Company Car Vs Car allowance

andymcgowan

Hello, looking for some advice please. Currently I have a company car, specifics below.

Tesla model 3.
Contribute roughly £180pm towards this.
Drive circa 12k miles per year but cannot claim for any electric mileage from work.
Income circa £90k
Electric rate for charging is 9p kwh.
Have to use service station charges sometimes, maybe £20 - £30 pm and again cannot claim back.

Option to take a car allowance instead of £500pm.
Would need a down payment of £2.5k then monthly PCP payment of £499. 
Insurance circa £800 pa.
Warranty roughly that again.
I could claim mileage at 9ppm from work.
Would be responsible for all service costs and tyres, road tax etc.

I cannot workout which is the better option and by how much I'm better off, any help appreciated.

Thanks

prettyandfluffy

What is your annual business mileage?

Veteransaver

Your car allowance would be subject to ni and income tax so would depend a lot on whether the £500 a month takes you into the higher tax bracket, assume it would if your income is 90k unless you make significant pension contributions.

Company electric car only attracts BIk of 1%/2% at the moment

So of the 500pm you'd only see 58% of it so £290 net.
So a shortfall of £209 a month less the £180 you currently pay (assuming that £180 a month is paid from your after tax income)

Tax on model 3 bik currently about £14 of month at 1%, £28 a month at 2%

So I think you are still slightly better off with the company car even before you consider insurance and maintenance costs, and the hefty deposit.

Unless you do big mileage and can get 45p a mile for business (your company only paying 9p seems too low imo) but you will be restricted by the mileage anyway per the lease/pcp so excess mileage charges could eat into that 45p a mile "profit" anyway.

Is your 12k miles a year all business miles? If it is then what is your personal milage and is that covered by the lease/PCP terms.

Also if you lost your job you'd still need to pay for the Tesla, whereas if it's a company car you wouldn't.

Veteransaver

It can however make sense to take the car allowance and get a cheaper car. There are some EVs available for lease under £300 a month, or buy something second hand of course.

Bigphil1474

OP, if the company don't have any limitations on the car you can use for work, I'd take the car allowance, buy a 3 year old hybrid or ICE car, and profiteer from the allowance scheme.

If you are doing 12k miles a year but getting £500pm allowance, then your mileage rate appears to be bundled into the allowance. As an example, I get 41p a mile but £80 a month allowance. For 12k miles, you'd get just over £7k, I'd get just under £6k. Your tax free element would be £5.4k. The higher allowance more than offsets the low mileage rate. 

If you want a shiny new Tesla 3 all the time and no hassle, take the company car.

Stateofart

This website works quite well and might answer a few questions.  

https://comcar.co.uk/cashorcar/simple/

andymcgowan

Thank you all, feedback is much appreciated. Business mileage is approximately 9k and 3k personal. I do have the option to contribute slightly more and get a nicer company car, as someone mentioned above if I part ways with the company (not that I've any intention of doing so) then I can simply hand back the keys. 

Lots of food for thought.