Company Car or Buy One

[woody2846]

Hi Guys, fairly new here (rejoined after few years away from the mighty PH)
Question for all you petrol heads out there...
I currently run a company car with a private fuel allowance. However I have now moved very near work and am wondering if to rid of the Tax Monster.

I don't do many miles so fuel isn't an issue if I buy a car, however not that old at 25 and having a company car for the last 8 years I need to bear in mind insurance.

Budget-I don't need anything fantastic but with a bit of zip so probally £1k-£1.5k I was thinking a 205GTI but what do you think?

Or shall I just stick with the company car and fuel?

Thanks for your help in advance guys and gals.

[Gruber]

Welcome!

Summing up your post, it appears to say: "should I buy one of the greatest hot hatches ever made or should I continue to pay oodles of tax on a boring company car I don't really need"?

Hmmm. A tough one.

[woody2846]

Haha, seems your suggesting the 205 then.............

[Deva Link]

Check how much your insurance will be. You should be able to use 5 years no cliams (assuming you haven't claimed for 5yrs) if your company's insurer will provide a supporting letter. But depending on the car, and where you live etc etc you could find your company car tax is less than your insurance quote - never mind all the other costs.

We had a massive issue with this when we pushed people to opt out of their company cars - it's fine for a 35yr old married bloke with kids living in the country but the younger guys living in big cities were getting huge quotes.

Also, will you be getting a car allowance from work? Many companies have rules about the age of the car and number of doors which might rule out a 205GTi

[woody2846]

Hi Deva Link,
Insurance for me on a GTI was around £700 which is livable. I live in Surrey so not too bad in terms of insurance risk.
The Car tax isn't too bad it's the fuel tax and car combined which hurts and I have to have both. I can't opt out of the fuel allowance.
Nope no car allowance so free to choose whichever lil beauty I wish.
Good point about the no clams I hadn't thought about that...thanks may just owe you a beer for that one!

[Deva Link]

Normally if you have a company car then there's also a cash allowance available if you opt out.

Generally, for a 20% tax payer it's an absolute no-brainer to keep the company car. For a 40% taxpayer, probably also with a more expensive and higher tax rate car, then the calculation becomes a bit more tricky.

What kind of company car do you have? If you're only saving is in tax, and there's no upside from an allowance, then it can't possibly make any financial sense to opt out. OK, you have other reasons, but you're surely going to be a lot worse off buying and running your own car?

There are non-money benefits too - you can park it where you like without worrying about it getting dented, if someone breaks into it or steals it then it's not your problem etc etc.