Car Allowance Advice
Discussion
I opted out of the company car about 6/7 years ago when the BIK for a basic Audi A4 tdi became outrageous.
Personally I try and buy a car that’s 2 /2.5 years old (just in warranty to sort out any niggles) and run it for 5 years to make sure I get my moneys worth.
I fund the car with a little cash and a bank loan to keep the interest on payments low. Last time went with a C class Mercedes (220d) as the spec and price was right.
The trick is to run it for a long time, pay the finance down to zero then P/X it for another.
Loan, insurance and maintenance are there or there abouts the post tax car allowance and when you sell / P/X that’s the profit. The BMW before the C class was 2.5 years old when I got it, paid £22,500 for it and got £12,500 when it was P/Xed for the Mercedes.
Personally I try and buy a car that’s 2 /2.5 years old (just in warranty to sort out any niggles) and run it for 5 years to make sure I get my moneys worth.
I fund the car with a little cash and a bank loan to keep the interest on payments low. Last time went with a C class Mercedes (220d) as the spec and price was right.
The trick is to run it for a long time, pay the finance down to zero then P/X it for another.
Loan, insurance and maintenance are there or there abouts the post tax car allowance and when you sell / P/X that’s the profit. The BMW before the C class was 2.5 years old when I got it, paid £22,500 for it and got £12,500 when it was P/Xed for the Mercedes.
10k la leaves you around £500 net (plus what ever the BIK was on your old company car) so perhaps £650 pm to play with. That has to cover insurance, RFL and maintenance which at 25000 per annum may include 2 services and at least 2 tyres.
£500 will get you a personal loan of maybe £20k over 4 years, more if 5 years and given the 8 year rule then i would get the lowest mileage and newest Volvo S/V 60/90 that you can.
This looks quite good to be fair and what I would be tempted by
https://www.autotrader.co.uk/car-details/202210210...
£500 will get you a personal loan of maybe £20k over 4 years, more if 5 years and given the 8 year rule then i would get the lowest mileage and newest Volvo S/V 60/90 that you can.
This looks quite good to be fair and what I would be tempted by
https://www.autotrader.co.uk/car-details/202210210...
Glutton said:
Has to be under eight years old and 110k miles. Hence the initial 1 series purchase. As much as I know I could save money by keeping an older car, I’d prefer something nicer, we are restricted on parking at home so sadly my days of having a fun weekend car are on hold certainly for the next five years or so!
If you want to keep the costs sensible (they're between 12-14k) but be in a nice place for the next 3-4 years then these are where I'd be looking to test drive.Infiniti Q70 Sport:
https://www.autotrader.co.uk/car-details/202212122...
https://www.autotrader.co.uk/car-details/202210301...
Insignia SRI Nav:
https://www.autotrader.co.uk/car-details/202212082...
https://www.autotrader.co.uk/car-details/202210210...
Mazda6 Sport Nav:
https://www.autotrader.co.uk/car-details/202211151...
508 GT:
https://www.autotrader.co.uk/car-details/202212102...
DS5 Performance Line:
https://www.autotrader.co.uk/car-details/202210261...
Boringvolvodriver said:
10k la leaves you around £500 net (plus what ever the BIK was on your old company car) so perhaps £650 pm to play with. That has to cover insurance, RFL and maintenance which at 25000 per annum may include 2 services and at least 2 tyres.
£500 will get you a personal loan of maybe £20k over 4 years, more if 5 years and given the 8 year rule then i would get the lowest mileage and newest Volvo S/V 60/90 that you can.
This looks quite good to be fair and what I would be tempted by
https://www.autotrader.co.uk/car-details/202210210...
Assuming your tax band is not higher and of course factoring in the allowance might need to cover maintenance/fuel and consumables (unless thats coming out of own pocket). In reality its never as attractive as it seems, especially if you need to use the vehicle for work and rack up the miles.£500 will get you a personal loan of maybe £20k over 4 years, more if 5 years and given the 8 year rule then i would get the lowest mileage and newest Volvo S/V 60/90 that you can.
This looks quite good to be fair and what I would be tempted by
https://www.autotrader.co.uk/car-details/202210210...
halo34 said:
Boringvolvodriver said:
10k la leaves you around £500 net (plus what ever the BIK was on your old company car) so perhaps £650 pm to play with. That has to cover insurance, RFL and maintenance which at 25000 per annum may include 2 services and at least 2 tyres.
£500 will get you a personal loan of maybe £20k over 4 years, more if 5 years and given the 8 year rule then i would get the lowest mileage and newest Volvo S/V 60/90 that you can.
This looks quite good to be fair and what I would be tempted by
https://www.autotrader.co.uk/car-details/202210210...
Assuming your tax band is not higher and of course factoring in the allowance might need to cover maintenance/fuel and consumables (unless thats coming out of own pocket). In reality its never as attractive as it seems, especially if you need to use the vehicle for work and rack up the miles.£500 will get you a personal loan of maybe £20k over 4 years, more if 5 years and given the 8 year rule then i would get the lowest mileage and newest Volvo S/V 60/90 that you can.
This looks quite good to be fair and what I would be tempted by
https://www.autotrader.co.uk/car-details/202210210...
The other consideration is what mileage rate will be paid for business miles - that can make a difference- I once had a scheme that gave an allowance of £6k and 45p a mile for the first 10k miles. That swung the equation towards your own car depending on mileage.
When I was doing 25/30k pa both business and personal mileage, the company car was the option taken although that was a few years back now thankfully.
Earlier this year my wife got a job with a £450/month car allowance, she bought herself as 2003 Mercedes CLK 240 convertible for £1,500. Completely the wrong car as far as I'm concerned but she loves it. I bought her a spare set of 2nd hand wheels and a set of new winter tyres for this winter which cost about £550.
Up to now she as banked her allowance - approx £4k.
Up to now she as banked her allowance - approx £4k.
Edited by LeadFarmer on Tuesday 13th December 10:03
LeadFarmer said:
Earlier this year my wife got a job with a £450/month car allowance, she bought herself as 2003 Mercedes CLK 240 convertible for £1,500. Completely the wrong car as far as I'm concerned but she loves it. I bought her a spare set of 2nd hand wheels and a set of new winter tyres for this winter.
Up to now she as banked her allowance - approx £4k.
Very nice! I do wonder why companies don’t stipulate a age in many cases, in my company all the company cars are 4 years old max, but if you take a allowance you can have a however old you like Up to now she as banked her allowance - approx £4k.
Nickbrapp said:
LeadFarmer said:
Earlier this year my wife got a job with a £450/month car allowance, she bought herself as 2003 Mercedes CLK 240 convertible for £1,500. Completely the wrong car as far as I'm concerned but she loves it. I bought her a spare set of 2nd hand wheels and a set of new winter tyres for this winter.
Up to now she as banked her allowance - approx £4k.
Very nice! I do wonder why companies don’t stipulate a age in many cases, in my company all the company cars are 4 years old max, but if you take a allowance you can have a however old you like Up to now she as banked her allowance - approx £4k.
On a car allowance, the responsibility is with the employee for the maintenance of the vehicle.
ConnectionError said:
Over £32.000 for a car that you will never own.
that is madness, what am I missing in my thought process?
Well I personally wouldn’t go for it but it’s just an alternative to buying.that is madness, what am I missing in my thought process?
Car costs from £49000 brand new from MB (cheapest new car deal on autotrader). RRP is a smidge under £55k.
4 years , 100k miles + tax + MOT + maintenance = £32000
So to buy a new one, assuming after your 4 years is up, it would be worth around £20k trade in. That’s impossible, if you bought it and did 100k in it , I don’t think you would get more than £14k from Wbac .
So you would have theoretically saved cash, assuming the best case scenario.
It’s not a given though
In this case a low APR PCP deal is still a better option than a lease.
I'm in exactly the same scenario as you, £10k allowance and 20-25,000 miles a year.
I first opted out three years ago, bought a 3 year old 75,000 mile 5 series touring. Bought one that had good tyres, didn't need a service for a while etc, just to cost proof it as much as possible, Ran it for a year while I racked up some benefit at the £0.45/£0.25ppm (my business mileage is around 18,000) mileage rate.
Am now in a three year old A6 Avant which the numbers are paying for and some (again, buy well to avoid costs if you can) and have found it works perfectly for me. As advised elsewhere, buying a 2-4 year old car and running it is less of a 'cash burner' than leasing. Your business mileage level within your 25,000 mile pa will also make a big difference.
Go for it, year one can feel like a minor backwards step, but after that it's fine. Oh, and also, I run a completely seperate bank account for the car, trasfer my car allowance (less Tax) into it, loan comes from it, credit card for fuel links to it, mileage claims go into it. The seperation means you always know where you are.
I first opted out three years ago, bought a 3 year old 75,000 mile 5 series touring. Bought one that had good tyres, didn't need a service for a while etc, just to cost proof it as much as possible, Ran it for a year while I racked up some benefit at the £0.45/£0.25ppm (my business mileage is around 18,000) mileage rate.
Am now in a three year old A6 Avant which the numbers are paying for and some (again, buy well to avoid costs if you can) and have found it works perfectly for me. As advised elsewhere, buying a 2-4 year old car and running it is less of a 'cash burner' than leasing. Your business mileage level within your 25,000 mile pa will also make a big difference.
Go for it, year one can feel like a minor backwards step, but after that it's fine. Oh, and also, I run a completely seperate bank account for the car, trasfer my car allowance (less Tax) into it, loan comes from it, credit card for fuel links to it, mileage claims go into it. The seperation means you always know where you are.
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