I’m starting a new job in mid July & have the option of a company car or £7750 car allowance.
I’ve asked for the company car list which is grade D from Zenith but I’ve not had sight of it yet.

If its crap how would you spend the car allowance? I’m 50 & currently in a 2015 Golf GTD 5 door which is great.

I think how you spend it entirely depends on your requirements.

Are you planning on buying new, secondhand or leasing?

I buy secondhand, 18 months to two years old. Keep for two or three years.

Take both, see if they notice.

comcar has a calculator for the financials.

Some of it comes down to how much your insurance would be and how much you’re willing to economise on company car (co2/BIK). Also how strict the requirements are around car allowance – many impose age limits and “sensible” choices of car, some do things like maximum CO2 limits too. Plus there’s generally a very low hassle experience with a company car – if you need tyres, or a service, or someone scrapes in a hotel carpark, it just gets sorted out for you.

If its crap how would you spend the car allowance? I’m 50 & currently in a 2015 Golf GTD 5 door which is great.

Take the allowance, keep the car you’ve got, profit.

Company car every time.

Hassle free.

Take the allowance, keep the car you’ve got, profit

Which is pretty much what I’ve done. I didn’t change my car owning ways when I got an allowance.

I take the allowance and buy something used, cheap and reliable every 5 years or so with cash. Puts about £10k in the bank. Done the expensive lease thing, in the end its just a car that gets me to work.

Take the money!!!
Buy wisely (if you want to buy a car) and you’ll likely be better off, especially if they issue fuel cards.
Check the car policy though, some companies insist you have a car which is 3 yrs or newer which could mess you up a bit.

Bear in mind you’ll get taxed on the allowance, but if you do lots of business miles, then the first 10k are at 45p per mile, so that helps to offset the tax element. I went allowance and bought brand new, but I now own it outright, so my allowance is just extra wage really. If I did it again I’d still go for the allowance, but I’d buy a year old car.

It depends on whether you’d use the allowance for a lease or purchase, what requirements your company stipulate on the type / class / age of car etc etc.

Untimately, an allowance means you’re able to buy a car and therefore have some residual value. Even more residual value if you’re allowed to buy a used vehicle.

I have a company vehicle because I have no choice. My wife has an allowance. I’d personally prefer an allowance.

That’s a pretty hefty allowance so unless the Company Car is really special (which will likely also cost a lot in tax) then you’re likely to be better off buying/leasing/PCP/keeping what you have.

Thats a good allowance..I get 5k a year or a car, took the cash. I’d love a brand new motor, never had one, but only if its a car i’d actually want to have.

My choice involved a plethora of boring hatchbacks, best on offer was a 1.6l audi a3, unless I wanted to chip in myself. Instead I kept my car and spent the allowance on a 2nd hand boxter. had it for 3 years, after 4 i’ll have pretty much had enough from the alowance to pay for the boxter and its still worth what I paid for it (albeit I’ve spent a small fortune in maintance costs)

So unless you can get anything near as nice as your current motor I’d say take the cash

I do take both – kind of. Our scheme lets you downgrade the car and take the difference as cash. My downgrade payment covers a big chunk of the BIK and through the vagaries of our car scheme I was able to get exactly the same car just without full leather and sat nav.

Thats a good allowance..I get 5k a year or a car, took the cash.

It’s nearly double what mine is. I love having a company car simply because it’s hassle-free motoring, if the engine falls out tomorrow who cares. But my hand is being forced, I don’t do sufficient business miles to qualify any more so I’m being moved to an allowance when my current lease runs out. We’re supposed to be “better off” on the allowance scheme but I really won’t be.

I don’t know what will be on your company car list but if you want to run a new prestige marque in the 30-45k region then the company car option is a no brainer. If you are happy running something either new or second hand in the 10-20k region then I guess allowance is the way to go.

BIK tax on company vehicles is going through the roof, especially on diesel cars, so make sure you check the future projections and choose wisely.

Oh, and someone above mentioned that if you have a car allowance you get 45p per mile for the first 10k – you don’t. If your employer pays you 15p per mile, then you can reclaim from HMRC the tax on the difference between 15p and 45p.

As whytesky says, check your company car policy for restrictions. Ours stipulated a max of 5 years old, which caused issues to those looking at bangernomics.

It’s also worth saying that you can probably opt IN at any time, but once you do opt in, you’ll be committed to the length of the lease. So if you already have a nice car which fits your policy requirements, just take the money. If you decide you want a change, or if it’s not working out…. you can always take a car.

Get a Co Car. A VW Passat GTE will do it.

See how little tax you pay…

^ this year, then scroll forward and see how much tax you pay in 2 years.

wallop – I’m able to charge my company 45p per mile for first 10K miles and then 25p per mile thereafter.

Got to be hybrid car f some sort if you go the company car route

Charge your company? Unless you’re self-employed surely you’re just claiming as per their expense policy? The company I work for only pays 40p a mile so as Wallop says we can claim back tax on the difference to the HMRC’s max allowance of 45p a mile (not sure anyone does, sounds a lot of hassle to me…).

How secure is the new company?

If it goes pop in the next few years, company car just goes back. If you’ve bought one on HP, you’re responsible for it…

wallop – I’m able to charge my company 45p per mile for first 10K miles and then 25p per mile thereafter.

Lucky you. That applies to very few people who take a car allowance. The rest of us claim the tax on the difference.

The real question is what you’re going to do with the car, you going to be lugging around a load of stuff in it or doing loads of miles then a company car might be a better bet.

this year, then scroll forward and see how much tax you pay in 2 years.

It’ll be more, but will still be less than even basic rate tax. Plus you’d have had 3 years of fuss free motoring and can decide at that point which way to go.

With that allowance I would be looking at something like the new BMW 5 Series hybrid
http://www.autoexpress.co.uk/bmw/5-series/99297/new-bmw-530e-iperformance-hybrid-2017-review

141 MPG and very low tax.

Sadly I have not had a company car for nearly 10 years so my 56 plate 3 series will have to soldier on for a couple more years.

I get the same allowance as it happens – never been able to work out why anyone would do anything but take the cash?

When I looked at things, it didn’t seem to save you any money at all to take the company car – better off just taking it as additional salary. Am I missing a tax advantage here?

(My company doesn’t place any conditions on my own car – 10 year old mondeo that costs about 300 quid a year to run)

I get the same allowance as it happens – never been able to work out why anyone would do anything but take the cash?

If your job involves a lot of driving around crappy places, carrying kit etc then not using your own car and depreciating it massively would be one reason. If all you are doing is going to and from offices etc then yeah no brainer.

I’ve had an allowance for the past 12 years. Saw the company car scheme and it always looked expensive. The no-hassle, anyone-can-drive parts of the deal were attractive. But the price! Though there was no limit on what car you could choose beyond your allowance – anything up to your entire salary it seemed.

It seemed cheaper to get my own car and use the remaining cash for tax-efficient pension additions.

If your job involves a lot of driving around crappy places, carrying kit etc then not using your own car and depreciating it massively would be one reason. If all you are doing is going to and from offices etc then yeah no brainer.

Ah yes, see your point – wasn’t looking at it from that point of view. I only drive 20 miles / 50 miles each way depending on the day of the week – I don’t think my car has any more depreciation to do given the dents i’ve put in it! 😆

The one thing that would make me change my mind is when self driving cars you can snooze in arrive – then i’ll be all over it like a rash!

Car allowance, don’t waste your money.

BIK tax on company vehicles is going through the roof, especially on diesel cars, so make sure you check the future projections and choose wisely.

This is true – I have a company car at the mo (Octavia vRS) and it’s getting pretty pricey in tax. The downside is that out allowances are poor and the car list is better – I’d struggle to but or lease my car for the money I’m given as an option. This may change though as BIK tax increases.

The big plus for me is that my car is totally hassle free – I don’t worry about servicing, tyres etc. I pay a £10 a month damage waiver which means that I’m not liable for any damage and don’t need to pay an excess on accidents etc.

I do about 20k per year, the downside is that most of that is commuting / personal mileage which makes leasing very expensive. I chap I work with does loads of business miles and gets a lot of mileage relief back which tops up his allowance and contributes to him driving a nicer car.

I am getting more tempted to opt out and take the cash when my current car goes back.

For the OP’s allowance, I’d be taking the cash especially if there are no strings attached re age of car, CO2 etc.

What will be the result of a break down ?

Will it mean you need a lift to the office off someone or will it mean you can’t make it to your days sales appointments.

If the former . Take allowance. If the latter take the company car.

It’ll be their issue to sort you an alternative car quickly as oppose to it being yours if you take the allowance.

Sorry I should have clarified a few things;
Current Golf is a company car that goes back on 12th July.

New job: Car or car allowance – car allowance conditions: car must have four seats, and age must not exceed 84 months or 150,000 in the year.

and age must not exceed 84 months or 150,000 in the year.

I would love to see any business enforce a mileage cap like that!