[Closed] Company cars...... How do they work ?

Had one for two years - plus points are free* new car/insurance/tax/servicing/repairs/consumables**, versus benefits in kind tax - Focus 1.5Td was about £100 a month, Golf GTD about £150. They were lovely to have - need a service? Book in at a main dealer and it's all taken care of, no nasty surprises, lovely. The slternative was 4.8k car allowance, until company cars were ruled out, then you HAD to buy a car and take the allowance.

* Free in that you don't have to pay out directly for any of it.

** Not including fuel.

Depends on the company, generally they lease you a car which includes servicing, tax etc. They sort insurance. You then pay a lot of extra tax, will dependbon the value of ghe car, engine etc. Its not as attractive as it used to be as they've been steadily pushing the tax rates up. You also have nothing to show for if you leave. You might also get little say in what car you get which may include a 3 year old vehicle that's not been looked after and still has a year on the lease. My preference would be to ask for car allowance which is effectively a salary increase.

Also - if you have already built up a significant NCD you may find you are starting from scratch when you leave the company car scheme.

My preference would be to ask for car allowance which is effectively a salary increase.

they might insist on some caveats to what car you have to drive:
Age (if you're going to client meetings)
4 door (if there is ever any chance you may ever have to give 2 people a lift as part of your job)
Emissions (if they have some poorly thought out green initiative in place)

All seemingly designed to stop you getting anything fun, and the carpark ends up full of golfs, focuses and A3s just like it would have done if there was a company car scheme, but without effort or risk on their part.

And if your current car doesn't meet these you may have to change it to get the money or just wait until you get a new one.

Also note - if you're driving for work rather than just driving to work (commute to single fixed office) then using your own car means you can claim 45p per mile as an expense. Using a company car (without a fuel card) you are stuck with whatever rule they put in place to cover your fuel which generally is too stingy to cover your costs.

I have had a company car for 6 years.
I have been lucky that I was given a good choice and could pick what I couldn’t afford my self. I have a 330e coming a £40k car that I will pay next to nothing on.

Pro-
New car every 3 years
All costs covered by company.
Me and my partner use it as our own car. Its cheaper than buying and running my own car.

Cons-
I have to pay an increased amount of tax (still cheaper than running my own)
My car choice is dictated by the bik tax. The bmw is cheap. Electric are even cheaper.

Also note – if you’re driving for work rather than just driving to work (commute to single fixed office) then using your own car means you can claim 45p per mile as an expense. 

Not necessarily - ours paid mileage according to fuel and engine size, then there was some tax gubbins too boring for me related to the difference between what they paid and the 45p per mile.

Cost depends upon list price and emissions. There is a good calculator at the link below:

https://comcar.co.uk/companycar/tax/select/

If you will be driving significant miles as part of your new job having a company car versus taking an allowance is the worry free option.

If you consider taking the allowance check that there are no strings attached - I know some specify that the vehicle must not be older than 4 years and must be under a certain mileage.

re. insurance when I moved to a new job without a company car I was able to get a statement from the previous company that I had not been involved in any accidents/incidents for 6 years and this was accepted as a no claims bonus equivalent when insuring my new (non-company) car.

I would use the calculator above to work out your tax liability. I really enjoyed getting a new car every three years and had some fun cars including a Toyota Celica 190 and Nissan X-Trail - your choice may be limited though and CO2 output will be a big factor in your choice.

Great. Thanks for the info.

What about company vans. Are they the same sort of thing ?

Vans are different.
I think of the van has a load carrying capacity of >1000kg the. It is classed as a lgv and taxed at a flat rate which i think is around £55

Something else to consider, if you have kids the BIK is added to your salary to see if you’re over the £50k Child Benefit limit. Also any allowance in lieu of a car will be taxed. So where a, say, £500 pcm sounds good, after tax you’ve only got c£350 pcm to fund , tax, insure, service and fuel a car.

If you drive the car for work (ie sales) get the company car if u commute to one office take the cash, our scheme has been effectively pulled in the new tax year and everyone gets cash allowance, the only problem it’s benchmarked to rivals and so the figure hasn’t changed in 12 years, doesn’t go up with inflation

You might also get little say in what car you get which may include a 3 year old vehicle that’s not been looked after and still has a year on the lease.

Yeah this, 6yr old car with 110k miles on the clock before I got it & tax is the same as if it were new, fine by me as I don't give a shit about cars - so long as I can get my bikes in the back is all good with me.

I was FTC for the two years I had one, so I didn't get any choice - swings and roundabouts, Focus and Golf were great. 🙂

If you drive the car for work (ie sales) get the company car if u commute to one office take the cash

No brainer to take the car if you travel around for work. If it’s borked, work have to sort a replacement so you can carry out your job. If it’s your car, the hassle is yours.

Regarding if you commute, that’s going to depend on the BIK vs cost of ownership. I’ve got a co car with fuel paid. For me the tax on the BIK per month is less than the monthly cost of fuel alone when I was initially using my own car.