Company car allowance - age clause

DD265

I've worked for my employer for several years, and they have recently offered me a car allowance which I haven't had previously. However, a contractual element of this is that the car cannot be more than 6 years old - mine is about to turn 15. There is a statement that exceptions will be considered on a case by case basis.

I go to see customers occasionally but IMO not enough to justify the car allowance. I think it was offered as a means of effectively increasing my basic salary, but my manager also acknowledged that I do a lot of driving as I don't live local to any of our offices.

I am not in a position to change cars (and certainly not to one so young) nor do I see any reason to. My car is a very well maintained Golf that I purchased a year ago. I keep it clean inside and out, I get it serviced twice a year based on mileage, the economy/tax are reasonable (diesel) and it just passed it's MOT with flying colours. It also has a personalised number plate so at a glance you wouldn't know it's age.

I don't know whether I should say anything and potentially even decline the car allowance? What would you do?

fatrab

Previous company that I worked for had a 10 year rule, but if you paid to have the car inspected by their authorised centre (it was through an autocare centre like Halfrauds) then the car was accepted under the allowance scheme. I think the inspection cost £30 iirc.

Current employer has also has a 10 year rule but in their case if it's over 10yrs then they deduct 10% from the allowance.

I'd enquire exactly what is their criteria for the car to be accepted. No point losing out if you can get the allowance with the car you've got.

Best of luck

caprikid1

" It also has a personalised number plate so at a glance you wouldn't know it's age."


Owning a 15 year old golf very few people would not know it to be an old car.


If companies give people the money to buy a newish reliable car they don't expect them to pocket the difference and buy a £1000 banger. I on the other hand do not have a car allowance and the car is effectively paid for by the company based on the mileage allowance.


How often do you visit customers ? , speak to your manager and ask if they would make an exception ?


It could be that if the allowance is sufficient you just hire a car to visit important customers ?

laidbackgjr

It's not just about reputation / prestige when you visit customers - it's also about the employer's HSSE responsibilities - Newer cars are generally safer and ensuring employee's are in safe vehicles when travelling on company business is a legislative requirement.

fatrab

laidbackgjr wrote: »

It's not just about reputation / prestige when you visit customers - it's also about the employer's HSSE responsibilities - Newer cars are generally safer and ensuring employee's are in safe vehicles when travelling on company business is a legislative requirement.

If you opt for car allowance it becomes the employee's responsibility to ensure the vehicle is maintained and kept in a safe, roadworthy condition. An annual MOT covers the legislative requirement.

Most companies I know of are trying to dissuade employees from older vehicles as they're going down the "Carbon Footprint" route, on the principle that newer cars are more efficient.

DD265

I'll email HR and ask for a chat about it

I've been able to run the car mostly using the expenses I've been claiming. I have zero budget for a new car so if I were to look at finance again, what cars should I be looking at? I do circa 24k a year, the Golf TDI 1.9 5 door that I have now is pretty perfect in terms of size, power etc.

I'll get an idea of what I'd be looking at cost wise, plus go back to check the costs of running mine then if I have to weigh up car allowance vs no car allowance I can make a more informed decision. My gut tells me that car finance is not a trap I want to spring right now! They are typically a very reasonable company to work for so fingers crossed.

ETA - I've been spoilt having an automatic this time so that's a strong preference. Prior to this I had a (new on PCP) Nissan Note which was again a good size and good economy but I prefer the weight of the Golf. I've noticed that the newer Polos seem comparable size wise to the older Golfs so I wouldn't be against a 'downgrade' in terms of model.

System

fatrab wrote: »

If you opt for car allowance it becomes the employee's responsibility to ensure the vehicle is maintained and kept in a safe, roadworthy condition. An annual MOT covers the legislative requirement.

No it doesn't. You can have a MOT and drive around in a completely unroadworthy vehicle. A MOT is an indication of the condition of the vehicle at the time of the test only. You could drive down the road and both the headlight bulbs blow that night. You now have an unroadworthy vehicle even though it has a MOT does NOT meet the legislative requirements. You could do 20,000 miles a year and those tyres which passed the MOT with 2mm of tread could be bald within a couple of months - you then have an unroadworthy vehicle with a MOT which does NOT meet the legislative requirements.

caprikid1

What per mile rate do you get ? How many do you claim per annum ?

DD265

caprikid1 wrote: »

What per mile rate do you get ? How many do you claim per annum ?

Currently 45ppm, on average I'd probably claim 12000 miles a year.

With the car allowance of £350 pcm (I am a basic rate tax payer with a low risk of crossing the threshold into higher rate) I'd claim 25ppm.

My maths puts me at about £900 better off in terms of what I'd bring home if I take the car allowance and maintain my current level of mileage.

caprikid1

My maths puts me at about £900 better off if I take the car allowance and maintain my current level of mileage.


Only if they allow you to use your current car, if you were to be putting c20-25000 on a new car (Personal and Claimed) then it will depreciate a lot more than £900 and certainly not be zero maintenance.

DD265

caprikid1 wrote: »

Only if they allow you to use your current car, if you were to be putting c20-25000 on a new car (Personal and Claimed) then it will depreciate a lot more than £900 and certainly not be zero maintenance.

That is a good point - I was thinking of working out the PCP costs plus fuel/basic maintenance but totally forgot depreciation. Am I right in thinking that my PCP would be more expensive because the value of the car at the end of the term would be significantly lower than 'normal', so I'll never get the deals I see online anyway?

I think I'll cross my toes too :rotfl: