opting Out of company car scheme car suggestions

[Motorwaymiles]

apologise in advance if I’ve put this in the wrong forum section.

I am just about to opt out of my company car scheme and buy a new car for myself using a company allowance and I was hoping you guys could help.

I have been given a budget of £700 p/m (gross) as an allowance for a car. i will have to fuel, service and general upkeep of the car but can claim back first 10,000 miles at 45p then 25p thereafter.

Presently I drive about 40k a year and as a result don’t want to finance a brand new car.

Do you guys have any suggestions as to what cars are ideal for this situation? I’ve looked at 320d, A6, 5 series, a4, c class and e class. My personal budget (what I’m willing to finance) hasn’t been confirmed and wanted to know am
I better financing more for a greater residual or spending say max £20k to keep costs down and profits up?

Obviously needs to be fuel efficient to allow for profit from my fuel mileage.

HELP????!!!

And thank you for reading this

[syl]

You might want to look at HP agreements and voluntary termination at the 50% point with that sort of mileage, to get the most from your £700/month.

[sam.rog]

What tax bracket you’re in makes a big difference to your net allowance. If you are a 40% tax payer it’s only £420 a month to pay, fix, tax and insure your car and for that milage you will struggle in my opinion. I do 30k and a company car works out cheaper and a lot less hassle.

[Trailhead]

That’s a lot of miles to run on a private car. Can’t you downgrade to a better value tax wise company car?

I recently swapped from a large diesel to a mid sized petrol, same manufacturer and saved a few grand per annum.

[Motorwaymiles]

Hello,

I am 40%, yes.

Forgive me for being stupid but this is what I’d planned to do.

BMW 320d £20,000 using a Natwest loan at 3.4% monthly repayments £444 pm across 4 years

10,000 miles at 45p = £4500
Cost of this fuel at 55mpg £1074
“Profit” = £3426

30,000 miles at 25p = £7500
Cost of fuel at 55mpg = £3223.37
Profit = £4276

This leaves me with a total fuel “profit” of £7702 p/a - an extra 12 * £24 (-£228) to make the top up to cover the loan repayment

So in my eyes surely the £7500 p/a should cover insurance, tyres, services etc?

I am now so confused!

Been stung before on company car had an a6 avant black edition with fuel cost me £7200 a year in tax!

[Starfighter]

Job 1 - Drop the “free fuel” and pay your own and claim back at the HMRC rate. I make about 1p per mile claiming at rate against cost at the pump and no tax burden. (Superb 2l TDI 150). You need to do staggering personal miles to break even on the provided fuel option.

Remember to calculate in that you currently pay tax on the “value” of the company provided car. Currently you will be paying HMRC around £350 per month in tax. If you opt out the you don’t pay that so are “up” that amount The company gives you £700 gross so £400 net as cash. Net effect is you have £750 A’s buying power to cover fixed costs such as repayments or lease plus road tax (yes I know...) and insurance. The 45p/25p covers variable costs such as fuel, types and servicing.

Looking at this myself for the end of my lease in February 2020. I only do 20k per year. Tempted by another Superb.

[hepy]

If you leave the company car scheme, can you rejoin at any time?

40k Miles is a lot to do privately, I do about 19k Miles a year, and I am going to go back in the company scheme next year, and get a hybrid to keep the tax down.

[dmsims]

About 180 miles a day

Back to the company car scheme next April in an EV ?

[Muzzer79]

sam.rog said:

What tax bracket you’re in makes a big difference to your net allowance. If you are a 40% tax payer it’s only £420 a month to pay, fix, tax and insure your car and for that milage you will struggle in my opinion. I do 30k and a company car works out cheaper and a lot less hassle.

Don’t forget that as well as the allowance you ‘gain back’ the BIK tax that you will now not pay on the company-supplied car.

It can work, even doing big miles, but you should look at buying a car and keeping it long term up to well over 100k miles to spread the cost as much as possible.

[jonwm]

To mirror what other have said really, I have always had a company car, opted out of fuel a few years ago because I don't do enough nowadays.

I ran a Cupra 290 for a few months beginning of last and to be fair did make some money, but after only 3 months I was noticing stone chips on it and general wear on it was more than I wanted (it was leased) so went back into the scheme as I could get a 330e hybrid, I'm a 40% tax payer and that costs me circa £170 a month or thereabouts in tax, benefit a little on the fuel too as can charge at some places when on company sites and local supermarket etc and they pay standard petrol price 20p per mile.

The other week someone hit me in a car park and drove off, that's being sorted on Monday via a smart repair all paid for by the company, insurance even with mirrored no claims was £700 for me and the excess for something like £500 when I had to insure for business use.

For the hassle of it and the risks when doing 40k I'd try and get a hybrid through work.

I may look again next time as i am doing less miles now but the ease of a company car for me just makes budgeting and other things better.

Edit to add: Are you sure you get the 45p, that's normally if you don't get car allowance, seems a high figure if they are also chucking you 700 a month.

Edited by jonwm on Friday 9th August 16:02