Car allowance

SLITHER99

Short story: moving job which requires travel and told that I am eligible for a £400pcm car allowance to get a car for the purpose. It has to be under 3 years old, in warranty, etc... so basically a lease car.

Two questions (that I think I already know the answer to, but want to make sure) as I'm considering it.

If I go and get a lease car, bear in mind this is a car allowance paid monthly with my salary, would the full value of the car show up on MY credit report? I want to remortgage early next year and don't really want a £20k car showing up on my credit report and losing out on a mortgage deal.

Secondly - never done a lease before - if I decided to move on from the role in 6-12 months say, what happens to the lease? Am I under obligation to keep the car a full three years at lease prices, or is it the kind of thing where you can just hand the car back anytime and all is done?

The alternative is to get my own cheapy bangermobile and charge them mileage at 45p a mile which I'm thinking may be the better option.

Edit: Clarification. The options are either £400pcm car allowance and 13p a mile petrol, or use my own car and charge 45p a mile. And to further clarify, at the moment I have no car but a budget of around £1800-2000.

CAN1976

Dunno about some of the questions, but if you get car allowance it isn't 45p a mile, it's more like 15p

OddballJamie

I also get 45p a mile if I do any business mileage, all depends how much you will be doing and how economical and reliable your current car is.

Also your insurance will need to know of change in use and any increase in mileage.

BTW Can1976 have a look at this
http://www.hmrc.gov.uk/payerti/exb/a-z/m/mileage-expenses.htm

SLITHER99

I have no car at the moment. I have a budget of around £1800 which would probably go on something Nissan or Honda shaped. That's if I took the mileage.

OddballJamie

A diesel Skoda Octavia would make a decent used buy to cash in on the 45p a mile.

It might be the better option if you are planning on switching jobs again or lose your current job, as you would then be responsible for the repayments until the lease agreement ended (normally 2-3 years).
What sort of mileage are you expecting to do? Personal/business?

Hintza

If you use your own car will it not have to be under 3 years old? If you are representing the company it might very well have to be.

goonarmy

The allowance is for you to get a car and the milage is for a car for you. Does the company offer company cars? Cos they are asking for you to do all the donkey work.

SLITHER99

Nope, no company cars. Only options are:
- £400 pcm car allowance and 13ppm
- 45ppm if I use my own car.

From what I've read around the net, as this is part of my salary and there's obviously the need for business insurance and emissions taxes (???), £400 is apparently a little on the low side with those limitations.

I'm thinking I'll be better off buying something for £1800 and just running it and claiming mileage. At least there isn't the requirement to put my credit on the line for any reason.

I have no idea if there are any "requirements" about my car in terms of age and warranty. I would assume not. I'm not a salesman and if it's an issue, given our clientele, I'll most likely be using public car parks anyway!

straas

Business mileage doesn't make much difference to my insurance, but then I'm sure it depends what your job is.

Remember your £400/ month is taxed, so it's effectively £320/month.

If you go for a bigger engined car, the 16ppm will just about cover the mileage.

Although if you go for the 45ppm be aware that it drops to 25ppm after the first 10,000 miles.

AdrianC

SLITHER99 wrote: »

If I go and get a lease car, bear in mind this is a car allowance paid monthly with my salary, would the full value of the car show up on MY credit report?

Secondly - never done a lease before - if I decided to move on from the role in 6-12 months say, what happens to the lease?

The lease is YOUR personal lease. The fact that your employer would be paying towards it doesn't affect that. You are contracting, personally, with the dealer for the full duration of the lease.

I'm a little confused, though - you say that the car needs to be <3yo, in warranty. Then you say that there's no restrictions on it. I'd be surprised if there was that big a difference between the requirements whether they pay you an allowance or just mileage. It also seems odd to have such stringent requirements on the car you supply, but not to offer a co.car alternative.

SLITHER99

AdrianC wrote: »

The lease is YOUR personal lease. The fact that your employer would be paying towards it doesn't affect that. You are contracting, personally, with the dealer for the full duration of the lease.

I'm a little confused, though - you say that the car needs to be <3yo, in warranty. Then you say that there's no restrictions on it. I'd be surprised if there was that big a difference between the requirements whether they pay you an allowance or just mileage. It also seems odd to have such stringent requirements on the car you supply, but not to offer a co.car alternative.

Sorry, think you may have misread. If I take the car allowance, there are conditions upon which the car needs to tick certain boxes, such as <3yo, warranty, business insurance. If I use my own car, there are no restrictions (will need to double-check).

The fact the lease is in my name doesn't hurt me that much, but the fact that such a lease would show £20k of credit on my credit report is a deal breaker and will probably use my own car. I have £2000 saved up to get a new motor, I'm sure I can get something diesel, Japanese and reliable for that if all I'm going to do is cane it in miles.

As for no company car, I think this is my company's way of doing things as cheaply as they can get away with. In fact any time I have been away, my receipts and expenses have been surveyed with the utmost scrutiny! I once argued a £2.00 toll receipt as they claimed I should have come back by an alternative route (i.e. not the M25).