What car to fit my allowance and HMRC mileage rate?

[eltax91]

Hi all

I have recently secured a new job, which starts in 2 weeks. The job comes with a car allowance, which after tax equates to £600 pcm. I would like to finance a car on no more than £450 pcm (ideally over 2 years so I can change again), so with my Octavia as a £3k deposit I'm looking at a car value of around £13-£15k. The remaining allowance can be used for maintaining my Landy.

Now, the company pays mileage based on the new HMRC rules as of 1st June 2012:- http://www.hmrc.gov.uk/cars/advisory_fuel_current....

So, this mean my current Octavia (1.9TDi) gets 15ppm, a Diesel over 2litre would attract 18ppm and a >2litre petrol would pay at 26ppm. So, my quandry is whether to go for petrol or diesel. I'm home based and am working my calculation at a conservative 20k business miles p.a. My man maths reads as below:-



Any comments on my man maths. Are the mpg estimates accurate?

So, my requirements are:-

• Reliability
• Comfort (all miles will be motorway)
• 4/5 Door and room for my new born

The company has one rule for the generous allowance "No crappy old sheds". So, I assume, the older it gets, the more "premium" it needs to be. So, a 2 year old VAG, or a 5 year old BMW etc

What would you do with my budget?

• Keep the Octavia and mask its age with a private plate (some people in the new place have seen my car already though)
• Replace with a > 2litre Diesel
• Replace with a > 2litre Petrol

And, naturally, which car would you choose?

Edited by eltax91 on Tuesday 26th June 09:38

[300bhp/ton]

eltax91 said:

Hi all

I have recently secured a new job, which starts in 2 weeks. The job comes with a car allowance, which after tax equates to £600 pcm. I would like to finance a car on no more than £450 pcm (ideally over 2 years so I can change again), so with my Octavia as a £3k deposit I'm looking at a car value of around £13-£15k. The remaining allowance can be used for maintaining my Landy.

Now, the company pays mileage based on the new HMRC rules as of 1st June 2012:- http://www.hmrc.gov.uk/cars/advisory_fuel_current....

So, this mean my current Octavia (1.9TDi) gets 15ppm, a Diesel over 2litre would attract 18ppm and a >2litre petrol would pay at 26ppm. So, my quandry is whether to go for petrol or diesel. I'm home based and am working my calculation at a conservative 20k business miles p.a. My man maths reads as below:-



Any comments on my man maths. Are the mpg estimates accurate?

So, my requirements are:-

• Reliability
• Comfort (all miles will be motorway)
• 4/5 Door and room for my new born

The company has one rule for the generous allowance "No crappy old sheds". So, I assume, the older it gets, the more "premium" it needs to be. So, a 2 year old VAG, or a 5 year old BMW etc

What would you do with my budget?

• Keep the Octavia and mask its age with a private plate (some people in the new place have seen my car already though)
• Replace with a > 2litre Diesel
• Replace with a > 2litre Petrol

And, naturally, which car would you choose?

Edited by eltax91 on Tuesday 26th June 09:38

Citroen C6 2.7 Hdi diesel. Posh, new, hugely comfy and well equipped, higher ppm rate and fairly good on fuel. If you slap a private plate on it (or even an old suffix plate), nobody will know it's not brand new. And you can pick them up (with a bit of hunting) form £6000-8000 (iirc).

[parapaul]

Firstly, are you happy with the Octavia? You'll lose more by changing than you'll ever save.

I'd be tempted to do exactly what you propose and get something shiny and new (to me)

[kambites]

I'd probably do nothing; why on earth would you want to change the plate on the Octavia if you decide to keep it?

If you're going to change, I'd be going for something like a 330i. Should give (much) more than 26mpg on the motorway.

[eltax91]

kambites said:

I'd probably do nothing; why on earth would you want to change the plate on the Octavia if you decide to keep it?

If you're going to change, I'd be going for something like a 330i. Should give (much) more than 26mpg on the motorway.

Changing the plate would be to hide it's age. It's the last of the MK1 Octavia, on a 54 plate. This makes it 8 years old. In my eyes, it's low mileage (77k), reliable and perfect for the job. In the eyes of a non petrol head boss, it's bordering on "old shed" territory. A 54 plated car would leave me with the 2nd oldest car in the UK team. The only older one is a 7 series run by a colleague.

In answer to the previous poster, yes I love the Octavia. It's been a great tool for my current job, but the new one is financially more lucrative, so I wouldn't mind a change.

My main quandry at the moment is if I do change, should I go petrol or diesel. It seems to me the petrol leaves me slightly down "net", but the petrol will be newer and much less likely to have a turbo go (since it won't have one) and will be cheaper to run overall and probably more fun.

[Zigster]

I think you're being pessimistic about the mpg from a 2l petrol.

I just got rid of a 2002 A4 Avant 2.4 V6 with the multitronic gearbox - not known for being economical - and I was getting closer to 30mpg and that included a lot of driving around London.

A modern petrol engine should get quite a bit more than 26mpg, particularly if you're doing lots of long trips - I'd guess at well over 30mpg. Might make the sums tip towards a petrol engine.

[kambites]

eltax91 said:

Changing the plate would be to hide it's age. It's the last of the MK1 Octavia, on a 54 plate. This makes it 8 years old. In my eyes, it's low mileage (77k), reliable and perfect for the job. In the eyes of a non petrol head boss, it's bordering on "old shed" territory. A 54 plated car would leave me with the 2nd oldest car in the UK team. The only older one is a 7 series run by a colleague.

But why does it matter whether you manager thinks your car is an old shed? Do you drive customers around or something?

[eltax91]

kambites said:

But why does it matter whether you manager thinks your car is an old shed? Do you drive customers around or something?

I will do a lot of work on site. 4 days most weeks. Occasionally customers are ferried around, but not often. They pay a generous car allowance, but it comes with rules. I think their main concerns are around unreliability, if I break down, they potentially lose cash (as would I in bonuses), the older and "sheddier" (sic) a car, the more likely a breakdown will occur. If said breakdown puts me off the road for a week, that's potentially more lost business.

It's not lost on me that my Octavia is probably more reliable than any of the more modern cars that the others drive, but, if you comply to the rules (this allowance is quite generous for my industry), then it seems they feel it's "unlucky" when you break down. Sad, but that's how it is.

I am toying with the idea of trying to convince him that I can keep the Octavia and fund 2 cars from the allowance, thus negating more than 1 day of loss through a breakdown (get towed to a garage and use the spare car till it's fixed). I don't want to get all jumped up about it before I start, so I'd like to be prepared at least with my options.