Company car or car allowance - a new angle

DriverJames

Hi all

I work in an out-based role and my employer offers a choice of a company car all cost included or a £5k a year allowance with which to provide my own car and cover all costs.

I started the job four years' ago and immediately bought a new car on a four-year, 0% interest finance deal. I will make the final payment next month.

So, the dilemma is as follows: continue on the scheme for two more years and feel the benefit of the extra £240 per month that won't be paying for the finance or sell the car for maybe £4k then get a company car?

Any thoughts?

getmore4less

Not enough financial info.

whats the goal, nice car or money?


start with the full financial costs so far and work through a forward what if plan, keep the car, get a new one, get a company car.

withabix

...and what's the company car?


Also, did you claim tax relief for the last 4 years' business mileage?

hcb42

if you now own the car in full and have done since new, personally I would keep going and save the money, even for a year or so.

planning303

It might be worth mentioning at this point (just for anyone that comes across this thread).. that the money they are giving you is partly to go towards the increased insurance costs felt by anyone in your situation because you would not be covered under a SDP/communiting insurance policy.

You would require business insurance that specifically covers for driving for someone elses business (aposed to your own business)

cassie55

planning303 wrote: »

It might be worth mentioning at this point (just for anyone that comes across this thread).. that the money they are giving you is partly to go towards the increased insurance costs felt by anyone in your situation because you would not be covered under a SDP/communiting insurance policy.

You would require business insurance that specifically covers for driving for someone elses business (aposed to your own business)

It depends on the insurance company.

When I was offered the same choice (company car or car allowance plus mileage), I called the insurance co to ask how much it would cost to add business use to the SDP and commuting and they said they provided it at no extra charge and sent me a new certifcate.

DriverJames

Indeed. Business mileage is no extra charge for me.

Thanks for all replies thus far.

I'm going to sell. I'm going to lose a net £333 per month from my salary but I never saw £225 of that anyway because of the finance payments. My car has been a workhorse for me doing 20,000 miles a year but the quirky French design and technology will surely cost me many hundreds of pounds in servicing over the next two warranty-free years. And my insurance premiums leapt after a small, one-car accident on the ice last winter. I can cash in and browse the fleet catalogue with a bit of luck ;0)

getmore4less

It's not just the car allowance you loose.

Your tax bill will also go up.