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AntW

Company car vs. car allowance

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I am possibly changing roles at work and part of this will mean a bit of travel. The role comes with a company car so I have a choice to make regarding company car vs car allowance.

I own my own car outright, so if I opted for allowance I would continue to pay for servicing, tyres, insurance etc.

The thing is I do <6000 miles a year in my own car at the moment, so if that continued and I did an equal amount of business miles (unlikely)

My car is a A3 2.0tdi, not sure what company car I would get yet.

So my question is, as a low mileage private driver with a fully paid off car, is it likely I will be better off with the allowance? (not sure what it is yet but £3k has been mentioned)

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A few questions need to be answered before we can answer that:

What will your mileage be in the new role?

What will the new car be?

Do you/will you pay 40% tax?

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cheers booster, I didn't know what questions to ask/answer :)

* I think the business mileage will be 6000-8000 a years tops, possibly less.

* company car would likely be a Megane Expression dCi 110 ECO or equivalent, will look at car list tomorrow when I find out more.

* nope, 20% tax bracket

I will hopefully find out a lot more over the next few days.

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I bailed out of our scheme 9 years ago to take an allowance due to the low mileage I do (6k/year).

Booster's points are very relevant and is the size of the cash allowance.

Also is the cash allowance equivalent to the car allowance? Some companies allow say £400/month for a car however if you take the cash, only give you £300.

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cheers Milo :)

as I said, this isn't unexpected, just happening faster than I thought it was going to. Its more a case of finding out what questions I need to be asking, what info I need to find etc.

I had a quick look on the web and it seems to be that low private mileage means an allowance makes more sense, also since I am unlikely to change my car (unless something happens to it), I would benefit there?

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I finished paying for my car 2 years ago but still get the car allowance which I throw into the mortgage overpayment fund.

If you're keeping your car and it's been trouble-free (and better still, paid for), I would grab the cash allowance if you're doing low miles (private & business combined). A simple spreadsheet will show the pros and cons.

In 2002 I found for what I was paying for a rep mobile type car in tax, I could run a brand new Audi A4 (not poverty spec either :P) with my car allowance, hence I jumped ship.

I only do around 6k-7k miles a year in total, the vast majority of those being business and expensed.....

Now the car is paid for, my annual runnning costs are insurance (£350), tax (£230) and servicing (average £150). Tyres last me around 2.5-3 years!

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In 2002 I found for what I was paying for a rep mobile type car in tax, I could run a brand new Audi A4 (not poverty spec either :P) with my car allowance, hence I jumped ship.

So you chose not to have a company repmobile, and instead, bought the very epitome of repmobiles with your own money? Odd! :P

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You will also need to check if your employer puts restrictions on the age of the car you can have if you choose to keep your own vehicle. Some do.

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I opted out of our car scheme five years ago and I don't have any regrets. I now get a flat cash allowance which now contributes towards my new car. Even though I had a company car for nearly ten years, complete with a fuel card, when you lose your job and then have to get your own car again it sort of puts things in perspective. I think in the IT sector where I work at the moment most companies will offer a cash allowance and at my present company the only proviso is that the car must have four seats, (therefore can be a 2 door). My company also said that the car should be less than 5 years old but looking at other cars in the car park I think that rule has been relaxed over the years. I don't think I could ever go back to having a company car, the tax is the real killer and I like the freedom to be able to choose and drive whatever I want.

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So you chose not to have a company repmobile, and instead, bought the very epitome of repmobiles with your own money? Odd! :P

Nope, I got rid of a shitty Mondeo Zetec that was forever in the garage and had bits of trim falling off from day 1 and picked up an A4 1.9 tdi that was solidly built and never missed a beat in 3 years and retained 62% of its purchase price :P

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Company car tax isn't too bad TBH.

I'm awaiting delivery of a 318d Touring Sport Plus Edition and it'll cost me about £50 per month in tax.

Depends on your company and their car list though.

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Nope, I got rid of a shitty Mondeo Zetec that was forever in the garage and had bits of trim falling off from day 1 and picked up an A4 1.9 tdi that was solidly built and never missed a beat in 3 years and retained 62% of its purchase price :P

Ouch, a tdi too, blimey, didn't you go wild, bet that stood out amongst the company repmobiles in the car park! :P

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I'm just messing with you, cos you said you opted out of a company repmobile, then bought the most common repmobile available!

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I opted out of our car scheme five years ago and I don't have any regrets. I now get a flat cash allowance which now contributes towards my new car. Even though I had a company car for nearly ten years, complete with a fuel card, when you lose your job and then have to get your own car again it sort of puts things in perspective. I think in the IT sector where I work at the moment most companies will offer a cash allowance and at my present company the only proviso is that the car must have four seats, (therefore can be a 2 door). My company also said that the car should be less than 5 years old but looking at other cars in the car park I think that rule has been relaxed over the years. I don't think I could ever go back to having a company car, the tax is the real killer and I like the freedom to be able to choose and drive whatever I want.

What he said!+++

Always pay for my cars outright from the beginning, so makes life easier. I get a nice allowance and a fuel card which suits me fine, also a bonus as I see it. Most of my business mileage is to and from my work place. (Can only do this as I'm site based. If you have a permanent place of work, this cannot apply). Every year end, because the company I work for are idiots with my P11D, have to claim mileage back with form P87 from the tax office.

I suppose it depends on mileage as well. Like Phantom said. I can drive what I want really. If I went down the finance route, maybe something even bigger but you have to do the research and see what suits you best. The way I've always seen it is, if I was out of a job tomorrow, I wouldn't have to go out and face the hassle of getting my own car

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Nope, I got rid of a shitty Mondeo Zetec that was forever in the garage and had bits of trim falling off from day 1 and picked up an A4 1.9 tdi that was solidly built and never missed a beat in 3 years and retained 62% of its purchase price :P

The Atlas grey saloon? Gorgeous car, iirc you would have kept that for longer had the B7 not just come out.

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If you take the money and pay upfront for the car and you are wise in your choice (ie. get low depreciating car) then you can make it work out for you. Esp. if your getting enough each yr with a decent dealer to just keep turning the cars over.

But if you end up with finance agreement etc etc. then you need to becareful with the "real" cost.

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I opted in.

Then I fancied something different so opted out.

Then I started doing more miles, so I opted back in but kept the private car too.

Then I opted back out.

Then I left.

Now my car is my car but the company have a habit of paying for things on it.:roflmao:

Go figure.:roflmao:

Opt out Ant. At that mileage I don't think kt makes sense, plus I wouldn't underestimate how much of a comedown the Megane will be. MrsMe had a Megane many many years ago and we'd never go near a Renault showroom again, never mind want to drive one every day. Times move on and things change, I know, but it never felt like a 'safe' car and developed more rattles than even my Jaguar managed. That's quite bad.

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Apologies if this is your understanding too Geoff, but Ant would be keeping and running the A3 on the allowance. +++

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