Company Car vs Buying

[MrGeoff]

As the new tax year rolls around I’m doing the sums on my company car and wondering if it really is the perk it once was. The current tax year sees me pay a tax amount of circa £200/month plus the same in fuel (pence per mile). The coming tax year 18/19 will see me paying roughly £300/month with fuel staying similar. Now I know this isn’t a huge amount but hear me out.

I work within the motor industry so I get a new car every 3 months or there about which isn’t a bad thing, I don’t have to pay insurance, VED or any upkeep on the vehicles I drive. However, I’ve started wondering if I could do all this cheaper and ditch the company car? As long as the option of buying puts me in a comfortable car which is economical, cheap to insure and tax I’m not overly concerned it’s not a brand new car. I’m handy with a set of spanners so any repairs would just be parts cost if anything did go wrong.

Has anyone done this before and been better off or am I dreaming/drunk and should just stick with the company car?

[jkh112]

I now take the cash allowance instead of a company car from my employer . I can claim 45p per mile now as well so for me it is much better and I get to drive a car I actually like.

No one answer which fits everyone, depends on what allowance you would get, what mileage rate you would be able to claim, how many company miles you do etc.

[jonwm]

I’m currently in car allowance until my company car lands, had a company car since 2002 and have always sworn by them, currently running a Cupra 290 and with that doing only 30mpg I’m coining it in with the allowance and fuel miles.

Gone from A5 with fuel card paying circa £370 a month to making about £150 a month from the allowance (£550) and £80 from the fuel, work pay 22p per mile and I do about 2k a month this is without the hmrc claim.

I guess there is risk but currently wish I’d not ordered a replacement

Edit to add I lease the Cupra so not technically brought

Edited by jonwm on Thursday 8th March 20:15

[A900ss]

jkh112 said:

I now take the cash allowance instead of a company car from my employer . I can claim 45p per mile now as well so for me it is much better and I get to drive a car I actually like.

No one answer which fits everyone, depends on what allowance you would get, what mileage rate you would be able to claim, how many company miles you do etc.

Same here. Taking allowance instead of car and full HMRC allowed mileage rates paid for my 20k business miles. Considerably better off according to my calculations as the BIK on company cars is becoming ridiculous.

[MrGeoff]

It's a tough call. I should mention that if I were to opt out I wouldn't receive an allowance, that's probably a bit of a game changer. If I were to receive an allowance then it would make it a more straight forward decision. I currently do about 18k miles a year, paying roughly 14p a mile for private use and business use (minimal) is paid for as I have a fuel card.

[Pete-mojsh]

I have a similar issue, I currently have a home based contract so I get 45p a mile for my trips to the office, I use my car for this and get a hire car for any other business mileage as my 325 isn't the most frugal. I have done about 6k in the last 10 months so that means I can ask for a review for a company car. The category of car is likely to be A3 or Golf, 1.5 tfsi engine with a BIK of around £90 pm if approved.

I would be looking to change car shortly anyway so I need to work out the what would work best for me;

Company car
Benefit of an 18 plate car
Dsg without the worry
Full maintenance
Insurance and road tax covered by work
Lower rate per mile paid for fuel expenses

The alternative is to spend a little more when changing my personal car and get a diesel that can cover my trips to the office and longer trips to clients. With around 12k per year I can claim 45p a mile that would cover a fuel bill of £1500ish (based on 45 mpg), insurance, tax, maintenance and still leave around £3k pa to cover any finance (perhaps £20-30 a month more than BIK based on the deposit I could put down on a £7.5k car).

They work out very similar, is it worth the extra to have everything covered by work so I just drive a new car and let them cover the rest? The cash from selling my current car goes in the bank whereas if I get another car to use for business it becomes a depreciating asset.

Where is the tipping point for when a company car makes sense? Of course, they may choose to not approve a company car so option 2 becomes the default choice.