. Post tax that will give you £540 a month, if you hadn't deducted tax you'll have £325 a month to spend. A lease with £540 30k miles is easily possible. A lease at < £325 a month will be more of a challenge to get anything decent.
Just do the maths, look at the best leasing options and add up the total cost. Then look at some new and second hand models and calculate the total cost of ownership, make sure you include any financing costs. Then compare, taking into account any resale/residual you price in for buying/selling.

4 - You can get lease cars that are already in stock, or buy something on a dealer forecourt. 6-8 weeks is plenty of time.

[rsbmw]

General Fluff said:

TooMany2cvs said:

I rather suspect that they'll have an "acceptable vehicles" list.

If the fuel card covers personal fuel as well as business use, then it'll be taxed as a benefit in kind - you pay income tax on £22,600 x the BiK percentage of the car.

That's not how it worked when I had one. BIK value of the car was irrelevant as it's not a company car. I paid tax on all the fuel used as if the fuel cost itself was a BIK (regardless whether personal or private use), then reclaimed the tax using HMRC's mileage rates for the business use.

In summary OP, ask HR at the new employer as whilst you may get the right answer here, you won't know which one it is.

On the car, it may be the only opportunity you get to run something really desirable without worrying about fuel costs. Take advantage if you can.

Yes - I do exactly this now. Most employers with car allowance plus fuel card for personal use will have some criteria the car must adhere to (age, mileage, engine size being the most likely).

Still works out better than a company car though.

[General Fluff]

spookly said:

1 - Why bother with fuel efficiency if you have a fuel card? Some employers will have a policy which might limit choices. In absence of any restrictions on fuel type or mpg, I would be getting the most fun petrol car with the largest engine possible.
It's possible that company policy could also restrict type/size/age of car too, which would also restrict choices.... so find out what the policy would be.


2 - A fuel card lets you buy fuel just like a credit card, but only fuel. This is then usually billed directly to your employers, saving you having to pay for fuel and claim expenses. The tax man will charge a flat rate for a fuel card if it is available for personal use. If you do a lot of personal miles then it works out very good, if you do few personal miles then the tax on the fuel card could be higher than the cost of paying for fuel.

3 - Lease or buy fairly new. Will depend on company policy for the age of vehicles (if they have one). It will also depend if that £6500pa is pre or post tax. Post tax that will give you £540 a month, if you hadn't deducted tax you'll have £325 a month to spend. A lease with £540 30k miles is easily possible. A lease at < £325 a month will be more of a challenge to get anything decent.
Just do the maths, look at the best leasing options and add up the total cost. Then look at some new and second hand models and calculate the total cost of ownership, make sure you include any financing costs. Then compare, taking into account any resale/residual you price in for buying/selling.

4 - You can get lease cars that are already in stock, or buy something on a dealer forecourt. 6-8 weeks is plenty of time.

1 - Because you'd be better off if you use less fuel for the same amount of miles since you can re-claim tax on business mileage at the applicable rate.

2 - I think this only applies to fuel cards used with company cars. Different rules for using your own car.

3 - Why lease or fairly new? Financially the best option is to buy cheap and old and pocket the cash. Anything else is personal preference.

[Swampy1982]

Loots of good and valid questions and observations.

I will see if I can get hold of the T's and C's for everything and then share back, it might add a different complexion on things

[anonymous-user]

If you get private fuel paid for, that'll be more than £100 per month in tax (at 40%), so your £325 becomes less than £225. According to http://comcar.co.uk/fuel/benefit, with a basic Audi A4 diesel, you'd need to do 27k private miles to get your money back. And next tax year it gets worse.