Cash or car

trigd

About to start a new job and have been offered company car or allowance & mileage payments. I do approx 25k/yr.

Have done some sums and I can make it pay but does anybody have any advice?? Any thoughts on which is best?? Any experience with car allowance?

Thanks

anewman

Cash - you own the car.

Hagar_uk

trigd wrote: »

About to start a new job and have been offered company car or allowance & mileage payments. I do approx 25k/yr.

Have done some sums and I can make it pay but does anybody have any advice?? Any thoughts on which is best?? Any experience with car allowance?

Thanks

Impossible to say there are a lot of factors,
Your tax bracket
amount of private miles you do, and if you get free fuel for this
And of course how much they are offering.
If you go for the allowance you have to think it covers the actual cost of the car, wear and tear, servicing tax insurance etc.

If it breaks down, and off the road you will have to forkout for a hire car, where as typically with a company car (at least in my case) a hire car turns up until the company car is back on the road

goldspanners

and when it requires mot,servicing,maintenance,who pays for this and when is it done,in your time,work time?
personally if i was given the choice i would take the company car.

Gavioli_UK

Currently the Customs and Excise will not tax you on mileage rates up to 40p per mile.

There is a feeling that this amount will be reduced in the near future (I think there is a consultation paper out on the subject but can't find reference to it at the moment) to encourage staff who need to travel to go for fuel efficient, low emmission cars, or use public transport (laugh). The recent VED increases probably are part of the reasoning for this.

So you need to calculate the lowest cost per mile you can run your car as it looks as though you will be getting less in the future.

PhilL_3

As per your thread title, try www.cashorcar.co.uk which should help you decide.

Obviously without knowing the details of what you have been offered it's difficult to comment, but company cars tend to make more sense the more miles you do; so for 25k a year it 'might' be the best way to go.

pipo

Hi – newbie here so please be gentle.

Have recently read a lot of posts and replies about company cars v car allowance so I thought I would just reply to this thread instead of starting a new one. Still feeling none the wiser, I thought I’d share my dilemma/SOA as concisely and with as much detail as I can so you guys could help. Here goes:

• I have the option at work to receive either a company car or a car allowance on top of my basic, which is £21,750
• Car allowance is £448 p/m gross, which works out at £350 p/m after tax. Currently I am receiving the car allowance so my take home is £1677 approx pcm
• If I opted for company car I would get either the hatchbacks (Astra/Focus) and my tax works out at £45 p/m or the bigger cars (Mondeo/Vectra) at £70 p/m
• Business mileage for my current car is paid at 11ppm
• I do 20k business miles per year, plus probably another 12k personal miles (most of my friends are dotted round the country). Added to that is the fact that I will be partly working from home soon, which means that I will have to travel 90 miles each way to the office 1 or 2 days a week as well.

Now I was thinking of selling my R-reg Vauxhall Tigra @ 74,000 miles, worth around £700-800 (don’t laugh) in June when I get my pay rise (95% guaranteed according to my manager, up to £25k) and get the company car but there is still some lingering feeling that I should carry on with the car allowance seeing as though I can get things such as tax relief on business mileage up to 40ppm I believe. Although can you put a price on peace of mind that the company car will bring?

Any help/suggestions/ideas would be gratefully received.

Thunderbird_2

11p/mile seems barely covering petrol money. The monthly allowance of £350 is a bit acceptable. If you are debt free, and the car is relaible, then I would say go for cash. Set up a standing order to put all the monthly allownce received into a saving account so that you can live within your means easily without touching the car allownce which is there to maintain the car and pay for extra cost of insurance due to business miles. Give it a go for a year and see how you get on.

Selling the car and losing the monthly allowance will not be my choice. I will keep the car and consider it generating some revenue in the form of the monthly allownce and if it didn't break down in a year's time, then I will consider it to have had paid itself and it won't owe me anything ( comparing it to selling it)

Cash and keep the car ( if it is in a good condition) is all the way for me

pipo

I'm not actually debt-free. I have around £4,700 on a flexi-loan, which I can shave off quite quickly if I were to sell my car now. Then again if I did what you said and put away the car allowance for a rainy day then I can pay off more but might take slightly longer.

The car is in great condition, but it’s now at an age where the likelihood of things going wrong is getting high. Most recently i have changed the cambelt and the radiator on the car so theoretically that puts it in a good shape again.

Swaying more towards keeping my own car, at least for the foreseeable future – unless there someone that can put a case towards the CC.

Thunderbird_2

Hi pipo

Why don't you put £ 150 a month a said and overpay your loan by the £200 left from the monthly allowance? I am saying £150 because you never know when you need the money for a repair or maintainance. Saying this though, if you have replaced the cambelt and radiator, pay all of the allowance towards the loan and hopefully you will be debt free before Christmas.

pHow much are your monthly repayments towards the loan and what is the interest rate, if you don't mind me asking?!

pipo

Thunderbird wrote: »

Hi pipo



pHow much are your monthly repayments towards the loan and what is the interest rate, if you don't mind me asking?!

No, not at all. I'm paying just a little over £130 and it's 12.1% variable. Was thinking of increasing this to £250 once i get my pay increase, which isn't so far away now anyway but possibly more if i can get my mind made up about the car. I guess i'm just crying out to be pushed in the right direction, as number crunching is something i find difficult to do.