Company car dilemma

[Piff]

Number1 son has a Vauxhall Corsa company car which has reached its 3 year limit. He does approx 30,000 miles a year and is a 40% tax payer.
I think his current car is costing him around £152/month income tax.

His company are offering him a new company car, either an Astra Tech Line Nav 1.6 CDTi (110PS) start/stop ecoTEC (MT6)
Or a Crossland X Tech Line Nav 1.6 (99PS) Turbo D Start/Stop ecoTEC BlueInjection.
Or an Insignia Grand Sport Design 1.6 (110ps) Turbo D ecoTEC (MT6)

Any opinions on either of these.

As an alternative they have offered a £610/month cash alternative for him to source his own car. After tax this would net down to £366/month, plus the £152/month company car tax saving, totalling £518/month for him to provide his own car, tax, insure & maintain. The car would have to be 4/5 door, less than 3 year old at purchase date & low mileage.

Any thoughts on possible lease/pcp deals. He doesn’t want to put much down up front as he is saving to move house. Need to factor in insurance costs, which I’m guessing at around £500 to £600/ year (£42 to £50/ month.

All thoughts & comments welcome

 

[Deleted member 6183]

How is fuel paid for?

 

[Rayny]

I suggest that he speak to his company fleet manager - They will know what is best.

 

[Rory]

That's an odd combination - a 40% taxpayer doing 30K/yr in a Corsa!

What's the split in his mileage between business / private? If he does a lot of business miles then there's a mileage allowance and HMRC which bumps thing up a bit. However 30K/yr is hard on a car and I wouldn't want to do that in a car I owned.

 

[Red C220]

At 30K miles a year he's probably still better taking the company car.

What's the fuel situation with or without company car, that could actually be the deciding factor.

 

[fabes]

30k pa will destroy any residual so let someone else cost that (private monthlies will be huge for that reason)
Tyres, servicing, full business use ins are other hidden costs
Take the company car - insignia will be very easy to do the miles in (according to our co car drivers)

 

[brucemillar]

As said above:

30k annual miles is the biggest decider and may make the decision for you regarding any private deal, finance, lease etc who may well balk at that mileage.

30k pa is also hard on maintenance and could lead to heavy bills + car hire costs etc.

As above: How is his fuel paid? That can be a deal clincher. Fuel card? Allowance? Claim back? Private mileage allowance?

It is the hidden/forgotten costs that catch us all out. 30k pa could rack up large tyre bills.

 

[CaptainChaos]

Any company car.

Regardless of the BIK tax, 30,000 miles a year in his own car is going to sting him. He won't get a decent lease deal at that mileage and if he's saving for a house, the last thing he wants is unexpected expenditure.

 

[ph47mf]

I don't have to anything to add about the deals but get him out of vauxhalls, get a bigger and more comfortable motorway cruiser, go drive something a bit more interesting, he will spend a lot of time in that

 

[Deleted member 6183]

It can be done, I did so for many years.

For me the sweet spot was to buy a 3 years old car straight out of a 10kpa lease so low mileage. Run for 2 years so in this case you would be selling a 5 year old car with 90k miles which is not unheard of.

Take the allowance plus the HMRC fuel rate at 45p/mile for the first 10k then 26p for the other 20k.

I was lucky to have taken a good warranty (anyone remember the Tesco warranty?) on my S class which paid out £7k in the first year but didn't bother on the others, 5 series twice, 3 series twice, A4, W211 and so on.

Some years you are up and some you are down, the plus side is getting to drive cars more comfortable at 30k miles per year than a Corsa.

 

[Piff]

How is fuel paid for?

He has a fuel card and that will continue with either of the options.
Most of his miles are business and the company monitor fuel economy. They then have a scheme for private use which I don’t fully understand, but put simply:- If he gets more mpg than they expect, the fuel he has saved is available for his private use, so he pays very little for fuel

 

[Piff]

That's an odd combination - a 40% taxpayer doing 30K/yr in a Corsa!

He is a hearing aid dispenser doing home visits covering quite a large area. Corsa was standard issue for newly qualified staff.
Next car choice is based on achieved sales values.
He has done quite well on the sales and commission earned is approx 1.5 times basic salary.
The company does have shops in major towns and he is hoping to get a shop soon as he will be able to do more time selling and less time driving. His mileage will not change much though initially a the shop he hopes to get is 50 miles from home so private mileage will increase. In time he would want to move closer to the shop.

 

[Piff]

At 30K miles a year he's probably still better taking the company car.

What's the fuel situation with or without company car, that could actually be the deciding factor.

Fuel card with either company car or own car

 

[Piff]

Any company car.

Regardless of the BIK tax, 30,000 miles a year in his own car is going to sting him. He won't get a decent lease deal at that mileage and if he's saving for a house, the last thing he wants is unexpected expenditure.

He bought his first house18 months ago. Currently saving though for a bigger deposit as he wants to move within the next year

 

[Rory]

I'm not sure how it works with a fuel card and your own car. I think (not 100% sure about this) he'd have to repay his private mileage at the HMRC advisory mileage rates Advisory Fuel Rates - GOV.UK but maybe it can be calculated based on actual MPG / cost.

ETA: I suppose they could pay his business mileage based on the Advisory rates and anything they paid over that would be regarded as a benefit-in-kind.

 

[Piff]

I don't have to anything to add about the deals but get him out of vauxhalls, get a bigger and more comfortable motorway cruiser, go drive something a bit more interesting, he will spend a lot of time in that

He does very little motorway driving. A lot of A, B & C roads.
He would like an A Class but that would be pushing his budget.
Company seems to have a Vauxhall only policy particularly at junior levels.

 

[Petrol Pete]

It can be done, I did so for many years.

For me the sweet spot was to buy a 3 years old car straight out of a 10kpa lease so low mileage. Run for 2 years so in this case you would be selling a 5 year old car with 90k miles which is not unheard of.

Take the allowance plus the HMRC fuel rate at 45p/mile for the first 10k then 26p for the other 20k.

I was lucky to have taken a good warranty (anyone remember the Tesco warranty?) on my S class which paid out £7k in the first year but didn't bother on the others, 5 series twice, 3 series twice, A4, W211 and so on.

Some years you are up and some you are down, the plus side is getting to drive cars more comfortable at 30k miles per year than a Corsa.

I did exactly this some years ago. Got into a Vauxhall Omega elite estate (BMW Straight six diesel) Just as it arrived at the main dealer end of lease directors car. Bought it with Warranty put 60K miles on it in two years. Sold it privately , taking into account the HMRC fuel allowance I was quid's in. Mainly because nothing went wrong with it...that's the gamble, warranty or no warranty.

 

[Smart320]

My neighbor has an Insignia, albeit a2L, been out a few times with him and have been pleasantly surprised, seems to ride well and quiet. Given the mileage he is doing would, from my experience in Sales in the uk, not want the hassle of running my own car unless there was a very large cash incentive to do so

 

[Stu22]

For that sort of mileage and for peace of mind I'd take the company offering.
I do circa 35k miles pa, mainly commuting, and would hate to think of the residuals on a nice car if I purchased myself - happily let the company take that with the lease company.
Also always in the back of my mind repair costs when covering higher miles - had a car a few years back that ate its gearbox and DMF, all at my cost!

 

[Piff]

Thanks for all the input.
There was a hope that someone could suggest a “wow” lease deal.
But, it looks like the Vauxhall company car is the sensible option.
I’ve suggested he visits the local Vauxhall dealer to test drive the 3 options.