Company car BIK or Lease car and take Allowance

[passat98]

I am looking into a replacement car next year, I currently have a 2018 BMW 330e through a company car option that took my tax code down to 748L.

Do you think it would be better to lease a car / PCP a car and take my company car allowance £500 and then the payment on business miles ? (I currently do between 30,000 - 40,000 per year) and go back to the standard 1270 tax free amount ?

I am on £47,000 basic and doing research into the best option to maximise take home over the next 3 years. With the company car option option I am more boxed into hybrid / electric, but for a car allowance I think diesel is still the most economical option.

Any thoughts ? what are you doing ?

[Dave.]

fk putting 40k miles on your own car!

Let the company pay for that and the maintenance that goes with it.

[clockworks]

I had company cars for 20 years, doing a similar annual mileage. The only way I could make it work financially to run my own car was when there was no age limit. I'd buy an old Ford Granada or Vauxhall Carlton with a long MOT, and sell it on before it needed any work.

As soon as my employer put a 6 year age limit on, it always worked out cheaper to take the company car.

Might be a bit different now, with BIK rates being higher?

[Bluemondy]

I had this issue. Company car list was a bit poor. Could take the cash & lease option.

Ultimately though my car's get a rough time due to the geographical area I work in. A Mondeo bouncing down farmers tracks weekly takes its toll and I don't want the potential liability.

Same as racking up 40k a year I'd imagine!

[Somebody]

Nowadays go for Pure-EVs as they are now rated at 2% until the end of March 2025. PHEVs receive low rates as before, but these are now graded based on the pure-electric range available. Those capable of travelling further on electric power receive lower BIK rates.

I always opted for a company car, as it was hassle free motoring. Someone else was keeping me mobile.

[Muzzer79]

With that mileage, take the most tax efficient company supplied car - your 330e is perfect.

[s111dpc]

Having run company cars for years before reverting to my own, I think I would definitely be running a company car on that annual mileage. I would of thought PCP costs would be quite high on those miles, plus you’ve got to factor in all the other costs, insurance, servicing, tyres etc.

[jonwm]

I’ve looked at this again recently.

Always had a company car, left my last place feb 2021 where I had a 2018 330e with fuel card, new job was with a manufacturer so got new car every 6 months for circa £130 and keep my full tax code.

Semi conductors and covid mean that cars are now 15k miles before change and new ones are taking 6 to 12 months ( retail have priority) so they offered us £600 a month gross to come out the scheme, I couldn't make it work with the restrictions of max 5 years, for now I’m staying put, would ideally like a traditional scheme where I could have electric or hybrid, randomly they are much more on a manufacturer scheme.

[passat98]

Thanks for all the replies

[Pistonsquirter]

PCP would have your pants down on 30-40k miles?

I'm on 70k basic, 5k car allowance, I bought a £700 2002 Honda jazz for commuting which we refer to as 'the Tupperware', costs £220 a month in fuel, I keep the rest.
You would need some kind of 911 in the garage to balance out (offset) the lameness though as I do.

[mfmman]

I ran opt out cars for 35-40k per annum for years and always came out slightly above if I had taken the company car

Each time I...

Bought a car a maximum of 3/6 months old, normally from a main dealer

Ran it to the maximum age of five years (or just before if a big service or other cost was looming) in line with company policy

Bought it outright (with support from a personal loan for at least some of the cost) rather than leased or PCP

Made sure I had a cast iron manufacturer warranty in place for the bulk of the intended ownership at purchase. I only ever needed this for one car (a 2007 A4 PD170 which had the well known injector issue, I didn't pay for any of the replacements even when the warranty had expired. All done as goodwill), the other three unreliable VAG products I had were, well reliable

Took some equity out each time I PX'd or sold rather than just lumping the maximum back into the next car.

Cars were 2x Passat TDi and 2x A4TDi

[Somebody]

In the last 5 tax years, the most I "paid" in co car tax was £189 per month (lowest £154pm) so not a bad deal in my eyes for hassle free, fully expensed (except for private fuel) motoring.

[Bluemondy]

Pistonsquirter said:

PCP would have your pants down on 30-40k miles?

I'm on 70k basic, 5k car allowance, I bought a £700 2002 Honda jazz for commuting which we refer to as 'the Tupperware', costs £220 a month in fuel, I keep the rest.
You would need some kind of 911 in the garage to balance out (offset) the lameness though as I do.

Your lucky! Our company policy, to qualify for the cash allowance is up to a maximum of 5years old

[Sy1441]

As above, you have no option really than to stay in the scheme as that kind of mileage will cost you. Get a Hybrid / Electric and benefit from the low BIK.