Company Car - advice please.

[trainer]

Hi all,

I have started a new job recently that involves a lot of driving between our offices in Warrington, Stoke and Birmingham. No work just driving between offices.

I have my lovely C32 which I can get the 40p a mile for but as I think I will rack up 12-15000 a year easily I am thinking of taking the company car and using the C32 at weekends. Or letting Mrs Trainer drive it to work - I will be so jealous.

I have been told that I have a budget of £18,000 for the company vehicle. I know we can secure a deal on some vehicles at a higher book value and get them for the £18k. I am test driving an Alfa Mito and a delivery mileage 157 saloon today. The Mito I could get with all extras for the budget the 157 has a good spec but obviously it comes as it is.

I have had a look at an online tax calculator which throws up some figures but I am still new to this. The joke is within a few months I will probably be dealing with the company fleet as part of my role.

So, what advice can you give me on choice of vehicle for the budget. Tax implications, comfort etc.

I look forward to your replies.

Clive

 

[wemorgan]

When I was in a similar situation money was the key factor. It all depends how much you're happy to pay for the luxury of driving a new car with fully paid maintenance?

I ended up taking the monthly cash equivalent. Even after tax I had a nice amount to pay for the running costs of my old car.

Now I'm self employed and simply take the 40ppm. For the business miles I do (<10k) it's a no-brainer IMHO.

There's no right or wrong answer, just differing opinions

If you give us a few figures with the deals you've seen so far I'm sure we'll help you spend your money 'wisely'

 

[stevesey]

Having a company car will mean you get clobbered for the tax - yet if you are keeping the C32 you won't really see the benefit of a free car for personal use (unless you suddenly need a 2nd car for Mrs Trainer).

I'd be tempted to buy something like a 6 year old C220CDI for clocking up the business miles in - this should pretty much pay for itself (and no tax penalty). Also would you be paid an annual allowance on top of the 40p a mile for opting out of the car company scheme - this would further tip the balance.

 

[corned]

My accountant's mantra on this is that only very small diesel cars with a low new list price (i.e. small Skoda TDi sort of thing) actually stack up financially in the company car arena.

Anything else is a personal choice which will cost you - depending on what you really want, and how much you are prepared to pay for it.

Then there are other options, such as taking a cash equivalent from your employer (if they will do that for you) and going the personal lease route.

 

[Rory]

Having a company car will mean you get clobbered for the tax -

Be careful there - I know someone with a company car who pays £7 per week tax. Beat that - fully expensed (apart from private fuel) brand new car, for £7 per week. Her insurance would be near enough that on its own.

It depends on the list price of the car, its CO2 rating and your personal tax rate. So drive a low cost, low emissions car and for people paying tax at 20% it's an amazing deal.

This calculator shows the cost of running specific company cars and indicates how much money you'd have to play with if you took the cash: http://www.cashorcar.co.uk

 

[JonMad]

My accountant's mantra on this is that only very small diesel cars with a low new list price (i.e. small Skoda TDi sort of thing) actually stack up financially in the company car arena.

Would go along with that. Certainly, anything with highish CO2 it's cheaper to buy and run than get as a company car. I am looking at a small diesel to replace my E90 320d when I have to give that back next month. It'd need to be something quite economical for any second car, whether company lease, private lease or bought, to offset the additional running costs of keeping the one fun car and doing the extra mileage in that. The tax you get back from company miles in your own car is another benefit.

I looked at just running my CLK as my only car but getting something on the company means hassle free, fixed price motoring (allowing you to take time to get any work done on the Merc) and with an economical, low CO2 diesel the fuel savings alone pay for it, even if I still drive the Merc 1 or 2 days per week.

My short list (whittled down from about 150 options I looked at) is Fiesta TDCi, Seat Ibiza Ecomotive or, for a bit more, a Citroen C3 Picasso TDi, as it's a bit different.

 

[scumbag]

Would you want a small hatchback for long motorway drives, when you have a C32 at home for weekends?

If you are going to spend a long time in the car, driving along boring motorways, or stuck in traffic, you don't need a car that is either dynamic for country lanes, or geared for town.

And IMHO a manual would drive me up the wall sat in traffic. not that you would be sat in any traffic between warrington and Birmingham.

You want something with nice comfy seats, decent sound proofing and a nice ride. I doubt the Mito (or punto with bodywork) would be soothing on longish drives up boring motorways.

Find a range of cars that suit that, then reverse engineer the costs into the equation to decide on the car you can get.

If you are going to sit in it for a long time, it needs to be right.

If it was just for the odd blast around the lanes, and a number of shopping trips round town, it would be a different story.

Then again, I have gone totally against my own advice.

 

[JonMad]

You want something with nice comfy seats, decent sound proofing and a nice ride.

Not wanting to sound like I'm bigging them up too much but this is where the C3 Picasso I tried scored very highly. I was frankly amazed. And you can get one with rear passenger fold down trays like in an S class (kinda!) Ultimately though, there are other cars that will do a decent job of long distance drives that are cheaper. Your lease company may be different of course

 

[J400uk]

Can I be the first to suggest a new Mercedes of some sort? A180/ B180 CDI? Can't think why you would choose a Citroen over a Merc...

 

[Dieselman]

Can I be the first to suggest a new Mercedes of some sort? A180/ B180 CDI? Can't think why you would choose a Citroen over a Merc...

Why not, they are good cars.

 

[Dieselman]

My accountant's mantra on this is that only very small diesel cars with a low new list price (i.e. small Skoda TDi sort of thing) actually stack up financially in the company car arena.

Anything else is a personal choice which will cost you - depending on what you really want, and how much you are prepared to pay for it.

Not so, a number of my staff run their own cars profitably. My own car ran at a loss initially but has run at profit for years and we don't pay very high remuneration for own car use.

The O/p's car isn't new so will probably run at profit, but irrespective, even if it doesn't he will have costs to keep it as a private car which need to be worked into the equation.
10-12k per annum is nothing for company use, I'd go with just running the C32 and change it for soemthing a bit more economical, but tasty, when the time comes.

 

[timskemp]

Company cars: There's a few that make sense, basically either the ones that cost next to nothing in tax, or the ones you could never afford to run yourself, or anything you can register as a commercial. Other than that they're a bit of a burden.

I'd be looking at the the Prius. Interesting, quiet, automatic, and very low tax (10% I think), £18370. The business has an incentive for buying a low emission vehicle too (not sure how it works) so you may be able to pursuade a better spec unit from them.

 

[Dryce]

I'd be looking at the the Prius.Interesting, quiet, automatic, and very low tax (10% I think), £18370. T

Prius: Quiet yes.

Prius: Difficult to see out of: yes. Boot space: rubbish. Internal space: rubbish for a £18K four seater. Performance: not great. Economy - overstated. To live with: awful.

 

[HR17]

Take the allowance and save it up for a rainy day for when you want to change the C32 for something else. It will also pay for the C32s expenses easily. As far as I know, the 40p/mile only last for the first 10000 miles in each tax year. After that, it goes down to 25p/mile.

I bought and run an 03 E220CDi on the above, and it works out very nicely, with spare cash to do with as I wish, tax free. The only bad side is havign to pay the bills yourself, and of course arrange your own tyres, servicing, repairs etc.

 

[wemorgan]

Using HMRC maximum allowances of 40ppm for 10k miles then 25ppm thereafter:

12k miles = £4500
15k miles = £5250

If fuel in the C32 costs 15ppm (?), then your fuel costs will be

12k miles = £1800
15k miles = £2250

How old is your C32 and what depreciation would you expect with the above mileage?

Generally there looks to be sufficient margin to run a second-hand C32. I presume you still like the car, so I'd continue to use it.

 

[DSLiverpool]

Hi OP
I have just bought 2 mini cooper Diesels for two of my managers, they pay £38 a month tax for having the car BUT if it was moi I would take the money and get a 220 E class best you can afford and pref with a tv

You have some horrible roads there and I know all too well you can take 3 hours to do 100 miles.

A Mini / MiTo will do your head in after a long day that you want to drive home in trance mode, a nice E will lull you home serenly

 

[timskemp]

Prius: Quiet yes.

Prius: Difficult to see out of: yes. Boot space: rubbish. Internal space: rubbish for a £18K four seater. Performance: not great. Economy - overstated. To live with: awful.

Are you talking about the older or the current prius? The current one is much nicer than the old ones, and when compared with Focus / Astra type mainstream stuff has more passenger space and toys.

Rear visibility does suck though, but all but the base spec have a reversing camera (and auto-park)

 

[wemorgan]

Has anyone tried the Civic Hybrid yet?
£18k for the ES model.

10% company tax: £28/month for 22% tax payers, £56/month for 40% tax payers.

 

[trainer]

Thanks for the advice so far. I have driven the Mito and the 159 today and like them both. The 159 was the 1.9 turbodiesel and was a nicer drive and felt better overall. I also got to stand next to an 8C Competizione and listen to it being revved - what an engine and what a sexy car!

If a cash alternative is an option I might look at an older Merc diesel either C or E and some other models.

The C32 is staying. It is too good to let go and is finance free so I don't mind it sitting around mid week. I got it for a very good price so I am not worried about the depreciation.

Our Birmingham office is actually at Fort Dunlop so I can use the M6 toll and then the A38, therefore not too bad in terms of sitting traffic even leaving at 5pm.

I used to drive to Leeds and back everyday from Stoke in a Toyota Corolla and that was comfortable enough. However that was in the pre Mercedes days so I am not sure I could go that basic again.

I need to ask my line manager so more questions in terms of cash alternative before I can answer your questions.

Clive

 

[J400uk]

Has anyone tried the Civic Hybrid yet?
£18k for the ES model.

10% company tax: £28/month for 22% tax payers, £56/month for 40% tax payers.

Had a ride in one of those the other day, seemed like a decent well built car, but I got the feeling they are a bit underpowered as it seemed to really struggle up hills.