Company Car versus Car Allowance

AHWBeverley

Bought a small car in February of this year for around £8k, I've now been offered a permanent contract which comes with a Company Car or Car Allowance and I can opt into to cover all Private Mileage.

If I take the Company Car I would obviously have to get rid of my current car and the vaules I'm getting are around £5.5k to sell it on via Webuyanycar or similar. Could sell privately though.

However, I can instead take the Car Allowance at about £450 a month. (no finance outstanding).

I think the Car I would want as an option would be a VW Golf GT 2.0 TDI 65.7mpg and 114g/km emissions, as a 40% tax payer I think this would cost me around £170 a month in increased Tax.

Advice / suggestions?

Many thanks

no_more_cards_for_me

Take the car allowance and keep your own car.

rodenal

The car has always worked out for me over an allowance - doing a highish mileage per year takes alot out of any car over a couple of years old with the cost of tyres / increasing fuel / insurance etc etc pushing it over the limit even with the per mile payment added on.

If you only do a few miles or better don't actually have to take the car to work (i.e the allowance is a pure benefit) then you might be better off keeping what you've got

AHWBeverley

Its starting to become a decision of Revenue over Capital.

Take the Company Car and sell current car = Cash for home inprovements
Take Car Allownace = Money to save up for next car.....

Lum

There's also the convenience aspect. Car needs a service or repair? As it's a company vehicle it's a lot easier to justify doing it in work time.

Car breaks down and you can't get to work? company's fault.

Someone drives into the back of you and turns out to be uninsured? Doesn't cost you a penny.

Don't forget that your car allowance is taxed at 40% as well.


Do also need to consider the downsides though, it may well end up costing more and if you're in this job for 2 years then your no claims bonus will expire, limiting your choice of insurers to those that accept company car time to give you an initial NCB.