Advice on relocation and Motoring MSE

mark55man

My work have offered to relocate me (change of contract base office rather than me actually moving house or work). This involves a relocation allowance of 75% of last years mileage claim or £2000/10000 miles for the next 5 years. In 5 years time I will either be retired or very very disappointed (much more so than losing out on a bit of mileage!!).

So my challenge is, how to arrange my motoring so that in 5 years time I am up on the deal - ie they will have paid me more in relocation than I would have claimed in mileage. At worst nearly broken even. Clearly in year 6 I will start being very much down on the deal - but as above I am not worried about that !!

In my simplistic way of thinking I would have to make savings of 33% each year as without changing anything I would be getting £1500 instead of £2000. So is this doable?

My current situation is I have a 4 year old car (Astra 5 door 1.6) with 60,000 miles on. I see the following main options
* There are shorter (mileage) but longer (timewise) routes I could take - (current claim is based on the quickest so this would save miles at the cost of minutes)
* I could WFH - but realistically I could only do that once or tweice a month (but still that's 5% a day) - this woud obviously save a whole days travel, but work would not like it too much
* I could change my car - electric/hybrid are tempting green wise but I would be looking at a no net extra cost for my astra sale and then other vehicle purchase
* more economical driving (I'm not too bad at the moment)

So thanks for reading - interested in detailed comments or seat of the pants "it'll never work" sort of reactions. I think I am most interested inthe hybrid side of things, as the rest is spreadsheets and costs and I can juggle those numbers, but the new green way of motoring is new to me

Finally, I have thought about bangernomics (I have some form in this respect) but I don't think I am looking to wheeler-dealer my way out of this - I would ideally like to make at most one change to the vehicle, and as above that would be green(er)

System

1) KEEP YOUR CAR.

2) SEE 1.

Depreciation is your biggest cost and on a new car it will outweigh any savings you would make on fuel even if you went from doing 15000 miles a year in a quite uneconomical car to free fuel. Depreciation on my Mondeo in the first 2 years cost the first owner £16,000. I bought it for £8500, I've owned it for over 6 years, its worth £2k so its cost me an average of roughly £1000 a year in depreciation. I've done almost 100,000 miles in it with it now having 133k on with only a few £100 in non consumable repair costs and other than that its been servicing, brakes, tyres and this week shock absorbers.

mark55man

That would be my preference. But looking at some hybrids at around the same trade in price of around £6k there are some at 70 mpg which is almost double my current miles. So noting and agreeing with don't buy a fully priced new car I am not adverse to swapping at as near to no cost.

Although to be fair I could do that without the relocation deal so maybe I need to think a bit harder

tacpot12

So, work have offered to relocate you in exchange for a specific amount of money but are not insisting that you change office? If so, why not just leave things as they are rather than taking a risk that might or might not be better for you?

mark55man

True - its part of some big Head Office plan - the other objectives of which I kind of agree with, and certainly don't want to object to, but not unhappy to make some cash from a change of habits if I can

System

mark88man wrote: »

That would be my preference. But looking at some hybrids at around the same trade in price of around £6k there are some at 70 mpg which is almost double my current miles. So noting and agreeing with don't buy a fully priced new car I am not adverse to swapping at as near to no cost.

Its simply a case of crunching the numbers. Find an equivalent as possible model to what you intend to get that's 4/5/6 years old, even if it is a previous generation of that car, to get an idea of the rate of depreciation.

The saving of your fuel isn't going to be as much as you think. I have two cars, one does 37MPG, the other does 55MPG, I do 17k a year so a lot of miles. To do that mileage in just one or the other of those cars at todays prices at £1.28/l for petrol and £1.31/l for diesel it would cost me £1839 in the diesel and £2674 in the petrol car so the diesel would save me just £835 over 17,000 miles despite its fuel economy being 50% better than the petrol. Depreciation alone on a fairly new car no matter how economical it would be even if it ran on air would wipe out that kind of saving on fuel and then some. As I said earlier, I bought my car for just 1/3 of its new price and I've owned it over half a decade and even with that the annual depreciation is more than that £835 saving in fuel.

You pretty much never save money buying a new/nearly new car to replace an older one, even an older one that does MPGs in the 20's and you spend several hundred quid a year to repair. New cars provide just two things, they're generally a nicer place to be in than a high miler and also not having the inconvenience of breaking down, not that a well maintained old car should be doing that anyway.

mark55man

Spent this morning crunching the numbers - which was fun !!

A combination of 1 WFH day a month and 1 cycle/train to work a month (marginally longer time wise if everything goes perfect) will save

• For WFH £25 a go for the journey of 100 miles (costs based on 1.6 petrol astra of £0.15p per mile + 10p mile general depreciation). Astra is 4 years old with 60000 miles
• For Cycle/Train - £10 a go (Railcard ticket cost £15 - cycle both ways - no cost - got all the kit already - or maybe a one off spend on more high viz)
• In addition there is a 10 mile shorter distance longer time drive to work that is very busy in the morning but getting up even earlier would avoid that rush. That would be another £6 a return journey saved. I would do this daily.

In combination all the above would save £150 a month against my current travel costs. And would see me cost neutral against the relocation package well into year 6

In terms of flex -

• I wouldn't/couldn't choose to do more than 1 day WFH a month
• The other savings would be achievable by doing more of them !!

Doing these changes dont make sense financially whilst I can cover the cost on expenses, but do make sense, and are much greener if I move to relocation. So I think that's a win- even though I know after the relocation funding will end and these will be genuine ongoing costs (except as above I hope to be retired by then).

If I am more aggressive in saving (ie train/cycle once a week - always do the shorter journey) I will build up a buffer that leaves me a gratifying amount up on the deal in the early years.

I am still toying with the idea of a greener car but as Tarambor states the costs of changing are not insignificant even if its like for like, and if the train goes well - and in summer it could be every day during a nice spell - then the advantages of swapping are less.

Thanks everyone for your advice, and it pleases me that there are greener ways of saving money - if I can just make a change to my behaviour