Advice Please. Company car, lease car or own outright?
Discussion
Hi - hopefully you can give me some constructive comments.
My current situation is that I own an 11 year old E Class with 200,000 miles on the clock I am the second owner, my father in law was the first. The car has been well maintained. I've owned it for 7 years and it has been relatively reliable.
I drive approximately 35,000 miles a year on business.
I get £6000 a year car allowance and claim £0.15 per mile from my employer and claim tax relief from HMRC based on their £0.45/0.25 mileage rates.
The Company I work for do not have any restrictions on age of vehicle provided by me.
I am a 40% taxpayer.
Sooner or later the Mercedes will spit out a repair that makes me decide to get rid. I've no idea what to do for the best when it does. Do I buy another 2/3 year old car outright (if so, what do I buy) and do the same again or am I better with a lease or Company Car?
My current situation is that I own an 11 year old E Class with 200,000 miles on the clock I am the second owner, my father in law was the first. The car has been well maintained. I've owned it for 7 years and it has been relatively reliable.
I drive approximately 35,000 miles a year on business.
I get £6000 a year car allowance and claim £0.15 per mile from my employer and claim tax relief from HMRC based on their £0.45/0.25 mileage rates.
The Company I work for do not have any restrictions on age of vehicle provided by me.
I am a 40% taxpayer.
Sooner or later the Mercedes will spit out a repair that makes me decide to get rid. I've no idea what to do for the best when it does. Do I buy another 2/3 year old car outright (if so, what do I buy) and do the same again or am I better with a lease or Company Car?
alex290568 said:
Hi - hopefully you can give me some constructive comments.
My current situation is that I own an 11 year old E Class with 200,000 miles on the clock I am the second owner, my father in law was the first. The car has been well maintained. I've owned it for 7 years and it has been relatively reliable.
I drive approximately 35,000 miles a year on business.
I get £6000 a year car allowance and claim £0.15 per mile from my employer and claim tax relief from HMRC based on their £0.45/0.25 mileage rates.
The Company I work for do not have any restrictions on age of vehicle provided by me.
I am a 40% taxpayer.
Sooner or later the Mercedes will spit out a repair that makes me decide to get rid. I've no idea what to do for the best when it does. Do I buy another 2/3 year old car outright (if so, what do I buy) and do the same again or am I better with a lease or Company Car?
Assuming you are a 40% tax payer then a £6k car allowance gives you £290 cash per month. With that level of mileage leases are going to be high meaning I would guess your choice is between buying outright and a company car.My current situation is that I own an 11 year old E Class with 200,000 miles on the clock I am the second owner, my father in law was the first. The car has been well maintained. I've owned it for 7 years and it has been relatively reliable.
I drive approximately 35,000 miles a year on business.
I get £6000 a year car allowance and claim £0.15 per mile from my employer and claim tax relief from HMRC based on their £0.45/0.25 mileage rates.
The Company I work for do not have any restrictions on age of vehicle provided by me.
I am a 40% taxpayer.
Sooner or later the Mercedes will spit out a repair that makes me decide to get rid. I've no idea what to do for the best when it does. Do I buy another 2/3 year old car outright (if so, what do I buy) and do the same again or am I better with a lease or Company Car?
The choice is ultimately yours and will depend on how your company car scheme works. I have the same level of car allowance and take the money as I wanted the flexibility to choose a car I wanted rather than look for low CO2 cars to minimise the tax bill. But then, I do very little business mileage. With you level of mileage then a fully funded company car must surely work out cheaper than the wear and tear, depreciation, service costs etc on your own?
I was in a very similar situation a few months ago (slightly less miles at approx 30k). I went for the company car in the end (Skoda Superb on its way, BMW X1 in the meantime).
I did work out that sourcing my own car could potentially have been cheaper with a very reliable car and when the tax rebate is taken into account, however, I wanted to go with a low risk approach. Sadly my company don't offer hybrids, which would have made it a lot cheaper.
I did work out that sourcing my own car could potentially have been cheaper with a very reliable car and when the tax rebate is taken into account, however, I wanted to go with a low risk approach. Sadly my company don't offer hybrids, which would have made it a lot cheaper.
I do fewer miles than you but have made a similar decision a few times in the past.
I got rid of an old privately owned BMW and took the company car. I got bored of it so at the end of the lease I took the allowance and bought another car.
This car I still have as I like it but I convinced myself I would be better with another company car. Had that for a few years and have not long ago gone back on the allowance as it allows me to drive a car I actually want.
I got rid of an old privately owned BMW and took the company car. I got bored of it so at the end of the lease I took the allowance and bought another car.
This car I still have as I like it but I convinced myself I would be better with another company car. Had that for a few years and have not long ago gone back on the allowance as it allows me to drive a car I actually want.
I have a hybrid on order but my old A5 diesel went in December, the reduction in tax and the car allowance (also £6k) is making me regret my decision to order another company car which i'll have for 4 years, work pay me £0.20p per mile and can claim the difference from the revenue as stated, i'm currently in a leased Cupra 290 paying £195 a month lease, £56 insurance and fuel is more than covered to run this and the wifes with the £0.20p....
I don't do as many business miles as you, around 12k a year but this car is used purely for work currently, i'm pushed back the delivery of my 330e until March to make the most of the cash allowance, if things change and im allowed to get out of my lease then i'll seriously consider the cash option.
My problem was i've had a company car for 15 years and was scared to take the jump!
I don't do as many business miles as you, around 12k a year but this car is used purely for work currently, i'm pushed back the delivery of my 330e until March to make the most of the cash allowance, if things change and im allowed to get out of my lease then i'll seriously consider the cash option.
My problem was i've had a company car for 15 years and was scared to take the jump!
If you are now consistently covering 35,000miles per year, any newish car will depreciate very sharply and as commented above, lease companies will reflect this in their monthly rentals.
I think I would continue with your E class until it dies and then buy another one. I don't know if the newer Mercs offer the same longevity or reliability as the older ones.
A friend of mine does a similar number of business miles in his 2004 E Class diesel. He is the 2nd owner too, but his car has done over 300,000 miles and it's still going well. He changes the engine oil every 6000 miles and the gearbox/diff oils every 30,000 miles. He swears by this frequent servicing policy that was learned from his many years of experience as the workshop manager of a transport company (with about 150 assorted vehicles). This is his 2nd E class diesel, the previous one was identical, but a couple of years older. He sold the 1st one to a taxi driver!
I think I would continue with your E class until it dies and then buy another one. I don't know if the newer Mercs offer the same longevity or reliability as the older ones.
A friend of mine does a similar number of business miles in his 2004 E Class diesel. He is the 2nd owner too, but his car has done over 300,000 miles and it's still going well. He changes the engine oil every 6000 miles and the gearbox/diff oils every 30,000 miles. He swears by this frequent servicing policy that was learned from his many years of experience as the workshop manager of a transport company (with about 150 assorted vehicles). This is his 2nd E class diesel, the previous one was identical, but a couple of years older. He sold the 1st one to a taxi driver!
I was in a very similar position to yours, albeit 20% tax bracket & not having a particularly reliable car before being given the choice.
I went for a Golf GTD, I’ve covered just over 35,000 miles in a year. It’s had 3 tyres due to punctures, had its first service and rapidly approaching the second where it will need the gearbox oil changing, and it’s not cost me a penny outside of the extra tax.
Personally, I’m glad I went the route I did. I think the hit I would have taken on depreciation & the running costs in the last year, plus the insurance etc I’d have to foot them I would be out of pocket compared.
I went for a Golf GTD, I’ve covered just over 35,000 miles in a year. It’s had 3 tyres due to punctures, had its first service and rapidly approaching the second where it will need the gearbox oil changing, and it’s not cost me a penny outside of the extra tax.
Personally, I’m glad I went the route I did. I think the hit I would have taken on depreciation & the running costs in the last year, plus the insurance etc I’d have to foot them I would be out of pocket compared.
I'd say get yourself another E Class but this time look for a low mileage E300cdi being a Hybrid it meets any requirements ala the T Charge etc.
https://www.autotrader.co.uk/classified/advert/201...
https://www.autotrader.co.uk/classified/advert/201...
https://www.autotrader.co.uk/classified/advert/201...
https://www.autotrader.co.uk/classified/advert/201...
I'd also vote for another car yourself.
I've never needed a company car myself but have colleagues and friends who do and one of the most common issues that arise is when they need to make a jump out of the company car scheme or change jobs which doesn't offer a car and suddenly they are without a car and have to start finding the funds for one from scratch.
If you go down the company car route, squirrel away an amount you are comfortable with every month so if/when it happens to you, you can buy yourself a car without impacting on your lifestyle at the time.
I've never needed a company car myself but have colleagues and friends who do and one of the most common issues that arise is when they need to make a jump out of the company car scheme or change jobs which doesn't offer a car and suddenly they are without a car and have to start finding the funds for one from scratch.
If you go down the company car route, squirrel away an amount you are comfortable with every month so if/when it happens to you, you can buy yourself a car without impacting on your lifestyle at the time.
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