Car Allowance vs Company Car
Discussion
Is there a point where it makes sense (financial or otherwise) to opt for one over the other when it comes to allowance vs. company car?
We seem to be agreed that 20,000 miles is the magic number for diesel over petrol (keep disagreement to this for another thread), so are there similar points where it's preferable to opt for one benefit over another?
Over to the wisdom of PH.
We seem to be agreed that 20,000 miles is the magic number for diesel over petrol (keep disagreement to this for another thread), so are there similar points where it's preferable to opt for one benefit over another?
Over to the wisdom of PH.
Depends how much they propose giving you.
What likely mileage? If it is going to be high miles then letting someone else pay for services, tyres and depreciation might be more attractive.
Are there any rules on the type of car you would have to run? If you always have to run an up-to three year old saloon then letting the company run it might work out better.
I took the allowance ten years ago. Mine was sufficient to just about cover the costs on the vehicle I chose to run and the business mileage was low enough. Just as well as our allowance doesnt cover the fuel of an Evo.
What likely mileage? If it is going to be high miles then letting someone else pay for services, tyres and depreciation might be more attractive.
Are there any rules on the type of car you would have to run? If you always have to run an up-to three year old saloon then letting the company run it might work out better.
I took the allowance ten years ago. Mine was sufficient to just about cover the costs on the vehicle I chose to run and the business mileage was low enough. Just as well as our allowance doesnt cover the fuel of an Evo.
I presume business fuel will be paid, though?
I think that when you run the numbers - including depreciation - it will be a close thing. You'd need to balance the costs against the tax you wouldn't pay for the BIK of the company car.
Run the numbers through an online PAYE calculator to see your take-home pay in each case.
I think that when you run the numbers - including depreciation - it will be a close thing. You'd need to balance the costs against the tax you wouldn't pay for the BIK of the company car.
Run the numbers through an online PAYE calculator to see your take-home pay in each case.
rsv gone! said:
I presume business fuel will be paid, though?
I think that when you run the numbers - including depreciation - it will be a close thing. You'd need to balance the costs against the tax you wouldn't pay for the BIK of the company car.
Run the numbers through an online PAYE calculator to see your take-home pay in each case.
I've done that and it really is too close to call. Hence me asking what the "tipping point" is where you opt for one over the other.I think that when you run the numbers - including depreciation - it will be a close thing. You'd need to balance the costs against the tax you wouldn't pay for the BIK of the company car.
Run the numbers through an online PAYE calculator to see your take-home pay in each case.
Yes, business miles would be paid.
I suspect a What Car thread may be on the horizon too.
In the process of moving back to company car scheme from a personal lease funded by my car allowance.
Sums are difficult, but for me it all comes down to risk of unexpected costs.
I'm doing more miles than I had expected, the company car is a lower risk option and I would say that this alone is worth about £60 per month to me.
Sums are difficult, but for me it all comes down to risk of unexpected costs.
I'm doing more miles than I had expected, the company car is a lower risk option and I would say that this alone is worth about £60 per month to me.
I've previously gone from company car to car allowance and would be reluctant to go back. Having said that, I hardly do any business miles and it's just a 'salary top up'.
For me if I was doing a lot of business miles then I'd consider it but I'd hope to still be able to keep a toy in the garage for the weekends as I'd probably look to have something like a Golf Bluemotion or Eco-BMW as a company vehicle (depending on what's on the list) to keep the tax burden down.
For me if I was doing a lot of business miles then I'd consider it but I'd hope to still be able to keep a toy in the garage for the weekends as I'd probably look to have something like a Golf Bluemotion or Eco-BMW as a company vehicle (depending on what's on the list) to keep the tax burden down.
MagicalTrevor said:
For me if I was doing a lot of business miles then I'd consider it but I'd hope to still be able to keep a toy in the garage for the weekends as I'd probably look to have something like a Golf Bluemotion or Eco-BMW as a company vehicle (depending on what's on the list) to keep the tax burden down.
That's what I'm considering. I'll certainly be keeping the MX-5 in the garage (SORN for 6 months a year most likely) and getting a low-tax company car option.The clincher might just be the insurance. Taking the allowance and buying a used car, I'd not be able to extend my 12+ years NCB to the 3rd car.
Decisions, decisions...
BTW, thanks for all replies so far.
I don't have the option in my job, but I do about 30,000 miles so not sure if it would be worth it anyway. I'm always interested to hear how these things work out though. Personally I like the lack of surprise bills having a company car (and I've had a couple of fairly big breakdowns on previous company cars). I don't bother with a fuel card and I find I'm slightly in pocket at current prices/mpg so paying around £180 a month in tax for a 320d Touring I can't grumble. It's a decent enough car and I'd need an estate anyway, so I'm not sure what else I'd buy given completely free reign (I've had a Passat and A4 estates before this one too). Plus it leaves me free to run my Z3 3.0 and my RS2000 as weekend toys. That's more important to me than saving a few pounds having a car allowance instead of company car, or having a bit more choice for my daily 'shed'.
I've just landed a new job, and the company pays an allowance plus mileage.
The crucial thing I'm finding at the moment is that the company has adopted the inland revenue recommended rates implemented on June 1st this year. This sees varying rates paid dependant on fuel type chosen and engine displacement. There is a link in my recent what car thread.
So, what's your company paying per mile if you take the allowance? Does this affect the figures? It has for me.
The crucial thing I'm finding at the moment is that the company has adopted the inland revenue recommended rates implemented on June 1st this year. This sees varying rates paid dependant on fuel type chosen and engine displacement. There is a link in my recent what car thread.
So, what's your company paying per mile if you take the allowance? Does this affect the figures? It has for me.
I've just gone from a company 2011 320ed to buying and running my own car. I much prefer the latter so far because at 45p per mile I am making significant profit on my fuel (diesel) up to 10k miles.
Make no mistake though, running your own car certainly is costing me in the region of £7k a yr if not slightly more
Make no mistake though, running your own car certainly is costing me in the region of £7k a yr if not slightly more
From what I've seen, if you're going to buy a brand new reasonably economical car anyway and cover big mileages in it, it's often worth getting it through the company car scheme. If you aren't, take the cash. I can comfortably run my Elise (including depreciation) on less than half my gross company car allowance (which is a bit less than yours); so it falls comfortably within the net allowance, even if it's paid into the top tax rate.
Chr1sch said:
I've just gone from a company 2011 320ed to buying and running my own car. I much prefer the latter so far because at 45p per mile I am making significant profit on my fuel (diesel) up to 10k miles.
Make no mistake though, running your own car certainly is costing me in the region of £7k a yr if not slightly more
However, you are only taking into account fuel, whereas over 10,000 miles there would be a proportion of tyre wear, servicing and depreciation to take into account above and beyond your personal use would cause, so not all 'profit'. Over three years your car will have an extra 30,000 miles over your own use so worth taking this into account when doing the sums, though I'm no accountant, so I standby waiting for some proper figures to back up (or not) these figures.Make no mistake though, running your own car certainly is costing me in the region of £7k a yr if not slightly more
I didn't look to see what car you in your profile, so I presume it's something much more exciting than a 320ed which may well make the extra cost to you justified in PH terms anyway.
When people are quoting mileage, are they talking what they do purely for business or in total as it must make some difference to the sums: As a company car driver any private mileage I do only costs me fuel and at present it's slightly subsidised by what I can claim back per mile for the business use (no fuel car to avoid the tax as low personal miles in my case).
Pints said:
Let's assume:
It depends almost entirely on the car. If you have no restrictions, you could, if you wanted, get something perfectly serviceable for £1k or so, and even if it cost you £100 a month in repairs you'd still pocket over £3k a year. £1k cars can be quite presentable now - http://beta.pistonheads.com/classifieds/used-cars/... for example.- 20k miles a year
- £5.5k a year (pre tax) allowance
- Wide range of cars to choose from (no special restrictions regarding CO2, mpg, etc.)
- Fuel costs not covered (benefit rather than needs allowance)
If your £1k car falls apart completely, you can just get another.
I know I'd work out how much I had a month and look what I could buy for that, but ultimately the £1k car route is the best way to get to keep the cash
I'd steer clear of a lease if I were getting a new one and get a loan to buy something instead because that way you have an asset you can sell if you leave the job. Apologies if that's obvious - worked with someone who couldn't leave a job he disliked because of car allowance / lease issues
Gassing Station | General Gassing | Top of Page | What's New | My Stuff