| Motoring Discussion > Next Car Ideas - Company vs Own | Miscellaneous |
| Thread Author: rtj70 | Replies: 14 |
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New Sun 2 Jan 11 00:09
Next Car Ideas - Company vs Own - rtj70
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The Alfa thread and now BobbyG's thread on insurance has got me thinking. Do I go for company car again and know exactly what it costs and have some restrictions or do I opt out? Colleagues doing this insist they are better off but I don't think most are. Maybe with increased insurance etc. it depends where you live. Now I will never do enough business miles (I hope) to benefit from tax relief on what the rates allowed are from HMRC. So forget about me getting £2000pa from that route. Assume I do little mileage in that respect. So for simplistic terms, assume I will buy a car for cash at £12000 (no loan) and after tax get £400pm. Over three years how is this better than getting a company car? The figures are not totally real but help me. I might spend more and don't know if I'd get quite £400 or maybe more. Costs per annum: - Insurance - Breakdown - Servicing - Tyres - Hire cars if off the road - etc. Obviously I could opt for a Polo as a company car and be quids in. But I currently get about £40pm back in salary for the Mazda6 which has a list price of about £19000 and is taxed at 25% BIK due to being diesel. I remember getting a Passat 1.8T to be taxed at no more than 20% back in 1999 (or thereabouts as a ball park figure)!! So for ex company car drivers what am I missing here? I could decide to go for a Passat at the moment and be about equal to what I am now take home pay wise. Or pay up and go for say an Audi A5 Sportback and be worse off. But how would I afford that with £400pm and say an initial cash sum of £12-15k? I fear the answer is personal leasing and Ling! :-) |
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New Sun 2 Jan 11 01:30
Next Car Ideas - Company vs Own - Skoda
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Just catching up on tonights threads, I think you've already cracked it in one of the other threads, manchester insurance premiums will put the kibosh on this one I think. You'll get a lot more for your dosh on the company scheme I'd think. You given yourself a stern talking to yet? Been down to the Audi dealers for a sit in an A5 yet? Picked a colour yet? :-) |
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New Sun 2 Jan 11 09:28
Next Car Ideas - Company vs Own - rtj70
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With the current models on offer, I'm tempted by the Audi A4 2.0 TDi Tecknik on cost grounds. You get a higher spec car for less. Or maybe the Passat CC. I've got loads of time to decide but what to get if I go the company route. But I ought to explore my options fully. Even if your own car costs a bit more, you have a car worth something. I wouldn't borrow anything if buying a car but would also not buy one that was too old. But alas I think the insurance costs make this a non-starter. Over 25% of any money I got would go on insurance. I didn't go down this route years ago on insurance costs before - it would have been high due to a claim that went against me. |
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New Sun 2 Jan 11 09:48
Next Car Ideas - Company vs Own - Skoda
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Your satisfaction with your choice for the next couple of years has a £££ value too. A4's a nice car and all, especially with the s-line lights option, but its as dull as they come sat next to an A5! |
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New Sun 2 Jan 11 09:46
Next Car Ideas - Company vs Own - Zero
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Your not comparing apples and apples. On one hand you are talking about buying and running a 12k car, so I assume its second hand and on the other you are talking about taking a brand new 27k Audi on the company. That Audi is going to take 2k a year out of your salary in tax. I always used to knock up a spreadsheet come car choice time. The killer for running your own car is the initial purchase price. If you have the cash spare it makes sense. |
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New Sun 2 Jan 11 09:47
Next Car Ideas - Company vs Own - PeterS
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Quick question; does your £400pm after tax include the impact of the BIK you won't be paying (if that makes sense...) On a £20k car in the 25% bracket taxed at 40% that's £160ish per month in tax that is saved if running your own car, plus the post tax sum from a car allowance. I opted out of a company car a few years ago, but more because our scheme was getting more restrictive than on cost/cash grounds - when I left it cars had to be diesel and have 4 or 5 doors. I've now got an A4 2.0T cabriolet, which doesn't meet any of those criteria :-) One of the big benefits, IMO, of a company car is the complete lack of hassle - problems are always someones elses to sort out - and the predictability of costs. I definitely underestimated these when opting out. Simple things like booking a service or sorting out new tyres means 'phoning round and getting quotes, rather than just leaving it to the lease co. Insurance hasn't actually been a major cost for me, but my car has picked up a few parking scrapes etc that, had it been a company car, would have been fixed immediately because it wouldn't have cost me anything. To sort them on my own car I've got to get quotes, consider the impact on my NCB of getting them fixed, book the car in etc etc. All takes time... Just my thoughts! Peter |
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New Sun 2 Jan 11 10:15
Next Car Ideas - Company vs Own - Runfer D'Hills
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I've done both over the years and while I can prove all manner of savings or gains or losses to myself depending on how I look at it the bottom line is that it doesn't make a great deal of difference provided the deal is structured fairly. I have a company car at present for convenience sake but I probably "enjoy" ownership more if that makes any sense? Can't explain it any better than that. For me anyway it's not strictly about a few quid in either direction. Things I like about ownership include being in charge of deciding when to service, change tyres, change the car to meet emerging domestic circumstances etc. Things I like about company cars include not having to care if they need a repair etc. In my case, my employer wouldn't give two hoots what I chose to drive as long as I continued to get to where I needed to be for work whereas I believe some are astonishingly quite restrictive about even that I believe. |
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New Sun 2 Jan 11 10:17
Next Car Ideas - Company vs Own - -
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Just a thought here, and i admit i know naff all about company car schemes. From previous posts RTJ were you not trying to get yourself into a financial position to flit the country in due course...if i've got that wrong or you confused with someone else i apologise. Assuming car choice isn't too restricted if you opt out and take the cash, wouldn't this be a good opportunity to downsize big time and get something really cheap to buy and run, thereby allowing you to stuff as much lolly as possible into the emigration fund. |
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New Sun 2 Jan 11 10:48
Next Car Ideas - Company vs Own - Zero
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>> Assuming car choice isn't too restricted if you opt out and take the cash, wouldn't >> this be a good opportunity to downsize big time and get something really cheap Specially if, as you say, you dont actually do many company miles. |
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New Sun 2 Jan 11 10:53
Next Car Ideas - Company vs Own - Runfer D'Hills
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| Again, not sure if your employer's "rules" permit it but it might be worth investigating what it would cost to buy the car you already have at the end of its lease. At least you are certain of its history etc. |
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New Sun 2 Jan 11 11:03
Next Car Ideas - Company vs Own - Zero
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| No way would I buy a Mazda Diesel. Remember the diesel in the oil issue he has? |
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New Sun 2 Jan 11 11:08
Next Car Ideas - Company vs Own - Runfer D'Hills
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Wants a Mondeo then... :-) |
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New Sun 2 Jan 11 18:47
Next Car Ideas - Company vs Own - rtj70
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In response to: "Quick question; does your £400pm after tax include the impact of the BIK you won't be paying" Like Z I have a spreadsheet working out the real cost to me with each car vs. cash option. The £400 is around what I'd get if I took the cash and didn't have the car anymore. As you will all know, NI rates change next year. And our company pension scheme has changes so I won't be opted out of 'SERPS' anymore. So I'll be a little worse off anyway. Z, I know I was comparing Apples and Oranges but I don't want to stump up say £20k for a car of my own. But I don't want to drive around in a cheap old car either - although I am happily driving a 3 year old Mazda6 at the moment. As said above, there is £££ price to pay for something I want and will like. I could also trade down in the company scheme and benefit - Polo anyone? But like today I did a trip back to Uni with the youngest and filled the Mazda6 boot and yet he came home on the train??? :-) And GB you're right we are hoping to save to leave Blightey if we decide. So again trading down might save a bit. But as soon as I suggest a Skoda Octavia 2.0 TDi I will be told she doesn't like it. But saving £100pm on a car to then be taxed on it seems a bad deal to me. Although I do get back about £40pm before tax for the Mazda6. Another reason why the company scheme seems to me to be good is if we choose a car emitting less than 160g/km of CO2 we get it cheaper by two car grades! I am pretty sure I'll stay in the scheme and go for something semi sensible. One reason for the post was to get an opinion - some colleagues claim they are much better off opting out. I cannot see where this money comes from. The only two areas I can see them making more money from it: - Lower car insurance - Claiming back TAX for business miles at around £2000pa. But some years I have managed to do my bit for the environment and do less than 3000 business miles a year. |
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New Sun 2 Jan 11 22:08
Next Car Ideas - Company vs Own - Bill Payer
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>> One reason for the post was to get an opinion - some colleagues claim they >> are much better off opting out. I cannot see where this money comes from. In my last biggish company a lot of people opted out and then PCP'd exactly the same sort of car they could have had as a company car. Pretty well the sole reason for this was so that they could add options such as bling wheels - they certainly weren't better off and even at the basic level our allowance was £650/mth. Some of the higher level guys on £750/mth did take much cheaper cars (Peugeot 307 diesel was a popular choice) and they did make money out of it. As PeterS alluded, don't underestimate the lack of hassle / peace of mind of having a company car. Not just the unexpected costs, but I *hate* having to leave my own car in dodgy car parks etc, whereas I never gave it a second thought when it wasn't mine. |
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New Sun 2 Jan 11 22:45
Next Car Ideas - Company vs Own - rtj70
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Bill Payer - I know how hassle free the company car is so taking the money would have to be beneficial. Real examples: - Car stolen (company) so borrowed VWs and Audis for 3 months from fleet - Accident - hire car was outside house within 2 hours of asking - Car in garage and (cough) large item in garage needing to be taken to tip... request estate hire car ;-) I think most colleagues are not making money like they say. On our scheme if I opt out I think I'd get about £6300pa pre tax and NI. Hassle factor is high up on my list. I could get a top end Superb and save money... but I won't get that. And if I want bling wheels or other options I can have anything... just might have to pay more. Plan C is to see what the new Jetta is like later this year. About the right size but the Jetta/Vento/Bora/Jetta-again cars have been ugly. New one might be okay in the higher end trim levels. Maybe one for another thread - how does an A5 Sportback with less equipment cost a lot more to buy than a better equipped A4. Apart from they can just charge more anyhow! Last edited by: rtj70 on Sun 2 Jan 11 at 22:46
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