[Closed] Company car v allowance

Wouldnt know, im a civil servant not on the private company gravy train. 🙂

I've just gone back to a company car after 6 years on an allowance and it's a breath of fresh air tbh. The nett effect of the cost was a slight increase monthly, but a low emission diesel meant reasonable tax. More important was the lack of hassle and unexpected cost.

Get a puncture; go to Kwik-Fit, give lease account number, move on. Broken windscreen? You get the idea...

Work for the public sector as well so wouldn't know!! 😉

Do you do much business mileage?
If you do you can claim the tax back on the difference between whatever your company pays you per mile and the maximum inland revenue limit

Made quite a difference to the equation when I opted out

Would you actually get paid 40p a mile business use? That is loads! I get 15p!

No, I get 15p a mile from my company then claim back tax on the 25p difference between that and the 40p inland revenue maximum (think they've increased it recently actually)

I was gonna say!

You've thought it all through (but don't forget to factor in tyres). I think it all boils down to:

a) how much your cash allowance is
b) what value you put on the convenience and financial stability of having a company car
c) which company car you choose
d) whether you pay 20% or 40% tax. If you are a higher rate taxpayer then the cost of a company car is effectively doubled.

I leased a Honda Accord for £438 a month when getting an allowance. I worked out that the real cost of the car over the three years was 33p a mile, all in, including everything. That was a total mileage of about 27k per year.

Lower mileage would up that figure, so I would say it's marginal, especially as cars have gone up significantly since then.

Right, can I ask another one then since the experts are in..?

I've already got two cars, one on finance and one not. I might soon start a job that has a car allowance that you can take as cash. Seems a no brainer to take the cash, but is it really? Would probably be a fair amount of business miles per year but there's also the possibility of using the train too.

Well, if you took the company car you'd have to sell one of the cars - presumably the one you own outright, whereas if you took the allowance it could cover the cost of finance on the other one.

Another thing to bear in mind is that some companies offering a cash allowance impose certain restrictions on your car. For example, at the last place I worked the car had to have a minimum of four seats and be a maximum of four years old.

Make sure you read your small print!

A mate of mine who works there drives a battered old Octavia VRs that's 52 plate I think.

Depends - would you be happy putting the business miles on your own car?
How convenient is the train? I have the option of using trains but rarely do as it's just not the easy option.

My opt out was based on a lifestyle need for a car I couldn't get through my company car scheme, probaly couldn't gave justified it on economics alone

If only someone did a website where you put in all the details and it tells you what's better! http://cashorcar.com/

Generally these days you'll do better on car allowance unless you do lots of business miles especially if you pick a low CO2 car.

A mate of mine who works there drives a battered old Octavia VRs that's 52 plate I think.

Job's a good'un then.

Hmrc milage rate is 45p / mile from April 6th 2011. If your company doesn't pay that you can claim the difference back from the revenue.

No, you can't claim the difference, you claim the tax on the difference.

If you leave the company, or are sent packing, if the car is yours you find yourself servicing the financing but you still have a car (for as long as you can afford the finance). If it's a company car, you walk away with no car BUT no outlay either (though obviously you may need to find a car for your next job).

I am office based so no car allowance for me but as others have said our T&Cs state 4 seater and no more than 3 years old.

The 45p tax rate is only for the first 10,000 miles; 25p after that.

I opted out a good few years ago. It's the best thing I ever did.

I get 45p per mile and do over 30,000 miles a year. That's (mostly) free from tax too. On top of that is the cash allowance every month which is taxed, but is nice dollop extra.

I've run flash cars but now run a 3 year old mpv and pocket the difference. If you are going to run the same car as the Co. can give you you might as well let them take the risk. If you want to run something different opting out is the way to go.

depends on the cash, the car you can get new, the milage you'll do, etc etc.

generally, if you're going to do high miles, a cc is a good idea, as you don't need to worry about depreciation (scott's a bit of an unusual case with 45p even on high miles)

also worth remembering that your cash alternative is taxed. We get £300 pcm as a cash alternative, but due to the tax its essentially only £160. Which frankly, you can't run hardly anything on. Sadly, the free cars we can get (without buyup) are naff as well - about the best thing is a 1.2 corsa, which would then cost £80/month or so in company car tax - overall £240 for a corsa I'd have to keep for 4 years. No thanks.

I do actually get 40p a mile.Business mileage is small though because I work in London and generally commute by train so normally no more than 300 miles a month.

I`m a 40% tax payer.Company car would be an Insignia CDTi though I can trade down to an Astra if I want to lower the tax bill.

You haven't costed in one major expense: your own time spent on the phone sorting out insurance quotes, the trips to the PO for tax discs, the general admin and paying of bills and accounts as well as all the hassle in sorting out accidents or insurance claims. How much is that time worth to you? Let some other sorry barsteward do it, he's paid to do that job; you get out and ride your bike.

...trips to the PO for tax discs...

Are you living in the 50's? It's all online these days.

If you want to go it alone, then you can easily sort all the paperwork out in an evening, once a year. If you need to need to sort an insurance claim; do it, take the time out form the office to sort it. You can let a fleet manager hold your hand for you, or you can stand on your own feet.

I'm a grown-up, I can manage.

Another consideration is how much private mileage you do and how long your commute is.

I have a company car and I use it all the time for private use, in fact I have sold my own car. My commute is 50 miles each way, I did have my own car until four years ago, fuel alone was £80.00 per week, remember you cant claim the commute only the business miles (not sure if this is the same for all though). Also, in my company car scheme I get a new car every 2yrs. The car has to be a Peugeot or Citroen but no restriction on value.

So, for me..
I pocketed the money I got on selling my own car.
I use the car for all my private journeys including two alps trips per year + French family hols.
I know what expenditure I have each month.

For me the Scheme turned out to be a good move.

[i] our T&Cs state 4 seater and no more than 3 years old[/i]

Is that 3 years when purchased, or never older than 3 years?

If the second, seems rather odd, especially as most company cars are run older than that.

And is that the one you 'drive', or the one you 'own' - does anyone check?