Company car versus own vehicle

Honest John Back Room » The Back Room Archive
What is life like with your car? Let us know and win £500 in John Lewis vouchers | No thanks
View Threaded
Mon 3 Sep 2001 20:19
Company car versus own vehicle - Mike Duhig
Dilema!
What is the true answer as to whether it is more economical to have a company car or run & buy/contract hire your own vehicle?
I will do in excess of 40k miles, will pay some higher rate tax, would get a Mondeo Ghia or a car allowance plus 11p per mile.
With new Benefit in Kind, emissions rules etc is there any definitive answer which way are you better off?????
Reply | Report as offensive | Link
Mon 3 Sep 2001 20:44
Re: Company car versus own vehicle - Michael
Mike, a lot depends on your circumstance. For example, if you take the car, do you get business and private fuel paid for you or do you get an allowance for business fuel? If you take the cash, how much cash do they give you? How will you raise the initial deposit for the car or will you go for a nil deposit pcp, if possible? If you take some form of lease hire, don;t forget to add the interest charges to the overall cost of the car. There are a lot of variables.

Have a look at the Fleet news site at

www.automotive.co.uk/fleetnews/start.htm

It could help you with running costs, depreciation etc.

One final thought, the inland revenue is predicting 200,000 extra company car drivers on the roads as a result of the new company car tax rules. The new rules are less punitive to low mileage drivers but less rewarding to high milers. The inland revenue approved fuel allowance also reduces next year for large engined (over 2litre) privately owned cars claiming fuel allowance for business use.
Reply | Report as offensive | Link
Mon 3 Sep 2001 21:32
Re: Company car versus own vehicle - Marc
Try www.cartax.co.uk/cartaxCalcs/
Reply | Report as offensive | Link
Mon 3 Sep 2001 21:39
Re: Company car versus own vehicle - Mark
Mike

one important point to calculate if you are going to get your own is that most contract hire rates advertised are for 10k pa non maintenance.

I do about 45k per year and when you ask for quotes on this contract hire is not cheap.

If you buy a car yourself work out your cash allowance minus tax and add on the per mile allowance. Then compare against per mile costs from What Car, you soon reach a figure where the allowance plus milage over a certain milage turns against you and you are effectively subsidising your employer. With my old Vectra based on running/depreciation costs (40ppm) as provided by one of the glossies this happened to me at about 1200 miles per month.

You can of course mitigate this by buying nearly new from a supermarket.

If you do buy your own also remember that you can offset your running costs against tax (even if PAYE) by claiming on a P87 each year.

Another advantage is that if you fall out with your employer and you run your own its still in the drive when you part company. Even after 3yrs with say 120k on the clock something like a Vectra/Mondeo/A4 still has a value which is yours when you sell.

as ever

Mark
My Tax Adviser fills these out for £25pa.
Reply | Report as offensive | Link
Mon 3 Sep 2001 21:49
Re Fuel type - Mark
Mike nearly forgot if you do get your own get a TDI, the better milage times the milage allowance helps out quite a bit especially if you rack up the miles and servcing is generally cheaper too.

as ever

Mark
Reply | Report as offensive | Link
Mon 3 Sep 2001 22:06
TDi - yessss! - David Lacey
As I have always said *Get a TDi version, you won't regret it!*

Rgds

David
Reply | Report as offensive | Link
Mon 3 Sep 2001 22:09
Lets's get David Woollard into a VAG TDi - David Lacey
I think it's about time David Woollard gave in and just accepts that the Germans have the edge when it comes to *excellent* TDi engines.

Anybody out there brave enough to shoehorn a VAG TDi motor into a Xantia?

(Sorry DJW, couldn't resist it!!)

Rgds

David
Reply | Report as offensive | Link
Mon 3 Sep 2001 22:11
Re: Lets's get David Woollard into a VAG TDi - Mark
David

Is it worth the effort?, the rest of the VAG product is superior as well.

As ever

Mark
Reply | Report as offensive | Link
Tue 4 Sep 2001 11:46
DW Diesel Choice. - David Woollard
Big subject this, too big for a thread really.

Firstly you will notice over time I never really knock one car or another, merely saying one may be better than another for a particular circumstance.

Then there is my own position. Having chosen to leave the company sponsored life, where the latest new car option was a no.1 topic at lunch, my car needs are more modest...as is the available budget.

Many of my customer's cars are from the middle nineties and I rarely get the chance to drive the "cutting edge" new models. Most of the newest cars I look after tend to be the mid to small end of the market. The main dealers keep a grip on most larger cars for the first few years. Fair enough.

Perhaps the latest VAG diesels are better than the latest Citroen models but Citroen must take a lot of the credit for introducing the diesel to the family man. In the early eighties other diesels were very rough, including VAG, but the introduction of the Citroen/Peugeot 1.7/1.9 models changed all that.

From my own point of view our early Xantia has no rust, no dents, mint interior, almost inaudible diesel at 70-mph in top, rides as well as anything in its range and cost buttons to buy. Importantly it has no ECU related fuelling controls, something that is going to really cause problems for the cars you mention as they age. And beside the tractor (18mph cruise) and diesel Land Rover (45mph cruise) it is very capable.

So horses for courses.

David (ever moderate)
Reply | Report as offensive | Link
Tue 4 Sep 2001 23:22
DW Diesel Choice - Xantia! - David Lacey
Totally agree with you David - nothing wrong with the Xantia TD at all.

We look after a fleet of Xantia TD's and I have to report no major faults, with the exception of one cambelt failure.

Smooth drive, decent performance/economy, good handling & roadholding, cheap parts and helpful dealers are just a few good points of owning a Xantia or indeed any TD Citroen (Excepting the capable & spacious XM - just a little too much to go wrong here)

Rgds

David
Reply | Report as offensive | Link
Sun 30 Sep 2001 22:54
Re: DW Diesel Choice - Xantia! - Geoff Baldwin
Hi
Saw your message on the Honest John web site. Wondered if you new anything about water ingress in a '94 Xantia. I am 99% certain that the water found under my back seats is coming from the sun roof. I believe there has been a modification and wondered if it was a DIY job.
Thanks
Geoff Baldwin
Reply | Report as offensive | Link
Mon 3 Sep 2001 23:04
Re: Lets's get David Woollard into a VAG TDi - Dave M
Is it worth it? if you are going to start shoehorning engines at least use a petrol and have a car worth driving
Reply | Report as offensive | Link
Tue 4 Sep 2001 09:43
Re: Tdi's - Andrew Smith
There speaks a man who cannot have driven a modern Diesel. Give it a try you may be suprised.
I rate them as significantly better than the equivalent petrol even before you take fuel consumption into account.
Reply | Report as offensive | Link
Tue 4 Sep 2001 10:43
Re: Company car versus own vehicle - Paul Robinson
Mike

This is such a difficult question, because ?the true answer? depends on so many
individual factors. Dilemma is a perfect word for these circumstances! As an
accountant in general practice, I am increasingly being approached by inividuals in this situation. People will say I?m not objective with this comment, but because the costs of making the wrong decision are so high, I sincerely believe it is worth paying for professional advice from someone who will identify all your individual criteria and do the two computations (1) With company Mondeo Ghia (2) With your choice of private car. (as a guide I charge about £100 for this).

I would make a couple of general comments - while sites like www.cashorcar.co.uk can offer some guidance, it is mainly on a like for like basis, where as most people want to know if they would be better off taking the company Mondeo or running a five year old BMW 525 with the car allowance, and that has to be worked out on an individual basis. Also remember to include in your computations the fact that if your car allowance is taxed, you can claim tax relief on your mileage at a much higher rate than the 11p your employer will be paying.

Good luck with your deliberations!
Reply | Report as offensive | Link