COMPANY CAR OR MINE?! HELP!!
Discussion
I need some help with a tiny dilema.
I have been offered a permanent position in the job I have been doing for around 7 months now. Only problem is it is 35 miles away from where I live. If I get a train pass it will be £230 per month! I currently drive a Honda Civic Type R which I think is pretty good on petrol (depending how you drive it) or I can request a company car. I think you are offered an additional payment each month which equates to around £2,500 per year before tax if you don't take the car. I really don't know what to do. I will be working backshift so a safer option would be to take a car. Can you reclaim your petrol if you do excessive business mileage? Please give me some ideas!!!!
I have been offered a permanent position in the job I have been doing for around 7 months now. Only problem is it is 35 miles away from where I live. If I get a train pass it will be £230 per month! I currently drive a Honda Civic Type R which I think is pretty good on petrol (depending how you drive it) or I can request a company car. I think you are offered an additional payment each month which equates to around £2,500 per year before tax if you don't take the car. I really don't know what to do. I will be working backshift so a safer option would be to take a car. Can you reclaim your petrol if you do excessive business mileage? Please give me some ideas!!!!
You can't make a decision until you know all the detail. And note that travelling back and to work (commuting) isn't classed as business mileage.
If you've got a longish commute and the firm pays your petrol then it may well be a no-brainer taking the company car, but bear in mind there's pretty hefty tax to pay on the car, and also on the fuel, if that is provided.
Run some numbers through here and it will give you an idea:
http://www.cashorcar.co.uk/
If you've got a longish commute and the firm pays your petrol then it may well be a no-brainer taking the company car, but bear in mind there's pretty hefty tax to pay on the car, and also on the fuel, if that is provided.
Run some numbers through here and it will give you an idea:
http://www.cashorcar.co.uk/
Can only claim mileage for 'business use', which specifically excludes commuting to-and-from your main place of work from home.
In addition, £2,500 is piss-poor for a 'car allowance'. Most places offer £4-5k.
And 70 miles per day is a lot - that works out at 17,000 commuting miles alone, plus private use at weekends will put you around 22-25k p.a.
...which will make the depreciation on a CTR quite steep.
Add-in the cost of fuel, and tyres, and servicing, and the company car will almost certainly be financially a lot better a bet.
e.g.
CTR depreciation: £2,500p.a. (assuming an '05 plate over 2 more years before changing)
Tyres: 2 sets p.a. = £800
Servicing: Twice p.a. = £400+
MOT = £50
Difference in fuel (33mpg CTR vs 50mpg diesel over 23k miles @120p / 132p/litre) = £3,800 - £2,750 = £1,050)
Offset: Car tax = usually £80-150pcm depending on car and your tax-rate (22% or 40%) - an e.g. Golf TDi @22% will be £80, a 3-series @ 40% will be >£150). Say £1,200 p.a. perhaps.
So the additional cost of the CTR will be £2,500 + £800 + £400 + £50 + £1,050 - £1,200 = £3,600 a year, or £300 a month.
After tax @ 22% tax + 11% NIC, your £2,500 will pay you c.£1,700p.a. cash, or <£150 a month.
So you'll be over £150 a month worse-off if you try and run the Civic. And that's before any punctures, any repairs, and accident damage or parking dings...
...and you'll be paying interest on any finance as well!
Of course, you will have to drive a company car, rather than a CTR. So it depends if it's worth that much to you to keep the Civic...
In addition, £2,500 is piss-poor for a 'car allowance'. Most places offer £4-5k.
And 70 miles per day is a lot - that works out at 17,000 commuting miles alone, plus private use at weekends will put you around 22-25k p.a.
...which will make the depreciation on a CTR quite steep.
Add-in the cost of fuel, and tyres, and servicing, and the company car will almost certainly be financially a lot better a bet.
e.g.
CTR depreciation: £2,500p.a. (assuming an '05 plate over 2 more years before changing)
Tyres: 2 sets p.a. = £800
Servicing: Twice p.a. = £400+
MOT = £50
Difference in fuel (33mpg CTR vs 50mpg diesel over 23k miles @120p / 132p/litre) = £3,800 - £2,750 = £1,050)
Offset: Car tax = usually £80-150pcm depending on car and your tax-rate (22% or 40%) - an e.g. Golf TDi @22% will be £80, a 3-series @ 40% will be >£150). Say £1,200 p.a. perhaps.
So the additional cost of the CTR will be £2,500 + £800 + £400 + £50 + £1,050 - £1,200 = £3,600 a year, or £300 a month.
After tax @ 22% tax + 11% NIC, your £2,500 will pay you c.£1,700p.a. cash, or <£150 a month.
So you'll be over £150 a month worse-off if you try and run the Civic. And that's before any punctures, any repairs, and accident damage or parking dings...
...and you'll be paying interest on any finance as well!
Of course, you will have to drive a company car, rather than a CTR. So it depends if it's worth that much to you to keep the Civic...
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