Company car

Hippychick1_2

Hi

I wonder if anyone can help? It would be much appreciated.

I have had a company car for the last three years and have just ben told that due to a new policy I will not get another one. I have to hand mine back in December.

I was doing approximately 10,000 personal miles in that car per year, mostly to get to work and back.

There is a possibility of me being compensated for this loss. I have worked out that the car was costing me in tax £32 per month or £384 per annum.

I do not intend to buy a new car (I don't have the money and don't want to borrow any). Does anyone have any advice on how to calculate the loss?

If I was to buy a car to cover 10,000 miles I would then have to cover insurance, MOT, servicing etc. Should I include depreciation?

I have searched the net but not found any definitive answers.

Thanks very much,

Hippychick1

pody

What car do you have? £32 a month in tax does not sound like much, my focus is over £60.

Company cars are usually only for employees that regularly have to visit customers or work offsite/different sites.

I cant see why your company would pay the lease of the car. insurance and maintenance just to get you to work, that's up to you.

Hippychick1_2

Hi

Thanks Pody. It is a skoda and is very carbon efficient, which is probably why the tax is so low.

I can understand the change in policy. I'm not asking them to pay for the fuel to get me to and from work but am trying to work out what the loss of a car for personal use means to me financially.

Thanks,

Hippychick1

Hintza

I'm not really clued up on this but some more info might help a little.

How many business miles were you doing? Was the car required for the job? If not it must be a perk, is the car mentioned in your contract of employment?

If you are entitled to one in your contract one must assume they are going to compensate you for the loss as it is in effect a pay cut or is the company in difficulty and wanting employees to take an effective pay cut?

Hippychick1_2

Thank you Hintza.

I was doing an average of £6,500 business miles each year. The job was offered with a car but the organisation have covered themselves with a clause that says benefits can be removed at any time. The new policy is to save the organisation money on company car users who do less than 10,000 miles. I think it was felt three years ago that the car was required for the job but this has proved to be the case to the tune of 6,500 miles rather than 10,000.

They have indicated that they will compensate me but I have no idea what to ask for.

Thanks for your help,

Hippychick1

Bean_Counter

Hippychick1 wrote: »

They have indicated that they will compensate me but I have no idea what to ask for.

Thanks for your help,

Hippychick1

I presume that for the business miles that you will do there will be a pool car or that the company will cover the costs of the business mileage.

How will you commute to work? I guess you will be out of pocket to the tune whatever it will cost to commute less the £32 per month tax.

It is important to bear in mind that whatever figure you come up with you, you will need to gross it up for tax and national insurance as you will pay for your commute out of your after tax income.

Hippychick1_2

Thanks Bean Counter. Once I lose my company car, for business travel I will either receive money for the petrol I use in my own car or they will cover the train costs.

Communting to work will involve double the travel time and train fares. I think I will ask to be home based. This isn't ideal for me. I will also lose out because I will not have a car for personal use.

Hippychick1

Alfrescodave

I'm not sure that I fully understand this. The Company provided you with a Company car for business purposes so any personal use was a perk - which you could argue was costing you £32 a month in additional tax. They have now reviewed their policy which requires 10,000 miles as a minimum for a Company car, which you don't do, so will loose the car. So why would they compensate you "for the loss of a car for personal use" ? - you'll be saving the £32 tax. Is it written into your contract that your salary is £XXXX and includes a company car ?

Hippychick1_2

Thanks Alfrescodave. Yes it was costing me £32 to have the use of a car for personal use. I will now save £32 a month but will have lost the use of car for personal use. Replacing this - ie. the cost of using a car for personal use less the £32 per month tax - will cost me much more. If I buy a car it will include insurance, MOT and maybe depreciation. If I don't buy a car it will cost me the use of trains and hire cars. I am not sure how to calculate this though. I hope that is clearer - I'm obviously not explaining this very well!

Hippychick1

AdrianHi

I'm a bit of a "real cost of motoring" anorack
I have this spreadsheet I use to compare costs of different cars and I can get a figure very close to the What Car "real cost" pence per mile or over 3 years and 36,000 miles figure they used to publish but don't seem to any more. My figure is slightly higher probably because it includes cost of lost interest ion savings nwo that you have to put you own cash into the car. It's also handy if comparing with leasing because you don't have to sink much cash in if you lease.
Your company car used to be new and kept for 3 years?
Do you want to know what it would cost you personally to do the same which gives you a true figure for the compensation figure you want or just figures for buying say a 6 month old car (which is one of the best value for money ways to go unless your prepared to run a car 6+ years old).
Answer the following questions and I can get a figure for you. Good point to note about before / after tax paid money being spent.

Annual or monthly figures needed for:
What car will you buy - model, grade, engine and age / reg.?
How old will it be at purchase or how much is it?
How many years/months will you keep it?
How much cash (deposit) will you put in?
How much will you borrow?
What loan interest rate? (please say if APR or flat rate)
For the cash you put in what interest rate would you get if it stayed in savings or if you would pay some mortgage off with it what is the mortage rate?
How many miles? Personal miles? Business miles?
The followign I could figure out but if you know:
MPG?
Tax disk cost?
Service cost?
Insurance cost?

Hippychick1_2

Great AdrianHi, sounds like you are just the person I need to talk to. Thank you so much. My car was new at the beginning of the lease. If I got another company car it would again be new. So would it be best for me to work out compensation based on buying a similar new car?

I could answer your questions on that basis. I would be unable to contribute any deposit at all. Work have offered to lend me the money interest free but I have my reservations about that because if I want to leave, I will owe them a lot of money.

Thanks again,

Hippychick1