Buying a car for work use as losing co car

NameUnavailable

I currently have a company car (which they lease). It is due for replacement in a couple of months time and as the internal rules have changed, they are not giving me another car but a monthly car allowance instead.

I am required to have a new or couple of years old car, 4/5 door 'family' type model.

The personal lease options seem expensive when you consider the total cost (if you were to buy the car at the end of the lease) and I'm inclined to buy a 'cheap' new car with a standard car loan/HP. I've looked at the Dacia Sandero and also the MG3.

At least this way I will own an asset after the loan period and no worries about lease conditions/mileage penalties etc.

Any options/thoughts I could consider? Anyone had experience of the Dacia/MG?

DullGreyGuy

You typically cannot buy a car at the end of a lease, it would cause the lease company a host of issues with HMRC. You may be thinking of PCP which legally isnt a lease but has a balloon payment you can either pay to get the car or hand the car back and walk away.

Ultimately explore PCP, PCH, HP and independent finance... each can be cheaper in different circumstances. It also depends on if you want to be forced to own the asset at the end given the requirement for the car to be relatively new. 

Our last car was on PCP and half way through the vehicle was discontinued and a major facelift launched with a different model name and engine. When it came to the end the forecourt prices were massively below the balloon payment so we could simply walk away. Had it been HP the monthly payments would have been higher and we'd have been forced to buy a much more depreciated asset than had been anticipated when entering the agreement. 

Bigphil1474

It's worth checking your employers rules. I use my car for work (known as grey fleet). There are no restrictions on the type of car I have to use. I've had 15 year old bangers, and everything in between. Had my current 5 year old car for 3 years. Are they paying towards the car, hence the restrictions, or is it just a general rule? If the latter, are they suggesting that you can't keep the car for say 10 years as it would be more than a couple of years old? 
Where I work I get a monthly lump sum and a mileage payment. My employer does have a car loan scheme at a preferential rate, but the loan scheme does require that I buy a car less than 3 years old. They can't make me have a newer car if I'm just getting the lump sum and mileage payment, but they can if I get the loan. 

NameUnavailable

Bigphil1474 said:

It's worth checking your employers rules. I use my car for work (known as grey fleet). There are no restrictions on the type of car I have to use. I've had 15 year old bangers, and everything in between. Had my current 5 year old car for 3 years. Are they paying towards the car, hence the restrictions, or is it just a general rule? If the latter, are they suggesting that you can't keep the car for say 10 years as it would be more than a couple of years old? 
Where I work I get a monthly lump sum and a mileage payment. My employer does have a car loan scheme at a preferential rate, but the loan scheme does require that I buy a car less than 3 years old. They can't make me have a newer car if I'm just getting the lump sum and mileage payment, but they can if I get the loan. 

That's interesting. As I understand it I'm getting a monthly amount on top of my existing salary in lieu of the car (to pay for a car lease/loan and insurance etc). The rules I recall hearing about when this was last mooted a few years ago was that they had to approve the make/model and it had be be less than 4 years old (the implication being if it was 3 years old you would be required to change again after a year, although I know some colleagues have cars that are now over this and haven't been questioned).

I have asked if there's any criteria when buying your own vehicle (in case things have changed) and waiting to hear back.

Bigphil1474

Sounds like they are paying for the car as well as possibly paying for you to use the car (per mile payment?), so would be reasonable for them to require a car of a certain age (stops you profiting from the scheme in theory).
If it was me, I'd get a no hassle lease if the cost was the same or less than the payment you are receiving, that way you can replace the car every few years and it isn't actually costing you anything. They might be happy for you to buy your own car, but that might mean they pay you less. Hopefully, it works in your favour.

NameUnavailable

Bigphil1474 said:

Sounds like they are paying for the car as well as possibly paying for you to use the car (per mile payment?), so would be reasonable for them to require a car of a certain age (stops you profiting from the scheme in theory).
If it was me, I'd get a no hassle lease if the cost was the same or less than the payment you are receiving, that way you can replace the car every few years and it isn't actually costing you anything. They might be happy for you to buy your own car, but that might mean they pay you less. Hopefully, it works in your favour.

It's not a case of profiting - the payment has to cover the cost of the car, tax, insurance and maintenance. The mileage allowance is to cover fuel costs only. I can choose to get a much more expensive car but I pay the extra myself. It's very unlikely that I will profit even if I buy the cheapest new car once the other costs are taken into account.

Bigphil1474

I meant that you could profit if they didn't specify that you need a new/nearly new car. If they gave you £300 a month to provide any car and you bought a £1k banger, you'd be in profit after a few months.
I get a lump sum which covers a pro rata for car depreciation, insurance, repairs etc. and a mileage payment which covers the rest for the work mileage I do (currently 40.9p a mile). If you get fuel only, you'll get about 15p a mile.