company car vs car allowance

TM1976

Keep your car for longer. Depreciation is one of the major costs of car ownership and you are most of it and passing a 3 year old car on to someone else.

If you actually are going to change your car every 3 years you are probably no worse off having a company car even with the tax. At least this way you don't have to worry about repair costs, insurance etc.

David_Robson_2

TM1976 wrote: »

Keep your car for longer. Depreciation is one of the major costs of car ownership and you are most of it and passing a 3 year old car on to someone else.

If you actually are going to change your car every 3 years you are probably no worse off having a company car even with the tax. At least this way you don't have to worry about repair costs, insurance etc.

With the high mileage that I do I need to get rid within three years, I'm also left with a balloon payment after three years that either has to be cleared or we start the whole process again, to get a price per month that is affordable I have to go with the 10,000 yearly mileage

starfleet_2

Hi all

Total newbie here.

I am considering whether I should have a co car or continue with my car allowance.

Car allowance £300 a month (I know this is very low but i'm not a manager which I have had for the last 4 years)

Business mileage roughly 2000 - 4000 miles p.a
Personal mileage roughly 9000 - 10000 miles

I am just into the 40% tax bracket - I earn just under £40000.

Is their anything else I should add for all the experts need to help me.

NorhternMonkey

This thread got me thinking and now i'm !

I had to buy my own car (cost £7k) pay tax, insureance, Maintenance ect. which is fine but i have to use it for work (less than 10k per year) and only get paid 40p per mile. I the more i thought about it the more i got.

I couldn't work out if its costing me money to work? can anyone help?

mulkers

My company is offering me a £175 a month car allowance (fuel to be added) to opt-out of having a company car.
This seems incredibly low to me and to everyone i speak to. Can anyone tell me if there is a regulated body with suggestions for this kind of allowance? I have been looking on the web and cant really find anything.

Thanks in advance

c

leesimpkin

sorry to jump on this thread but i could do with some help.

the company i work for pay £500 per month, plus .40p per mile (having browsed a few threads i now know i am on a decent wicket)

my 3 yr deal is up for negotiation with my boss, as the company has had a tough year (like we all have) i guess he is going to want to play hard ball.

do i:
A) opt for a lease car, making my monthly outgoing alot less than they are now
or
B)look at going back to a company car/pool car

i currently do around 1100 miles per month, 300-400 business rest private

my current car costs me around £500 per month for the loan, insurance & other bills will bump this up a bit, tax code is in 40% bracket.

i am really confused which way to go, any advice?

covmutley

My company car (2.2d civic) costs me 320 a month. No other outgoing except fuel, which is handy.

If owning a new car is important I would definately stick with a company car. I need a bigger car so looking to come out or employer scheme and buy a 5/6 year old but 'nicer' car. Depreciation is by far the biggest cost in owning a new car.

leesimpkin

thanks cov, but i am still searching for anyone who can give me a good idea what to do, do i:
A) opt for a lease car, making my monthly outgoing alot less than they are now
or
B)look at going back to a company car/pool car
Lee

ceeforcat

I had posted previously on this as follows: (Maybe some of the rates are now dated- but the principle remains the same)

There are calculators out there but maybe I can point you in the right direction. Over the years I have very rarely found giving up the company car to be beneficial despite the ever increasing tax on such a benefit. In some cases, especially where there is low business mileage, it will be beneficial to give up the free fuel which I think is happening in your case.

Let's say you have a company car with a cost price of £15000 and cO2 emissions of 145. The benefit is calculated as follows:

£15000 x 20% (the appropriate percentage for 145 cO2 emissions) =

£3000

The tax on this is £600 per annum if you are basic rate, £1200 if higher rate. The company pays all running costs, finances the car and takes the depreciation hit.

You need to ask yourself if you the cost of

servicing
car tax
repairs
insurance

will be less than this. On top of this you have to finance the car and (the big one) take the hit on the depreciation when you go to sell it.



On the mileage front, the company will still be able to pay you between 10 and 17p per mile if you have a company car (depends on the cc and fuel used)

I hope that this is helpful to you.

leesimpkin

thanks ceefor,
however just a few more questions!

my car at the moment is a audi a4 avante
CO2 emissions (g/km): 154
On sale: Now Price (OTR): £24,810

i do on average 1100 miles per month, more than half is private millage

say for instance i went back to the company car route, what should i do re fuel? they pay all then i get taxed on personal use, or i pay it all then get work to pay me .15p per mile business use? i dont get this bit!

or do i simply get a lease car, instead of high purchase like i did this one, and carry on getting the company to give me £500 per month and .40p per mile business

oh im confused...it was all so simple before!

Help