Company car or Opt out..??
Discussion
Currently have a quite generous company car scheme - basically the company buys the car outright and we retain for 3 years. Currently have a Lexus IS F Sport, which is a nice daily - if a bit boring...
if i was to opt out of the scheme and simply take car allowance instead lets say it is £7000 gross P/A i could get what i wanted on the used market e.g BMW M6 E61 / M3 V8, RS5 etc, I don't do many business miles and the commute is 20 mile round trip.
I have a weekend toy which i likely would sell if i got into any of the above motors, so I would save on insurance and running costs of a second car.
My quandary is would running something like the above be ruinous? The car allowance would cover any finance for the car pretty much so then i am left with servicing and consumables and private fuel. Fuel would obviously be a significant expense but aside from this I can't see how i would be much worse off than continuing with the company car?
Any thoughts or is it a no brainier if one really wanted something brash and fast?
if i was to opt out of the scheme and simply take car allowance instead lets say it is £7000 gross P/A i could get what i wanted on the used market e.g BMW M6 E61 / M3 V8, RS5 etc, I don't do many business miles and the commute is 20 mile round trip.
I have a weekend toy which i likely would sell if i got into any of the above motors, so I would save on insurance and running costs of a second car.
My quandary is would running something like the above be ruinous? The car allowance would cover any finance for the car pretty much so then i am left with servicing and consumables and private fuel. Fuel would obviously be a significant expense but aside from this I can't see how i would be much worse off than continuing with the company car?
Any thoughts or is it a no brainier if one really wanted something brash and fast?
Pegscratch said:
Yes ruinous, also beware policies limiting age/engine size, and if you have to be aware of any unwritten policies either fairly or unfairly about the "image" you present when attending clients if you do so.
Yes appreciate this - the car itself isn't an issue there are Porsches and a Maserati here (sadly new and i couldn't afford either!) but where there is a rule for one....Hi
On top of the £7k you'll save a shed load of Tax plus there's the tax rebate on any business miles too (Unless work pay the full 45ppm that is..)
So did exactly this myself as soon as the option presented itself and was on it for a few years.
It was presented to us as the opportunity to being able to finance, and own, an A4 for the same net income as having a company Passat.
And the maths worked out to be about true
So thinking 'Why am I bothered about having a brand new car to knock about in for work?'
I did the following over around 5 years:-
Ran a couple of 'bought at 3 year old and run for 2 more' reasonable but not OTT daily drivers, plus bought SWMBO a couple of nice but also not OTT daily drivers and seriously upped the toy box... and basically the car allowance paid for all of it..
So if you're not bothered about it being new it can work massively in your favour.
Plus when, one day, work goes pear shaped on you, the car sat outside your house is yours and it's paid for..
On top of the £7k you'll save a shed load of Tax plus there's the tax rebate on any business miles too (Unless work pay the full 45ppm that is..)
So did exactly this myself as soon as the option presented itself and was on it for a few years.
It was presented to us as the opportunity to being able to finance, and own, an A4 for the same net income as having a company Passat.
And the maths worked out to be about true
So thinking 'Why am I bothered about having a brand new car to knock about in for work?'
I did the following over around 5 years:-
Ran a couple of 'bought at 3 year old and run for 2 more' reasonable but not OTT daily drivers, plus bought SWMBO a couple of nice but also not OTT daily drivers and seriously upped the toy box... and basically the car allowance paid for all of it..
So if you're not bothered about it being new it can work massively in your favour.
Plus when, one day, work goes pear shaped on you, the car sat outside your house is yours and it's paid for..
Jim Spencer said:
On top of the £7k you'll save a shed load of Tax plus there's the tax rebate on any business miles too (Unless work pay the full 45ppm that is..)
A quick Google suggests £286pcm BIK tax (assuming higher rate taxpayer) added to £320pcm from the allowance gives a budget of £606pcm, which assumes no profit on the mileage. OP also consider that the mileage rate may not cover your petrol costs if you do get something fruity. I'm currently averaging 16mpg in my car and the 20p per mile from my firm does not cover my petrol costs when driving for work. Clearly, it was my choice to buy a stupid car, but it does grate occasionally, although I don't really do many company miles so not a big issue.
The other thing to consider is that once you're out of the scheme it's very difficult to go back in. I take the allowance and enjoy doing so, but have occasionally considered opting back in so I can waft around in nice 5 series without a care in the world (usually when my car throws up a big bill). However, my net pay would drop £700pcm, which pays for a rather nice holiday each year as well as my car.
JQ said:
Jim Spencer said:
On top of the £7k you'll save a shed load of Tax plus there's the tax rebate on any business miles too (Unless work pay the full 45ppm that is..)
A quick Google suggests £286pcm BIK tax (assuming higher rate taxpayer) added to £320pcm from the allowance gives a budget of £606pcm, which assumes no profit on the mileage. OP also consider that the mileage rate may not cover your petrol costs if you do get something fruity. I'm currently averaging 16mpg in my car and the 20p per mile from my firm does not cover my petrol costs when driving for work. Clearly, it was my choice to buy a stupid car, but it does grate occasionally, although I don't really do many company miles so not a big issue.
The other thing to consider is that once you're out of the scheme it's very difficult to go back in. I take the allowance and enjoy doing so, but have occasionally considered opting back in so I can waft around in nice 5 series without a care in the world (usually when my car throws up a big bill). However, my net pay would drop £700pcm, which pays for a rather nice holiday each year as well as my car.
I hadn't considered if once out of the scheme one can never get back in so I will need to check that first and yes it is nice to be able to waft around and not worry about serving, tyres etc, although the insurance will be added to out fleet scheme so thats not an expense to me.
To top it off if i found a car which i didn't put too many miles on and it retained a good proportion of it's value - or heaven forbid appreciated then i have a good asset to boot - M3 perhaps?
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