Car allowance

Lennylegs1

Hi
I wasn't sure whether or not to post on here, job board or debt board but if anyone can help i'd be grateful.
In short my oh has pretty much been offered a new job, salary is £5k extra and it comes with a £5k cash car allowance so £10k extra a year (approx £600 net per month) which sounds a lot until you know he doesn't run a car at the mo as work is close so INS, tax, servicing, repairs and the biggie - petrol ( the job is quite a distance with a diesel prob 200-250pm) to put it bluntly we are working our way out of debt and every penny counts, no savings really other than for stuff already accounted for. This job is my husbands dream job, the figures alone we can just do if we buy say an 02/03 high mpg diesel. But my dilema is people have been saying to us that often with the car allowance you have to buy a certain standard of car ie - 4 dr, diesel, low carbon, these things alone aren't the problem but the main one that at no point can the car be older than say 4 years!!! Which would mean buying one say 1/2 years old heaping tons of miles on it and hoping it was worth something at 4 years old to buy another not to mention the fact there's no way we can come up with / borrow that cash. Does anyone have any experience of these schemes and their restrictions ? I'd be grateful for any insight ! Thank you

maninthestreet

Your husband needs to check with his prospective new employer on what restrictions, if any, they have that apply to the car he's supposed to finance using the car alowance. Only then can someone on here advise you.

alleycat`

Basically what MITS said.
You need to find out exactly what restrictions they place on the vehicle are.
Our policy states the car must be under 5 years old, in good condition and fit for purpose but there is a "managers discretion" aspect to it.

I've known colleagues to run very nice, well maintained cars that are 8+ years old.

I've also known quite a few use the allowance to buy a cheaper "biff about" and save the rest.

It really comes down to what the car requirement of his job is.
If it is customer facing they'll probably be quite tight about what it should look like.
If it is just a "perk" then they probably won't be as uptight about it.

JQ.

As above, all companies have different rules. I take the cash for car allowance and have to drive to clients around 3 times a week. I'm currently driving a 12yr old 2 seater convertible and it's not an issue.

jjonesy

Some companies give a car allowance and there are no expectations to even buy a car.
I know some friends who get a car allowance but get lifts to work from their colleagues as there is no requirement for them to be out the office. They see it as extra salary.

AdrianHi

Wife used to have a car allowance with the incumbent nothing over 5 years old "rule". In practice she got away without replacing the car with was over 5.5 years old by the time she left the job.

It's quite possible depreciation and not fuel will become the single biggest expense on the car if you are forced into buying something young.

What do you mean by 200-250pm?
Cost of fuel per month?
OK that roughly equates to 15,000 miles a year assuming a mid 40's to the gallon diesel. I do spreadsheets fairly often to work out the real cost of cars as a average monthly expense for the period used. You have about 416 a month from the car allowance. "Wet finger in the air" estimate I'm pretty confident you can put something like a 2 year old Fiesta or Focus diesel on the road inside that monthly budget for that monthly mileage selling on when it is 5 years old.
You've just got to figure out the cash flow challenge funding the purchase price of a 2 year old car presents now.

By way of illustration my wifes Mazda 6 2.0 petrol (35mpg) in the 4th year of it's life doing about 15,000 miles in a year cost us on average £415 a month. That's depreciation, fuel, maintenance, tyres, insurance. We bought it brand new, for the whole of it's life the figure works out at about £450 a month, that figure comes down the longer you keep the car provided no nasty big repair bills arrive. Changing the 35mpg petrol car for a 45mpg diesel car doesn't actually make a huge difference to the long term real cost, people are too sensitive about fuel costs sometimes.
Not a car you will consider but, in the long run buying a year old Audi A6 V8 petrol is cheaper than the 3.0 diesel because the purchase price of the V8 is so much lower. Also big complicated diesels have a habit of big repair bills 80K-120K miles upwards.