Company car or cash?

[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..

[DickP]

Strikes me as a situation similar to mine, so maybe look at say three to four year old decent spec Passat and run for three to four years. Should work out okay numbers wise, I think. Best do the calculations yourself though and try to put some pessimism in the value when you would move it on to help give some buffer.

Or spend a bit more with a nicer car and absorb a bit more cost in running and maybe more depreciation, but you can probably easily beat that 10k sum even this way.

[Still Mulling]

Very similar to me. Superb iV private purchase for me very soon. Flexibility and control should I ever choose to part ways with my company.

[RayDonovan]

The swap from Co car to allowance has been ok'd now.

Looking at the market currently (especially Tesla), I think I'm gonna hold onto my Tiguan for another 12 months and then assess the market then.

The business have categorically said no to EVs/Hybrids through the current scheme but they're keeping it open as a company car still suits junior members of the team (20% tax payers)

Knowing me I'll have purchased a Model 3 by the end of the week.

Thanks all.

[RayDonovan]

Just as an update, the policy has been released and the cash alternative for my banding is pathetic (£6k gross)

It's actually less than our upper lease amount for a company car that was agreed back in 2019 (£525). Although when you add the BIK savings to the net cash allowance, the amount is OK it's still a bit tight of the company.

[JD]

RayDonovan said:

The business have categorically said no to EVs/Hybrids through the current scheme

This continues to be the most bizarre company car policy I have ever heard of.

Is the job any good? You are effectively being forced to take a £9k pay cut because of their policy.

[RayDonovan]

JD said:

RayDonovan said:

The business have categorically said no to EVs/Hybrids through the current scheme

This continues to be the most bizarre company car policy I have ever heard of.

Is the job any good? You are effectively being forced to take a £9k pay cut because of their policy.

You're not kidding.
Yes to the other points, very well paid for the sector, 100% job security, relatively little pressure and overall great management/people. It's just the car scheme / allowance they just can't get right. Bizzare