Car or the cash???

Discussion in 'Off-Topic Chat' started by jamieow, Jul 3, 2007.

  1. jamieow

    jamieow Member

    I've been offered a new job and with it a car or car allowance. My choice.
    In my current job, I have gone for the car (but on a car ownership scheme so I pay less tax).
    I'm wondering on buying my own car and taking the allowance.
    What are the other considerations / tax implicationsof taking the money??
    I'll be doing up to say 20k pa. The allowance will have to also cover maintenance, tax, insurance etc.
    The comp car will be fully expensed with a fuel card but I'd be able to get a nicer car with the allowance.
    I currently have an 55 reg astra 1.7 diesel.

  2. hellyfrost

    hellyfrost Member

    If you're not overly bothered what kind of car you drive, go for the company one as it looks as though it'll cost you less in the long run, whereas if you take the allowance, you'll have to pay extra insurance for the business usage and mileage you'll be doing which will then lower the value of it when you come to sell. But if it's the company car, they'll suffer the losses and you'll not have to worry about petrol and insurance tax etc. If you're bothered about the tax aspect, speak to the company's HR/ accounts dept and see what they say.
  3. TheMusicMan

    TheMusicMan tMP Founder Staff Member

    I always went for the company car option - much more practical when you need new tyres, new exhaust, service, Tax and Insurance.
  4. jamieow

    jamieow Member

    Then you're stuck with a car you may not necessarily like!!
    There's insurance limits, co2 limits etc.
    Anyone have a car on a pcp scheme?
  5. llewellynd

    llewellynd Member

    There are on-line calculators, possibly on the HM Revenue & Customs site that will help with the decission process. Ill see if I can find the link.
  6. Di B

    Di B Member

    I'd advise usually to go for the car allowance.

    You find that the allowance covers all extras (such as maintenance etc) but if you went and bought a new car, you would normally have little expenditure connected to this.
    You may also decide to keep you own car for more than 3 years. If so, you will receive a car allowance that you won't be spending on a car after this time.
    (Most company car allowances are based on a useful life of 3 years from a car)

    Additionally, check if your company pays a mileage rate to those with a car allowance. Most do (but at around 17p a mile instead of 40p). This means that the cost of petrol for work purposes would be covered in addition to your car allowance.

    The negative, is if at present, your company pays you for your private mileage, you would lose it. If you do a lot of private miles and this is the case, then the company car might be the better option.

    As for insurance - you don't have to pay extra for some business insurance.
    Last year I did 6000 miles and have a Class 1 business use policy. It cost me £0.00 to change my insurance policy to incorporate business use :)

    Hope this helps - I agree that the revenue site is useful. I use this to claim some fuel allowance relief each year so I have the link saved -

    Hope this helps
  7. jamieow

    jamieow Member

    Thanks, helpful.
    Am pointing myself towards the allowance at the moment. Though I may have to add a little of my own money to get the car I really want....

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