Car allowance

mozzyc

Hi
Hoping to get some input from someone on this:

My husband is going for a job interview that offers a car allowance. Right now he has a company car for the job he is in now - ie, we don't have our own car.

Question is, how does a car allowance work?
And can it be used to get a lease car instead of buying a car. And if he gets a lease car, does that usually cover road tax and servicing etc.?

Thanks for any input!

MrsTinks

Not sure about lease but if he gets a car allowance that is for him to decide on how he then spends it provided he has a car that meets his contractual terms. IE my hubby has to have a car not older than 5 years and "of a certain quality" - they have special wording lol - because of his position in the company. when he turns up to see clients or from time to time has to transport clients (maybe from office to lunch lol) they expect him to be representing the company. So a 10 year old corsa would NOT be acceptable... IYSWIM.
Not all companies have terms attached to what car you have to have - I worked for one that had NO conditions at all to what you drove provided you had a car and you got your butt to work...

I would be cautious of leases though... I think once you sign a lease you're stuck for that period - even if your husband was to loose his job... and obviously you can't even sell the car to pay some of the remaining agreement off...

pure_dead_dopey

Hi Mozzy

I have a company car allowance. It is a much better position for tax purposes but you have to buy and maintain your own car.

Check the amount, and check that fuel will be paid for seperately ie not within the allowance.
Check that the allowance is sufficient for what kind of car you have to buy, ie mine is £450 per month with 25p per mile for petrol. But remember that your car allowance will be taxed at your normal rate, so you need to take the tax off when buying a car.
My car has to be less than 3 years old and like Tixy says or a certain standard, so while my allowance looks generous, it isn't really when you take into account the HP on a car, tax, insurance (you need business insurance) and repairs.
I don't want to put you off, just watch what you buy. The other problem is that you have to have a deposit up front to buy a newish car which as I know you are DMPer like me, could be a problem. However, I wouldn't ever go back to a company car as the tax position is tons better with a car allowance as long as you don't by a ferrari or something.
Good luck with it.

MrsTinks

Well company cars can be better - the benefit being that you can hand it back should you leave or loose your job... it's about adding up the pro's and con's for your situation
Anyone joining hubby's company now has to have a car less than 3 years too - they wanted to change his terms a while back and he told them to buzz off lol - in practise no-one has ever commented on the cars he's driven - even when it was my 14 year old MX5... which he drove because he thought it was fun lol! Granted we DID have a less than 3 year old car at the time too but I was using it lol

mozzyc

Hi
Thanks guys for that. Dou! Didn't even think of the deposit for a new car! Thanks pdd - you're right, we don't have a deposit for a new car. So it looks like it'll have to be a second hand car, or the lease car. He's just going to have to ask about it in the interview. Not sure at all about the petrol etc. But with his job, it's mainly driving around to sites, so i'd guess that petrol would be paid separately.
Cheers guys!

dangers

If he gets paid under the 40p/mile allowed by Inland revenue for company mileage, then he can reclaim the remainder by filling a special form (sorry cannot remember what it is called).

pure_dead_dopey

dangers wrote: »

If he gets paid under the 40p/mile allowed by Inland revenue for company mileage, then he can reclaim the remainder by filling a special form (sorry cannot remember what it is called).

P57 I think

crispycornflake

I have just read this post with interest, the reason being myself and hubby recently started a dmp through cccs and hubby gets a car allowance paid in addition to his salary. His car is now over 3 years old and when I asked the cccs advisor what will happen when the car needs replacing he basically said we can't replace it!!! When I explained this could seriously jepordise his job his only advice was 'well he'll have to get a company car' ermmm, what if this is'nt an option??? I am just wondering if anyone has any advice? The fact is the company pay the car allowance so he has a reliable car which he needs to do his job so not having one or driving an old banger is not an option.

pure_dead_dopey

crispycornflake wrote: »

I have just read this post with interest, the reason being myself and hubby recently started a dmp through cccs and hubby gets a car allowance paid in addition to his salary. His car is now over 3 years old and when I asked the cccs advisor what will happen when the car needs replacing he basically said we can't replace it!!! When I explained this could seriously jepordise his job his only advice was 'well he'll have to get a company car' ermmm, what if this is'nt an option??? I am just wondering if anyone has any advice? The fact is the company pay the car allowance so he has a reliable car which he needs to do his job so not having one or driving an old banger is not an option.

Hi Crispy

I am in the exact same position and I asked CCCS what I would do. Mine is on HP with one of those balloon thingys at the end, I explained that I earn the bulk of our money and if I don't we go bankrupt. The nice lady said don't worry, if you need a car you need a car, i am a bit worried about getting more credit as well but can't second guess that, have another 2 years to go on my present agreement so kind of hoping it will be OK then (God, my head is heading for the sand) No I might just have to save up some cash, get a smaller car next time or win the lottery. One thing I will say was that finding the deposit for my new car was one of the things that tipped us over, they don't pay the car allowance in advance as you probably know, what are you going to do?

crispycornflake

Hi pdd, thanks for replying so quickly . I really don't know what we are going to do!!! At the moment we don't have to worry as it is only just 3 years old, the company rule at present is car has to be under 6 years and obviously roadworthy!! But as our dmp will last a lot longer than the car this is where we have issues because in 3 years maximum the car will have to be replaced, the dmp is for over 10 years!!! Obviously we plan to get rid of the debt asap but we will still need a new car whilst the dmp is still in place and hubby is main breadwinner so without his job we would go bankrupt :eek: so car is needed for job no compromise.

mozzyc

That's exactly our situation. But i think until we can save for a deposit for a car, we're just going to have to get a lease car, a cheap but reliable one. Only thing is though, i'll have to ask my brother if we can use his credit card, as we don't have one/aren't allowed one on our dmp. But i'm not going to let any of this get in the way of him getting a much better and higher paid job!