Car leasing/Car allowences

TooledUP

Hi,

I am a bit new to this so you will have to bear with me.

I may be moving to a new job and it comes with an annual car allowance of 6-7K.

I have never had this before, but is it as simple as picking a car, paying the insurance and driving it ?

What sort of car could I get for 6K including servicing and insurance? I don't mind putting some towards it myself, and fancy a performance car of some sort, but reasonable milage.

Cheers

JQ.

On the £6k I get per annum I run a Ford C-Max diesel and a 260bhp MX5 trackday car.

Subject to the terms of your company policy you can get whatever car you want. The car I use for business purposes is my 17yr old 2 seater convertible and the wife has the sensible car. So your question is far too open ended for anyone to give you any useful advice. The MSE advice would be to spend £4,000 on a reliable economical supermini and pocket the rest of the cash.

What car do you want?

TooledUP

Well it's my first time so be gentle

I quite fancy an Audi A4 1.8 TDi Diesel or similar (Just shopping)
However if I have to foot the insurance out the cost as well, it's going to be a close call.

I suspect I would be doing about 20K miles a year ( An educated guess)

I have never had a new car before, so I think I would just like to have something a bit tasty.

marlot

Don't forget you'll be taxed on the car allowance, so it'll be rather less than £6k by the time its in your pocket.

Before you decide, it is worth reading up their rules - some companies insist the car used has to be less than 4 years old, 4 doors etc.

And don't forget that if you and the company part ways for any reason, you're left with the car. If you've decided to lease, you will have limited options for sending it back.

I used the payments to finance the car I really wanted. But I was in the happy position of having enough savings to buy the car, and I just used the car allowance to build my savings back up over the following 4 years.

JQ.

I think you'll struggle for an Audi A4 - a basic one will cost you £420pcm, then add on maintenance and insurance and you could be at £500pcm. Your £6,000pa will only equate to circa £350pcm (low rate tax payer) or £250pcm (high rate tax payer).

You need to work out your budget and then apply that appropriately. When I started taking the car allowance I had previously had a company car for 12 years, the last one costing me over £300pcm in Car Tax, so my net pay actually went up by £550pcm giving me a more generous budget. If you already have a car it could be worth calculating how much that costs you per annum and add that to your budget.

Do you really need a brand new car, this is MSE after all? The biggest cost of owning a new car is depreciation. Get a 3 yr old car and it will cost considerably less to own than a new one. I bought the C-Max at auction when it was 3 years old and therefore got it at a good price, thereby offsetting depreciation, the total cost of running it (excluding fuel) has been £135pcm for a car that was only 3 years old, had done less than 10,000 miles, was in mint condition and cost £18,000 when new. The total cost of running a brand new £18,000 car for 20,000 miles per annum would be circa £400pcm - so quite a big difference.

ian103

surely you need to take account of the comapny car tax you are not paying as you have a car allowance. i've run a honda civic and made money on a car allowance, an mx5 that cost me a few quid extra but it was fun and a toyota avensis that was fairly cost neutral but it was boring and i missed my mx5