New Life Pending.....

Lemon_Tree

Fingers crossed the contract arrives soon

ohdearhowdidthathappen

Fingers crossed contract comes soon, 3 months is a killer notice period, such a long time! Do you think your current employer has an inkling you're thinking of leaving?

Iwantanewlife

Morning!

Oh yes definitely, they’ve already tried to offer me a retention bonus if I stayed and that was about a month ago. Yes, 3 months is less than ideal!

[Deleted User]

Iwantanewlife wrote: »

So...........

I GOT OFFERED THE JOB!!!!!!!!!!!!

Congratulations!!

:j:beer::T

Iwantanewlife

Good Morning All

So organising the finer details of the new role. I have been offered a company car (BMW 3 series) or a company car allowance of £500 per month to buy my own. I think although i pay higher tax, whilst im saving im going to stick with the company car option. It means i dont have to think about maintenance, insurance etc although it technically comes out through tax. Then i will keep budgeting, eventually save for a car to buy cash and pocket the £500 for insurance, maintenance and a bit extra.

Does this sound sensible? The thought of getting car finance (as obviously i dont have any savings) is putting me off, although the flip side is, the company is technically paying for the finance. My worry is, what if i lost my job or moved on or just 'life happened' I would be stuck with loads of debt!

opinions appreciated x

enthusiasticsaver

I would go for the company car although as you say you will be taxed on it. Maybe get a quote up as to how much the tax will be?

ohdearhowdidthathappen

My Dad always took the car allowance option; he used it to get a cheap lease car (whatever was the best offer at the time!), insured it etc and always had a couple of hundred pound a month left over.
I believe if you take a company car, the tax varies depending on the type of car and I think you have to fill in a tax return. Not 100% on that though!

Iwantanewlife

Thanks for the replies.

I have a company car now, Audi A4, so on the same level as the BMW, and I pay about £200 extra in tax per month for it. However, this includes all servicing insurance etc.

I was going to look at car leasing, however, surely that is simply renting something that i could actually gain as an asset? Its funny before i started this journey, i always used to say why would anyone own anything that depreciates (sold cars many moons ago, and this was one of our biggest sales lines) but now im thinking that actually it results in an asset that someone else has ultimately paid for. However, i do not want to go into debt for it, which is why i was thinking i should save for a year and buy outright then pocket the money. Of course, the flaw in that plan is it will delay my house fund for a year!

enthusiasticsaver

Iwantanewlife wrote: »

Thanks for the replies.

I have a company car now, Audi A4, so on the same level as the BMW, and I pay about £200 extra in tax per month for it. However, this includes all servicing insurance etc.

I was going to look at car leasing, however, surely that is simply renting something that i could actually gain as an asset? Its funny before i started this journey, i always used to say why would anyone own anything that depreciates (sold cars many moons ago, and this was one of our biggest sales lines) but now im thinking that actually it results in an asset that someone else has ultimately paid for. However, i do not want to go into debt for it, which is why i was thinking i should save for a year and buy outright then pocket the money. Of course, the flaw in that plan is it will delay my house fund for a year!

The ideal way of buying a car is to pay outright in cash which in real life is quite difficult for most unless you go for a relatively cheap car. The second best way is a 0% credit card or money transfer card if you have to borrow and third is a low rate personal loan. For you the problem with that is you do not want to take on debt (understandably) you have no deposit or existing car to trade in and your credit rating is probably not great.

To lease a car is as you say dead money and you are tied into a deal as you are with PCP or any of the other usually excruciatingly expensive ways of buying a heavily depreciating asset.

I think in your position I would go for the company car as technically it is not debt (although it will still cost you in tax), if anything happens and you don't like the job or something happens you would just give the car back rather than be saddled with a loan or lease payment you cannot get out of and it will not derail your plans to save for a house.

You have to prioritise really. Car or house. It will take you a while to save up a house deposit and ideally you want your credit record to be clean so you can get a good mortgage rate. If you will be starting your new job in January you only have 3 months to save for a car so that is not going to happen and signing up to an expensive car finance deal is not ideal when you have not even started the new job. As you say the worst scenario is not wanting to stay in the role or the job going but having a large finance deal to service.

PurpleFairy26

I too would go with the company car for now. The amount you are taxed is based on the p11d value of the car and the CO2 emissions. If you have free fuel this is based on the emissions and fuel type. I would ask them if they can supply that information so you can calculate in advance versus what you pay now. Use the gov.uk calculator.

Once you know a) how much you are using the car for both work and personal and b) how economical it is on fuel you can always make a decision down the line to change (assuming you can opt for cash later - worth checking their policy on this)

Then you could choose to use some of your savings (that you'll have by then ) for a car and use the cash allowance to pay yourself back. Remember you get taxed on that too, so would need to calculate the net swing of no car tax -v- take home pay of the £500 to work out what it's worth to you.

Maybe worth asking if they have any hybrids in their fleet, anything sub 75g of CO2 is definitely going to reduce the car tax. Also, I don't know how long ago you got your current car, but something called OpERA is now in play, meaning you get taxed on the higher of your possible cash allowance or car tax whichever is the higher, so it's worth calculating that too so there are no nasty surprises. Feel free to PM me if you need anymore info.