Company Car Conundrum Confuses
Discussion
After many months of uncertainty I am being offered a choice of either - Toyota Avensis, Toyota Prius or an allowance of £400 per month for servicing, consumables etc. on a car of my choosing (and buying!)
Fuel is paid for and is not included in the monthly figure.
What is my best option? Will be covering around 40,000 miles per year and dont fancy driving a Toyota...
Fuel is paid for and is not included in the monthly figure.
What is my best option? Will be covering around 40,000 miles per year and dont fancy driving a Toyota...
Bisonhead said:
After many months of uncertainty I am being offered a choice of either - Toyota Avensis, Toyota Prius or an allowance of £400 per month for servicing, consumables etc. on a car of my choosing (and buying!)
Fuel is paid for and is not included in the monthly figure.
What is my best option? Will be covering around 40,000 miles per year and dont fancy driving a Toyota...
40000 miles a year and honestly contemplating using your own car? You must be mad. Servicing and repair work will kill your £400 a month (dont forget your allowance will be taxed as well). So who is going to pay for the car, and who is picking up the bill for depreciation?Fuel is paid for and is not included in the monthly figure.
What is my best option? Will be covering around 40,000 miles per year and dont fancy driving a Toyota...
£400 a month (munus tax) is not enough to buy/run/maintain and offset depreciation on a car thats capable of soaking up 40k a year. Get someone else to pay for it. Opt for the Prius.
Why Prius>? You will save £4000 a year on taxation on the Prius, money which you can spend on long haukl flights to the sun......
He who laughs last, laughs longest
OP,
Take the p11d value of the Avensis. Work out the company car tax (BiK). That is how much it will cost you to drive works car (for the purpose of work), that the taxman thinks you enjoy.
now, take our tax band, and take that off 400 quid.
Add the Bik to the 400 quid less tax, thats what you have per month to buy (I assume lease), insure, tax, and service a 2nd hand car. Assuming you're on 22% tax (can't think many 50k plus people are in Avensis'), you have about 470 quid per month to do 40,000 miles.
So, assume in 40k you do 1 set of tyres (500 quid?), and 1.5 services (600 quid?), 125 quid tax, 800 quid insurance, 100 quid bits (AA, oil, wiper blades, screenwash etc), it leaves you with about 290 quid per month to lease a car. not a great load, and it all assumes you're lucky enough to not have any unexpected bills. IF you have the cash available to just buy a car, you have 3450 ish per year for depreaciation, plus lost interest on whatever you outlay.
If it were me, I'd go for the Toyota. 40k per year is a lot, just make sure you get cruise control!
Take the p11d value of the Avensis. Work out the company car tax (BiK). That is how much it will cost you to drive works car (for the purpose of work), that the taxman thinks you enjoy.
now, take our tax band, and take that off 400 quid.
Add the Bik to the 400 quid less tax, thats what you have per month to buy (I assume lease), insure, tax, and service a 2nd hand car. Assuming you're on 22% tax (can't think many 50k plus people are in Avensis'), you have about 470 quid per month to do 40,000 miles.
So, assume in 40k you do 1 set of tyres (500 quid?), and 1.5 services (600 quid?), 125 quid tax, 800 quid insurance, 100 quid bits (AA, oil, wiper blades, screenwash etc), it leaves you with about 290 quid per month to lease a car. not a great load, and it all assumes you're lucky enough to not have any unexpected bills. IF you have the cash available to just buy a car, you have 3450 ish per year for depreaciation, plus lost interest on whatever you outlay.
If it were me, I'd go for the Toyota. 40k per year is a lot, just make sure you get cruise control!
Some Gump said:
OP,
Take the p11d value of the Avensis. Work out the company car tax (BiK). That is how much it will cost you to drive works car (for the purpose of work), that the taxman thinks you enjoy.
now, take our tax band, and take that off 400 quid.
Add the Bik to the 400 quid less tax, thats what you have per month to buy (I assume lease), insure, tax, and service a 2nd hand car. Assuming you're on 22% tax (can't think many 50k plus people are in Avensis'), you have about 470 quid per month to do 40,000 miles.
So, assume in 40k you do 1 set of tyres (500 quid?), and 1.5 services (600 quid?), 125 quid tax, 800 quid insurance, 100 quid bits (AA, oil, wiper blades, screenwash etc), it leaves you with about 290 quid per month to lease a car. not a great load, and it all assumes you're lucky enough to not have any unexpected bills. IF you have the cash available to just buy a car, you have 3450 ish per year for depreaciation, plus lost interest on whatever you outlay.
If it were me, I'd go for the Toyota. 40k per year is a lot, just make sure you get cruise control!
Lease on 40k a year?Take the p11d value of the Avensis. Work out the company car tax (BiK). That is how much it will cost you to drive works car (for the purpose of work), that the taxman thinks you enjoy.
now, take our tax band, and take that off 400 quid.
Add the Bik to the 400 quid less tax, thats what you have per month to buy (I assume lease), insure, tax, and service a 2nd hand car. Assuming you're on 22% tax (can't think many 50k plus people are in Avensis'), you have about 470 quid per month to do 40,000 miles.
So, assume in 40k you do 1 set of tyres (500 quid?), and 1.5 services (600 quid?), 125 quid tax, 800 quid insurance, 100 quid bits (AA, oil, wiper blades, screenwash etc), it leaves you with about 290 quid per month to lease a car. not a great load, and it all assumes you're lucky enough to not have any unexpected bills. IF you have the cash available to just buy a car, you have 3450 ish per year for depreaciation, plus lost interest on whatever you outlay.
If it were me, I'd go for the Toyota. 40k per year is a lot, just make sure you get cruise control!
deltashad said:
I'd go for the Avensis, it's a super cool motorway mile eater. Great fun on the B roads and everytime you open the curtains in the morning you'll be reaching for the key fob, bucket and polish.
Ha Ha!Boss was considering waiting for new 318d but decided against as he thought people wouldnt react well to a 'lower model'
Well Ill tell you what I did with similar options
we get 550 a month plus 45p for 10k miles then 25p there after.
We are allowed to buy what we want
I buy a car that is one year old so a big hit of depreciation is gone. then I keep it for 2-3 years sell it buy another.
For instance I bought my 407 11 months old for 8.5k from a main dealer was an ex demo car.
this way it more than pays for itself.
not the most exciting of cars but I don't want to piss money up the wall for a work car.
looking to replace it some time soon not sure what with yet probably an insignia hopefully for around 10k
we get 550 a month plus 45p for 10k miles then 25p there after.
We are allowed to buy what we want
I buy a car that is one year old so a big hit of depreciation is gone. then I keep it for 2-3 years sell it buy another.
For instance I bought my 407 11 months old for 8.5k from a main dealer was an ex demo car.
this way it more than pays for itself.
not the most exciting of cars but I don't want to piss money up the wall for a work car.
looking to replace it some time soon not sure what with yet probably an insignia hopefully for around 10k
Edited by Pesty on Monday 20th February 15:41
Pesty said:
Well Ill tell you what I did with similar options
we get 550 a month plus 45p for 10k miles then 25p there after.
We are allowed to buy what we want
I buy a car that is one year old so a big hit of depreciation is gone. then I keep it for 2-3 years sell it buy another.
For instance I bought my 407 11 months old for 8.5k from a main dealer was an ex demo car.
this way it more than pays for itself.
not the most exciting of cars but I don't want to piss money up the wall for a work car.
looking to replace it some time soon not sure what with yet probably an insignia hopefully for around 10k
He has a petrol card so wont be getting 45p a mile.....we get 550 a month plus 45p for 10k miles then 25p there after.
We are allowed to buy what we want
I buy a car that is one year old so a big hit of depreciation is gone. then I keep it for 2-3 years sell it buy another.
For instance I bought my 407 11 months old for 8.5k from a main dealer was an ex demo car.
this way it more than pays for itself.
not the most exciting of cars but I don't want to piss money up the wall for a work car.
looking to replace it some time soon not sure what with yet probably an insignia hopefully for around 10k
Edited by Pesty on Monday 20th February 15:41
The issue here is his annual milage, 40k a year is hard to swallow, and wont be covered by warranty within months (ok, you can get cars with 100k warranties, but not something he'd want to own).
So if he goes new, to get warranty, his depreciation after 3 years would be disasterous, on 40k milage per annum. Plus he has to fund buying the car in the first place. Wear and tear will also be considerable.
Plus insurance.....
He's ideal company car bracket, anything else is silly.
Pesty said:
Ahh I see.
They have threatened us with petrol cards but its still beneficial to us to have it like this (for now)
Hmmm Id go with an Avensis as well. or a prius for tax purposes.
Friend had a company car and petrol card, when he swapped to a £500 a month car allowance he was around £1000 ahead in hand, after his tax settled down. But he wasnt doing 40k a year, so was being heavily taxed.They have threatened us with petrol cards but its still beneficial to us to have it like this (for now)
Hmmm Id go with an Avensis as well. or a prius for tax purposes.
OP, also make sure that you get fuel card ONLY for company miles. If you have private mileage covered by company fuel card, you;re into the tax on a further 2-2.5k per year. Break even is about 10k private miles per year (but I expect that if you do 40 professionally, your company car will be the LAST place you want to be in of a weekend)!
Some Gump said:
OP, also make sure that you get fuel card ONLY for company miles. If you have private mileage covered by company fuel card, you;re into the tax on a further 2-2.5k per year. Break even is about 10k private miles per year (but I expect that if you do 40 professionally, your company car will be the LAST place you want to be in of a weekend)!
Agreed, if I do go for the Pious I certainly wont want to be seen in it socially! Will be using the Missuses car (that I also get to choose 
)You need to weigh up the tax saving of the Prius against the fact the Avensis is faster and nicer to drive (and will use less fuel when doing private miles) and make a call based on that. Bear in mind that tax will be more over the next two years on the Avensis but the Prius will be the same for the whole time too as that doesn't ramp up for the 12/13 and 13/14 tax years.
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