Company car or cash?

[RayDonovan]

Thanks but we're strictly forbidden for trying to declare company cars as "Business use only" (and it wouldn't work for us anyway).

Lots of different options in how to move forward with replacing the company car, I would prefer something nice and comfortable as I need to do a 450 mile round trip once per month at least (and I like having a nice car!)
EVs appeal to my nerdy side, I have no issues with charging at home and the office and i'm able to plan charging around trips / longer journeys with few issues.

[JD]

RayDonovan said:

Hopefully getting a little closer to being able to switch from a company car to a car allowance

Still favouring a 2021 Tesla Model 3 LR, sums as below

£10k savings
£15k loan

£352/month for the loan (£15k over 48 months)
£65/month for the insurance (checked and have been quoted)
£50/month into savings for tyres and servicing

Total running costs of £437/month

BIK savings of £450/month & £7k PA (£350 net per month) give a total monthly budget of £800.
£363 monthly saving v company car (£800-£437).

Work will pay me 15p per mile, but I can claim the tax relief for the first 10k which comes out at 12p per mile. That will give me 27p per mile for business use and should cost me around 3p per mile to run, based on EON EV tariff at 9.5p per kWh. Even using Tesla Superchargers on a longer journey I would still be in the positive.

You are however totally ignoring the fact you are putting in £10k of your own money…

Still no hybrids or EV on the company car list?

[RayDonovan]

JD said:

RayDonovan said:

Hopefully getting a little closer to being able to switch from a company car to a car allowance

Still favouring a 2021 Tesla Model 3 LR, sums as below

£10k savings
£15k loan

£352/month for the loan (£15k over 48 months)
£65/month for the insurance (checked and have been quoted)
£50/month into savings for tyres and servicing

Total running costs of £437/month

BIK savings of £450/month & £7k PA (£350 net per month) give a total monthly budget of £800.
£363 monthly saving v company car (£800-£437).

Work will pay me 15p per mile, but I can claim the tax relief for the first 10k which comes out at 12p per mile. That will give me 27p per mile for business use and should cost me around 3p per mile to run, based on EON EV tariff at 9.5p per kWh. Even using Tesla Superchargers on a longer journey I would still be in the positive.

You are however totally ignoring the fact you are putting in £10k of your own money…

Still no hybrids or EV on the company car list?

Nope, no EVs or Hybrids due to lease costs
I am putting in £10k but the car will retain some value after 4 years and I'm 'saving' £363 compared to my current situation.
The other option is to keep in the scheme and keep spending £450/month in BIK with nothing to show.

[DickP]

If taking the car allowance does it have to be electric? Why not a nicely specced diesel or petrol car?

[RayDonovan]

DickP said:

If taking the car allowance does it have to be electric? Why not a nicely specced diesel or petrol car?

No, can be pretty much anything.

[Mr Tidy]

I only ever had one Company car, a Rover 214 SLi I got in March 1992 partly because BIK tax was less than the two 1.8 litre Sierra alternatives I was offered - and it was more powerful anyway!

But my employer went bust and I had to give it back in December 1992.

So security of employment might be worth considering!

Which is probably why the next time I had a job with the offer of a company car I took the monthly allowance and an interest free loan to fund it, although the loan was taxable as a BIK if it was over £5K. So I borrowed £4,800 over 4 years, which was handy as I left in less than 3 years but still had a car.

[MrSpanky49]

I’m on an allowance (£700pcm) as our company cars are diesel only. There are some ’rules’ in our contract but they’re open to interpretation and my boss basically said ‘no sheds’. I’m currently running a pcp but going to get out of that and look at spending £8-10k on a barge to keep for 2-3 years (A5/A6 C/E class are the main contenders)

[DickP]

Though something to consider due to much greater cost of buying and then running a car the allowance doesn’t go very far compared to four years ago. Mine is £300 after tax, and even if you add the saving difference of a company car in tax (which obv would be electric so low BiK) there’s only around £4k per annum to buy, insure, tax, service etc. Couldn’t even get my current Superb like for like now at that let alone including running costs!

[Alfa Pete]

^ This is very true. Cost of cars has increased and insurance so my allowance doesn’t go as far as when I first did the sums.
I worked out tax savings and additional allowance gave me £6k to work with.
I’m not sure I break even anymore and I’m considering going back to a company car possibly a PHEv with low BIK tax.
Don’t for get to factor in the uncertainties like replacing damaged wheels and tyres due to potholes etc too.

[JD]

RayDonovan said:

Nope, no EVs or Hybrids due to lease costs

I just don’t think you are looking in the right places.

What is your company allowance and required deal?

Leaseloco have a phev Leon estate for £360 a month on 10k miles, or a Cupra Formentor for £380

[RayDonovan]

JD said:

RayDonovan said:

Nope, no EVs or Hybrids due to lease costs

I just don’t think you are looking in the right places.

What is your company allowance and required deal?

Leaseloco have a phev Leon estate for £360 a month on 10k miles, or a Cupra Formentor for £380

Crossed wires. We can't have EVs or Hybrids within the company car scheme due to the costs (20k PA / Fully maintained). If we opt for the car allowance, we can have what we want..

[TwigtheWonderkid]

RayDonovan said:

JD said:

RayDonovan said:

Hopefully getting a little closer to being able to switch from a company car to a car allowance

Still favouring a 2021 Tesla Model 3 LR, sums as below

£10k savings
£15k loan

£352/month for the loan (£15k over 48 months)
£65/month for the insurance (checked and have been quoted)
£50/month into savings for tyres and servicing

Total running costs of £437/month

BIK savings of £450/month & £7k PA (£350 net per month) give a total monthly budget of £800.
£363 monthly saving v company car (£800-£437).

Work will pay me 15p per mile, but I can claim the tax relief for the first 10k which comes out at 12p per mile. That will give me 27p per mile for business use and should cost me around 3p per mile to run, based on EON EV tariff at 9.5p per kWh. Even using Tesla Superchargers on a longer journey I would still be in the positive.

You are however totally ignoring the fact you are putting in £10k of your own money…

Still no hybrids or EV on the company car list?

Nope, no EVs or Hybrids due to lease costs
I am putting in £10k but the car will retain some value after 4 years and I'm 'saving' £363 compared to my current situation.
The other option is to keep in the scheme and keep spending £450/month in BIK with nothing to show.

But in the interim, you're losing the interest on £10K, so about £500 a year, or £2K currently over 4 years. And insurance costs, £65/month now, what if you have a claim during the year, or get a conviction. What if you have 2 claims. Insurance costs can go quite easily from £800 to £2500 in a year if things don't go well.

[RayDonovan]

TwigtheWonderkid said:

RayDonovan said:

JD said:

RayDonovan said:

Hopefully getting a little closer to being able to switch from a company car to a car allowance

Still favouring a 2021 Tesla Model 3 LR, sums as below

£10k savings
£15k loan

£352/month for the loan (£15k over 48 months)
£65/month for the insurance (checked and have been quoted)
£50/month into savings for tyres and servicing

Total running costs of £437/month

BIK savings of £450/month & £7k PA (£350 net per month) give a total monthly budget of £800.
£363 monthly saving v company car (£800-£437).

Work will pay me 15p per mile, but I can claim the tax relief for the first 10k which comes out at 12p per mile. That will give me 27p per mile for business use and should cost me around 3p per mile to run, based on EON EV tariff at 9.5p per kWh. Even using Tesla Superchargers on a longer journey I would still be in the positive.

You are however totally ignoring the fact you are putting in £10k of your own money…

Still no hybrids or EV on the company car list?

Nope, no EVs or Hybrids due to lease costs
I am putting in £10k but the car will retain some value after 4 years and I'm 'saving' £363 compared to my current situation.
The other option is to keep in the scheme and keep spending £450/month in BIK with nothing to show.

But in the interim, you're losing the interest on £10K, so about £500 a year, or £2K currently over 4 years. And insurance costs, £65/month now, what if you have a claim during the year, or get a conviction. What if you have 2 claims. Insurance costs can go quite easily from £800 to £2500 in a year if things don't go well.

All points to consider but I am 'saving' nearly £4k per year compared to my current situation. There's no perfect solution really as each option bares a risk

[JD]

RayDonovan said:

Crossed wires. We can't have EVs or Hybrids within the company car scheme due to the costs (20k PA / Fully maintained

You keep saying that but not what the budget is?

[RayDonovan]

JD said:

RayDonovan said:

Crossed wires. We can't have EVs or Hybrids within the company car scheme due to the costs (20k PA / Fully maintained

You keep saying that but not what the budget is?

£550/month on a 3+35, 20k PA Fully maintained. Has to be BMW, VW, Skoda or Audi.

[JD]

RayDonovan said:

£550/month on a 3+35, 20k PA Fully maintained. Has to be BMW, VW, Skoda or Audi.

I could find Golf, Tiguan, A3, Skoda Octavia that were in budget. They would knock £300+ off your BIK bill.

also Seat and Cupra but not sure if those count.

[Castrol for a knave]

JD said:

RayDonovan said:

Hopefully getting a little closer to being able to switch from a company car to a car allowance

Still favouring a 2021 Tesla Model 3 LR, sums as below

£10k savings
£15k loan

£352/month for the loan (£15k over 48 months)
£65/month for the insurance (checked and have been quoted)
£50/month into savings for tyres and servicing

Total running costs of £437/month

BIK savings of £450/month & £7k PA (£350 net per month) give a total monthly budget of £800.
£363 monthly saving v company car (£800-£437).

Work will pay me 15p per mile, but I can claim the tax relief for the first 10k which comes out at 12p per mile. That will give me 27p per mile for business use and should cost me around 3p per mile to run, based on EON EV tariff at 9.5p per kWh. Even using Tesla Superchargers on a longer journey I would still be in the positive.

You are however totally ignoring the fact you are putting in £10k of your own money…

Still no hybrids or EV on the company car list?

I agree. You have to consider the cost of your own capital. That £10,000 could be in an ISA, of whichever flavour, earning you money or at least, not being eroded by depreciation.

[Muzzer79]

Castrol for a knave said:

JD said:

RayDonovan said:

Hopefully getting a little closer to being able to switch from a company car to a car allowance

Still favouring a 2021 Tesla Model 3 LR, sums as below

£10k savings
£15k loan

£352/month for the loan (£15k over 48 months)
£65/month for the insurance (checked and have been quoted)
£50/month into savings for tyres and servicing

Total running costs of £437/month

BIK savings of £450/month & £7k PA (£350 net per month) give a total monthly budget of £800.
£363 monthly saving v company car (£800-£437).

Work will pay me 15p per mile, but I can claim the tax relief for the first 10k which comes out at 12p per mile. That will give me 27p per mile for business use and should cost me around 3p per mile to run, based on EON EV tariff at 9.5p per kWh. Even using Tesla Superchargers on a longer journey I would still be in the positive.

You are however totally ignoring the fact you are putting in £10k of your own money…

Still no hybrids or EV on the company car list?

I agree. You have to consider the cost of your own capital. That £10,000 could be in an ISA, of whichever flavour, earning you money or at least, not being eroded by depreciation.

I always looked at it in such a way that

£10k savings - this is my investment in the car. My sums need to calculate that I get this back at the end of the term I own the car for, if I sell it.
£15k finance - this covers the remainder of the cost and depreciation.

The goal is to have more than £10k at the end of the term - this is a risk, so the number needs to be conservative and the car chosen well.

I've had 2 or 3 cars on 'opt-out' with this philosophy and always had more than my '£10k' at the end - covering what that £10k would have earned sitting in a bank.

Selling my last one in early 2023, near the peak of Covid-boosted car prices, was particularly satisfying. YMMV obviously.....


Additionally, the OP doesn't seem to have much choice - it's either opt out or pay through the nose in tax on BIK. I get the impression he doesn't have the ability to phone his fleet department and suggest cheaper deals that are available on hybrid/electric new cars.....

[Castrol for a knave]

Muzzer79 said:

Castrol for a knave said:

JD said:

RayDonovan said:

Hopefully getting a little closer to being able to switch from a company car to a car allowance

Still favouring a 2021 Tesla Model 3 LR, sums as below

£10k savings
£15k loan

£352/month for the loan (£15k over 48 months)
£65/month for the insurance (checked and have been quoted)
£50/month into savings for tyres and servicing

Total running costs of £437/month

BIK savings of £450/month & £7k PA (£350 net per month) give a total monthly budget of £800.
£363 monthly saving v company car (£800-£437).

Work will pay me 15p per mile, but I can claim the tax relief for the first 10k which comes out at 12p per mile. That will give me 27p per mile for business use and should cost me around 3p per mile to run, based on EON EV tariff at 9.5p per kWh. Even using Tesla Superchargers on a longer journey I would still be in the positive.

You are however totally ignoring the fact you are putting in £10k of your own money…

Still no hybrids or EV on the company car list?

I agree. You have to consider the cost of your own capital. That £10,000 could be in an ISA, of whichever flavour, earning you money or at least, not being eroded by depreciation.

I always looked at it in such a way that

£10k savings - this is my investment in the car. My sums need to calculate that I get this back at the end of the term I own the car for, if I sell it.
£15k finance - this covers the remainder of the cost and depreciation.

The goal is to have more than £10k at the end of the term - this is a risk, so the number needs to be conservative and the car chosen well.

I've had 2 or 3 cars on 'opt-out' with this philosophy and always had more than my '£10k' at the end - covering what that £10k would have earned sitting in a bank.

Selling my last one in early 2023, near the peak of Covid-boosted car prices, was particularly satisfying. YMMV obviously.....


Additionally, the OP doesn't seem to have much choice - it's either opt out or pay through the nose in tax on BIK. I get the impression he doesn't have the ability to phone his fleet department and suggest cheaper deals that are available on hybrid/electric new cars.....

Seems fair. I used to look at it similar, but I tend to do big miles and my depreciation curve is not pretty. I tended to go for a smaller investment in the car, which I suppose compounds the end value issue, but means I get to keep £x thousand in the bank/ISA/weekend car

[RayDonovan]

Muzzer79 said:

Castrol for a knave said:

JD said:

RayDonovan said:

Hopefully getting a little closer to being able to switch from a company car to a car allowance

Still favouring a 2021 Tesla Model 3 LR, sums as below

£10k savings
£15k loan

£352/month for the loan (£15k over 48 months)
£65/month for the insurance (checked and have been quoted)
£50/month into savings for tyres and servicing

Total running costs of £437/month

BIK savings of £450/month & £7k PA (£350 net per month) give a total monthly budget of £800.
£363 monthly saving v company car (£800-£437).

Work will pay me 15p per mile, but I can claim the tax relief for the first 10k which comes out at 12p per mile. That will give me 27p per mile for business use and should cost me around 3p per mile to run, based on EON EV tariff at 9.5p per kWh. Even using Tesla Superchargers on a longer journey I would still be in the positive.

You are however totally ignoring the fact you are putting in £10k of your own money…

Still no hybrids or EV on the company car list?

I agree. You have to consider the cost of your own capital. That £10,000 could be in an ISA, of whichever flavour, earning you money or at least, not being eroded by depreciation.

I always looked at it in such a way that

£10k savings - this is my investment in the car. My sums need to calculate that I get this back at the end of the term I own the car for, if I sell it.
£15k finance - this covers the remainder of the cost and depreciation.

The goal is to have more than £10k at the end of the term - this is a risk, so the number needs to be conservative and the car chosen well.

I've had 2 or 3 cars on 'opt-out' with this philosophy and always had more than my '£10k' at the end - covering what that £10k would have earned sitting in a bank.

Selling my last one in early 2023, near the peak of Covid-boosted car prices, was particularly satisfying. YMMV obviously.....


Additionally, the OP doesn't seem to have much choice - it's either opt out or pay through the nose in tax on BIK. I get the impression he doesn't have the ability to phone his fleet department and suggest cheaper deals that are available on hybrid/electric new cars.....

Good points and yes, your assumption is right. We're a global company but each car policy is determined locally. Alphabet tell us what we can order (from a list). Even our Fleet manager has no say over the car list that Alphabet provide..