Car Allowance Advice

[Glutton]

Right so I started a new job in June which comes with a £10k car allowance it was all happened very quickly so I bought a 17 plate 120d as a stop gap after I returned my old company car. This clearly isn’t a long term option, so what do people think the best option is? Lease, PCP, new, used? I’m doing on average about 2,200 miles a month so it’s going to wash out as 25/26k a year.

[stogbandard]

I would be inclined to get used.

My wife had a job with a £200 per month allowance back in 2006 with mileage on top. We went out and bought a 1997 Audi A6 2.5TDi for £2,700. When she was made redundant a couple of years later the car was hers and kept it for a further 6 years. As we did 80,000 miles in it overall it was a good move, given the allowance had paid for the car almost twice over.

[Nickbrapp]

Leases will be big money for 25k a year, they’re much better suited to small miles so dealers have stock at 3 years old.

PCP could work out well, you can basically lie, take it on 10k a year and if it’s on 50k when it goes back you can either take another one out or just pay the extra mileage,

Used might be better for you if you take out a loan, used car finance is stupidly high APR, bank loans are much lower.

I would personally go brand new but depending on cost might go for a year or 2 maybe 3 year old car that I liked, certainly automatic and most likely turbo petrol, I don’t fancy owning a diesel with ad blue out of warranty

[Glutton]

Yeah that was the initial thought process in buying the 120d but it’d rather get something a bit bigger. Might go for a used 3/530d but current used prices are nuts!

[Glutton]

That’s the other conundrum, give the massive gap in petrol V’s diesel prices I might be better off in a petrol than a diesel, which never used to be the case.

Nickbrapp said:

Leases will be big money for 25k a year, they’re much better suited to small miles so dealers have stock at 3 years old.

PCP could work out well, you can basically lie, take it on 10k a year and if it’s on 50k when it goes back you can either take another one out or just pay the extra mileage,

Used might be better for you if you take out a loan, used car finance is stupidly high APR, bank loans are much lower.

I would personally go brand new but depending on cost might go for a year or 2 maybe 3 year old car that I liked, certainly automatic and most likely turbo petrol, I don’t fancy owning a diesel with ad blue out of warranty

[VS02]

For 10k and 25k p.a I’d be going with something that requires as little maintenance as possible to keep going… my money would be on a ulez compliant Honda CR-V diesel/ Toyota avensis

Would be boring but at least comfy and your pockets will thank you with the fuel and maintenance savings (coming from a BMW owner so I don’t have anything against them)

Or you can lease a Skoda Scala TSI in SE-L spec for 3yrs 25k p.a , £2771 upfront, 23x£230.98 from Leasing Optioms

Edited by VS02 on Sunday 11th December 20:19

[Nickbrapp]

Glutton said:

Plus I just don’t like how diesels drive nor the smell of it on your hands, for reference I had a Audi a3 saloon, 1.5 petrol which I ran for 3 years doing a 100 mile round trip mostly motorway, which would return 52-55mpg which was almost the same as the Leon 2.0tdi I had before it, which managed around 50-55 aswell but cost more to buy and obviously now diesel is 20p or so a litre more (not sure how long for) and would now fall foul of the ULEZ in Bristol and cost me £12 a day, which the Audi would be free

[Pica-Pica]

Nickbrapp said:

Plus I just don’t like how diesels drive nor the smell of it on your hands, for reference I had a Audi a3 saloon, 1.5 petrol which I ran for 3 years doing a 100 mile round trip mostly motorway, which would return 52-55mpg which was almost the same as the Leon 2.0tdi I had before it, which managed around 50-55 aswell but cost more to buy and obviously now diesel is 20p or so a litre more (not sure how long for) and would now fall foul of the ULEZ in Bristol and cost me £12 a day, which the Audi would be free

I never get diesel (and hence any smell) on my hands. so that should be disregarded. It is all down to whether you want or like higher torque.

[fourstardan]

Do they do a salary sacrifice option? If you do high mileage that might be a good option.

Personally I'd get something you own at the end of the finance agreement which is what I've done.

[Glutton]

That’s all well and good but I do sill have to drive the thing, not sure if 25k a year in a Skoda Scala would be ideal! Id want decent performance and kit. Currently looking at 2 year old BMW’s and possibly a Giulia Veloce.

VS02 said:

For 10k and 25k p.a I’d be going with something that requires as little maintenance as possible to keep going… my money would be on a ulez compliant Honda CR-V diesel/ Toyota avensis

Would be boring but at least comfy and your pockets will thank you with the fuel and maintenance savings (coming from a BMW owner so I don’t have anything against them)

Or you can lease a Skoda Scala TSI in SE-L spec for 3yrs 25k p.a , £2771 upfront, 23x£230.98 from Leasing Optioms

Edited by VS02 on Sunday 11th December 20:19

[pembo]

I'm in a similar position so I'll share my recent musings.
Do 25k a year
Allowance £8k p/a
The extra issue is I must have a car under 4 years old.
I find out the company car list next week.
I'm concerned about the waiting lists being long and being stuck in the high bik Audi I have been given in the meantime.
So I've considered getting something myself.
The mileage is a big kicker for leases and PCP, I've floated through so many ideas...
Would love a Giulia - but they stopped making diesel in 2020 and petrol only gets 35mpg ish. If I got one I'd have to sell within a year, loan/pcp would be longer than that so it seems complicated.
Get an ev lease - there are options around £6-700pm doing 25k but they are not going to be particularly comfortable over long distances.
I can charge for free at work, 10 miles from home - sod it, how much is a taycan? I'm losing £400pm in allowance, £400pm in tax and £300pm on the fuel card.... £1000 deposit and £1500pm is pushing the man maths a bit.
Just get a golf or puma that's a year old - £500pm on pcp then I've got to deal with insurance, maintenance etc.
I think I'll have to stick with the company car. I can't see a way of making it cost neutral compared to taking a company car ev or phev unless I'm willing to accept that I'll be paying a bit extra for something I really want.

[VS02]

Glutton said:

That’s all well and good but I do sill have to drive the thing, not sure if 25k a year in a Skoda Scala would be ideal! Id want decent performance and kit. Currently looking at 2 year old BMW’s and possibly a Giulia Veloce.

You’d be surprised, the Scala is a 5* car, a pleasure to drive and loaded with kit. 115bhp turbo and 6 speed manual/7spd dsg, ACC, armrest, more than enough poke (9 seconds to 60)

Sorry but can’t see the point in 25k a year in a car that will cost half of its value in fuel and servicing every year , especially an Alfa

Scala SEL kit:


Comfort Alcantara seats
LED headlights
LED DRL
LED taillights with dynamic indicators
Fog lights
Privacy glass
2 zone climate control
Electrically Folding door mirrors
Front and rear parking sensors
Keyless entry
Keyless start
Adaptive cruise control
Satellite navigation 9.2”
Wireless Apple CarPlay
Android Auto
Lumbar support
8 speaker audio system
Rain sensor
Light sensor
Lane assist
Front assist
DAB radio
Digital driver’s display
Voice control
Ambient lighting

Edited by VS02 on Sunday 11th December 21:28

[Yomamaisasnowblower]

It's a hard one and I can see the OP's point. On one hand you don't want to waste cash but on the other if it's your only car you don't want to drive around in a poverty box either.

[TwigtheWonderkid]

There's no law saying you have to use the whole £10K. It's a tool to do your job, that's all. You work to earn money. I'd buy something used, the minimum to do the job reliably and economically. Something like a diesel Golf or Passat. The money left over pay into your pension as an AVC, to get the tax back. Retire years before your colleagues and get the car you actually want then.

[pembo]

That's all well and good but being on a car form I can't imagine many people here would be keen to wake up most mornings and spend 2 hours plus in a Scala.
Given a 10k allowance I imagine he is in a reasonable position at work and would want to enjoy that time a little.

[ZX10R NIN]

Here's the thing, no matter what you buy you'll have added 75k to it in 3 years which means the more you spend then the heavier the depreciation. Go to cheap & you could be spending (not always the case) to much on maintenance plus time lost not working.

With this in mind I'd be looking for (obviously you still have to buy on condition) something with no more than 75k on the clock an auto box as well as low NVH/comfortable heated (air cooled would be a bonus) seats/ride/auto/xenons & preferably a 5+ cylinder diesel & an infotainment system I can add Android Auto/CarPlay to.

With that in mind here's where I'd be looking.

Volvo S80 D5 SE Lux:

https://www.autotrader.co.uk/car-details/202208269...

https://www.autotrader.co.uk/car-details/202210140...

S60 SE Lux:

https://www.autotrader.co.uk/car-details/202211211...

Infiniti M30d this has all of the above features & adaptive cruise:

https://www.ebay.co.uk/itm/225219281052?hash=item3...

Mercedes CLS350cdi:

https://www.autotrader.co.uk/car-details/202211282...

E350cdi saloon/coupe:

https://www.autotrader.co.uk/car-details/202211071...

https://www.autotrader.co.uk/car-details/202210150...

Coupe:

https://www.autotrader.co.uk/car-details/202210281...

Adaptive cruise:

https://www.autotrader.co.uk/car-details/202211161...

730d:

https://www.autotrader.co.uk/car-details/202208218...

[covmutley]

Even setting aside the finance side, I'd hate putting that mileage on a 'nice' car. Perhaps a 2 car solution might work?

[Ecosseven]

Does your company restrict the age of car that you have to buy with the allowance?

I get a car allowance of £6.5k / annum and run a 9 year old Seat Leon. I just take the allowance as extra salary and it more than covers the running costs for the Leon as annual depreciation is now pretty low due to the age of the car.

[Glutton]

Has to be under eight years old and 110k miles. Hence the initial 1 series purchase. As much as I know I could save money by keeping an older car, I’d prefer something nicer, we are restricted on parking at home so sadly my days of having a fun weekend car are on hold certainly for the next five years or so!

Ecosseven said:

Does your company restrict the age of car that you have to buy with the allowance?

I get a car allowance of £6.5k / annum and run a 9 year old Seat Leon. I just take the allowance as extra salary and it more than covers the running costs for the Leon as annual depreciation is now pretty low due to the age of the car.

[RoVoFob]

Nickbrapp said:

PCP could work out well, you can basically lie, take it on 10k a year and if it’s on 50k when it goes back you can either take another one out or just pay the extra mileage.

Do not do this.

Conning a finance company with an artificially low mileage allowance results in end-of-contract excess mileage charges that invariably outweigh the extra amount you would have paid by going for an accurate mileage allowance (if you return the car).

Meanwhile, if you plan to buy it at the end of the contract (or return it), you’ll end up paying more interest doing this, as the monthly payments are smaller with the lower mileage allowance, so you’re borrowing more money for longer.

I have done a substantial amount of research into things like this as part of my job and it’s absolutely a false economy.