Company car v private car

phingers

Howdy all.

HELP! And I hope this is in the right forum-seems to fit!

Mrs P works for the local authority and is an essential car user as she visits clients. She brings home £900 per month.

On top of this she gets paid £75 per month for using her own car and gets 33p per mile doing around 100 miles per month. Her bring home is therefore £900 (basic) plus £75 (own car allowance) plus £33 per month (petrol) so £1008 per month.

She could get a lease car through work.

Taking a Vauxhall Corsa as the example, the cost per year to Mrs P would be £1187 or £98.90 per month, and her mileage allowance would reduce to 9p per mile.

Her pay would therefore be £900 (basic) MINUS £98.90 (car) plus £9 (petrol) = £810.10 per month

So her bring home will reduce from £1008 to £810 so the net cost to her is £192 per month for the company car.

Of course, work pick up all the running costs of the car bar the fuel.

The taxable benefit of the car is £325 this year, £325 next year and £426 the year after.

The question IS...

Should she go for the work car or stick with her own.

It is imperative that she maximise her income as I am currently out of work. It seems to us that sticking with her car is better but neither of us can actually do the maths with taxable benefits and all that bananas.

So HELP would be greatly appreciated.

Many thanks is advance.:o

Cool_Username

I'll have a deeper think about this later but here is my initial thought - anything goes wrong with the company car then you don't pay for it, so that is a big bonus - how reliable is the car she owns now?

mark55man

my experience is its almost always better NOT to have the company car. that said I haven't done the sums for you and I am not sure on the impact on other benefits which may make up some of the £200 per month it will cost you to have the car.

phingers

Cool_Username wrote: »

I'll have a deeper think about this later but here is my initial thought - anything goes wrong with the company car then you don't pay for it, so that is a big bonus - how reliable is the car she owns now?

It has been the lemon of all lemons! Been in and out of the garage since March 2008. Luckily we bought a 2 year warranty but that will expire March this year. On top of the warranty work, we have had to pay for bits that the warranty didn't cover.

That said, I am not sure if much more can go wrong with it-there isn't a lot of the original car left!

Cool_Username

phingers wrote: »

It has been the lemon of all lemons! Been in and out of the garage since March 2008. Luckily we bought a 2 year warranty but that will expire March this year. On top of the warranty work, we have had to pay for bits that the warranty didn't cover.

That said, I am not sure if much more can go wrong with it-there isn't a lot of the original car left!

In that case then could be a benefit to get the company car - if you're paying out fairly regularly for repairs to the car you own now then you might as well get a brand new company car and ride around in that instead as long as the cost isn't prohibitive - which I doubt it will be.

piggeh

So currently you're receiving £108 to do 100 miles a month? Keep your own car tbh, but get something more reliable. I've forgotten all the taxable benefits side - isnt it 20% of the taxable benefit amount? I'm sure there's enough threads on here to seek out the facts. I thought companies usually offer 44p per mile to cover maintenance costs etc, so if you're getting the equivalent of £1.08 per mile it seems a good deal.

phingers

piggeh wrote: »

So currently you're receiving £108 to do 100 miles a month? Keep your own car tbh, but get something more reliable. I've forgotten all the taxable benefits side - isnt it 20% of the taxable benefit amount? I'm sure there's enough threads on here to seek out the facts. I thought companies usually offer 44p per mile to cover maintenance costs etc, so if you're getting the equivalent of £1.08 per mile it seems a good deal.

That's an interesting way of looking at it on the surface.

If the norm is around 44p without an allowance for the use of your own car, then the current situation isn't too bad. However, it is relative to each individual's situation which choice is better overall.

Looking at our actual bills for the car that we have paid over and above warranty work in the last year, the total is £1450. The 33p per mile covers the fuel so the £75 (before tax) hasn't covered these costs and then there is the tax and insurance too which I have only just thought about.

Do you know what would be really useful? Some sort of spreadsheet where all this info could be input and it would calculate which option would be better! Boffins, it's over to you. (I want 10% on all revenues from the service by the way;))

mark5

My wife works for the local council and needs a car for her job, she dont get no £75 per month though, just the millage i think its 44 pence per mile. I'm jealous now!

I would avoid the company car if money is tight, company cars are just good from the point of view, you have a nice shiny new car on the drive. Someones got to pay for the depreciation of that new car, and that person is your wife.