New car calculations: what have I missed?
Discussion
I am trying to weigh up the pro's and con's of changing the company car 9and justify the cost!). Have I got these figures right, over say 3 years, and is there anything I haven't considered?
The car we have at present is 4 years old ( Audi A2) and I have been offered an average of £7300 for part-ex. That would cost us £1387 in Corporation tax at the 19% rate if we sell/ part ex it. We could expect it to drop in value to around £3600 over the next 3 years. We have had a 100% of the capital allowances on that car as a low CO2 vehicle. We currently have an extended warranty on the car which costs us about £330 a year, so over three years there is another £990. Annual MOT, repairs and servcing I think would cost around £1500 over 3 years. So depreciation of £3600, plus £900 in warranty and £1500 in other costs gives us £6,600.
We are looking to replace it with a nearly new Mercedes A Class diesel costing £14,500. The list price of around £17,000 would add £100 a year to my company car tax bill, and £60 per annum to the VEL because of the Co2 emissions. Over 3 years I think we would lose half the value = £7,250, just like the Audi. We would have the £1387 in CT liability from the Audi, but that would be countered with the maximum capital allowance of £3000 per annum, so reducing the CT bill by £1710 over 3 years, but the £1387 would have to be paid year 1. I make that a figure of VEL £180, company car tax £300, depeciation £7,250, net CT liability ( £323, plus the retained liability of 19% of the residual £7250) £1055 more in CT overall is £8785.
So, taking into account the loss of interest on the £7250 difference if left in the bank which is £900 over 3 years the change woulld cost us £8785+£900-£6600= £3085, or £1000 a year, plus the costs of one major servce on the Merc for the 10,000 miles a year we do?
The car we have at present is 4 years old ( Audi A2) and I have been offered an average of £7300 for part-ex. That would cost us £1387 in Corporation tax at the 19% rate if we sell/ part ex it. We could expect it to drop in value to around £3600 over the next 3 years. We have had a 100% of the capital allowances on that car as a low CO2 vehicle. We currently have an extended warranty on the car which costs us about £330 a year, so over three years there is another £990. Annual MOT, repairs and servcing I think would cost around £1500 over 3 years. So depreciation of £3600, plus £900 in warranty and £1500 in other costs gives us £6,600.
We are looking to replace it with a nearly new Mercedes A Class diesel costing £14,500. The list price of around £17,000 would add £100 a year to my company car tax bill, and £60 per annum to the VEL because of the Co2 emissions. Over 3 years I think we would lose half the value = £7,250, just like the Audi. We would have the £1387 in CT liability from the Audi, but that would be countered with the maximum capital allowance of £3000 per annum, so reducing the CT bill by £1710 over 3 years, but the £1387 would have to be paid year 1. I make that a figure of VEL £180, company car tax £300, depeciation £7,250, net CT liability ( £323, plus the retained liability of 19% of the residual £7250) £1055 more in CT overall is £8785.
So, taking into account the loss of interest on the £7250 difference if left in the bank which is £900 over 3 years the change woulld cost us £8785+£900-£6600= £3085, or £1000 a year, plus the costs of one major servce on the Merc for the 10,000 miles a year we do?
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