Car allowance

Fireflyaway · 18 June 2018 at 1:54PM

I've been offered a job interview and the position has a car allowance. I have no clue about car allowances!
Do allowances include fuel usage of do you still claim mileage? What is a reasonable car allowance?
Of course I can ask more at interview but thought some prior knowledge would help me understand if the deal is good or not.

sangie595 · 18 June 2018 at 2:35PM

What they offer is entirely up to the employer. There is no legal obligation to offer anything. So nobody could tell you.

Schoolworker · 18 June 2018 at 2:57PM

My husband has car allowance which is added in his wages and detailed on the wage slip. This is money you get extra over and above tour normal wage for using and maintenance of your car. Hi now gets I think £480 per month to cover buying your car, repairs and business insurance. Remember to tell your insurance company that you are using your car for business use. All amounts are different for different companies bit means it's your car and no need to give back unlike a company car

DD265 · 18 June 2018 at 3:20PM

At my company the allowance is probably a percentage of your salary or tiered, I'm not certain which. We can claim mileage at 20ppm. The company may look to put a limit on the age of your vehicle - this was a problem for me and I worked out that taking the car allowance would actually cost me money (as I would've had to get a car on finance, and due to high mileage that's a steep monthly cost) - so that's worth bearing in mind.

StevenB12 · 18 June 2018 at 4:05PM

It varies from company to company as to what the "allowance" is.

At my previous company the managers were allowed a "sensible, 4 door car" that had good mileage etc. Could be any car they wanted that matched that, as long as they paid the tax and insurance. Few would be provided etc. Of course the cars were on a lease/hire agreement, new car every 3 years etc, so the company never bought the car, they just paid for the monthly hire and the fuel.

Fireflyaway · 18 June 2018 at 4:44PM

Thanks. Part of the reason is I had an offer of a job today that pays just over 3k more than the job I'm interviewing for but is a 45 mile round trip every day. Using a calculator I think it's about £120 a month in petrol. The other job is home based so no commuting and has this car allowance so might actually work out the same take home pay.

System · 19 June 2018 at 9:04AM

It's been 45p for the last 20 years...I think you should be asking for that minimum. Think about:

MOT - £45 assuming nothing is wrong
Insurance - say £350 a year
Tax - say £120 a year

Before you fuel you are looking at around £50 per month to keep a car on the road.

Then service - say £150 a year
Tires - Say £500 every two years

Repairs - budget £300 a year

Now it's nearly £100 a month. So £3 per day at the very least BEFORE fuel.

How much driving will you be expected to do? Because if it's lots, you'll probably need to factor in depreciation as well.

Fireflyaway · 19 June 2018 at 9:23AM

At this stage Im unsure how much driving or how far. The ad was not that specific so I will need to ask at interview. I also have a feeling that the first job is permitted parking which is around £4 a day on top of my petrol calculation I think. If the second job offers a car allowance of £1900 a year or greater then it will work out more than the first job.

crackerberry · 19 June 2018 at 7:29PM

Car allowances I've received from various employers over the years have ranged between £400 and £600 per month.

Employers paid mileage anywhere from 13p to 18p per mile (depending on the year ie 13p was back in the early 2000s and engine size, with some allowing an extra few pence per mile for any trips where I had a passenger) . Having a gas guzzler this didn't cover my actual fuel costs but easily would have done had I had something more economical.

One employer paid a (measly) £175 per month car allowance BUT paid 40p per mile instead. I wasn't too happy at that low allowance at the time but did actually grow to prefer it as overall it did work out to be financially better overall with the allowance being taxable but the pence per mile rate being tax free. There was no need either to have to claim tax relief on mileage.
Speaking of mileage, if paid under 45p per mile you can claim tax relief on the difference between what you do get and the HMRC rate of 45p ie if you drive 10000 miles in a year and get say 20p per mile from your employer the difference would be £2500 (10000 x 20p=£2000. 10000x 45p=£4500. Difference = £2500) and you'd get 20% of that back, so £500 (or more if a higher rate tax payer)

You need to factor in the cost to run your car- loan /lease costs if needed to purchase a car, depreciation taking extra mileage into account, road tax, insurance (business use), roadside assistance cover, MOT/servicing etc and also are you covered on any of your policies for a replacement vehicle should yours be off the road for a lengthy amount of time?

The car allowance usually isn't pensionable either so perhaps something to factor in when comparing the two jobs.

Fireflyaway · 19 June 2018 at 7:46PM

Thanks. My car seems quite economical so far. Only had it a few months.
So the norm seems to be a monthly allowance plus a set sum per mile. Sounds more attractive than commuting at my expense and paying for parking on top. In job 1 I'd be travelling over 200 miles a week just getting to the office and back. I don't think job 2 expects travel every day so overall less actual driving and not the same boring route all the time either.

Car allowance

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