[Closed] Own car business milage

Depends on the car.
It's more than enough for mine, fuel at 20p-ish even now, other costs are minimal.
It's only new ones which are depreciating where it might be inadequate, older ones which aren't depreciating (as much) will be fine.
Also if they keep it the same it does encourage the purchasing of more fuel efficient ones

You have to have a very fuel inefficient car for the 45p not to be enough. My last car did low 20’s mpg and even with the price rises that’s only 30p a mile. The extra money on top isn’t to cover the full running cost of your car, just the extra involved in using it for work purposes (eg business insurance, extra servicing etc) which I doubt will be more than 15p a mile.

It’s more than enough for mine, fuel at 20p-ish even now, other costs are minimal.
It’s only new ones which are depreciating where it might be inadequate, older ones which aren’t depreciating (as much) will be fine.

It isn’t designed to cover depreciation, only EXTRA depreciation due to the extra business mileage. So if you do 10k a year private and 5k a year business how much extra does that lose you that 5000x25p (for example if your fuel is 20p a mile) doesn’t cover? That’s an extra £1250 on top of the fuel cost to cover the extras.

I wonder if there are any plans to raise the own car business milage.

There aren't.

I wonder if there are any plans to raise the own car business milage. The .45 per mile seems woefully inadequate to cover petrol plus wear and tear given the price rises.

Your employer can pay whatever they wish, there's nothing preventing them paying 90p or 30p.
If its inadequate maybe speak to them about your personal car use no longer fully subsidising your hobbies.

At 50mpg, fuel cost you 13ppm at 1.40, and 16ppm at 1.80.

The other 30 odd pence is for your tyres, servicing etc.

Despite what leasing companies will try to make you beleive, the value of a car doesn't drop a huge amount with extra miles on the clock.

Come on OP, post a picture of your gas guzzler.

😀

The OP's car earlier today

You have to have a very fuel inefficient car for the 45p not to be enough.

There's more to per-mile running costs than fuel. I once worked out that - on a diesel Mondeo - it was costing me 10p/mile just in rubber.

If I were doing significant business mileage which was sufficient to make me concerned about costs, I think I'd be pushing for a company car.

on a diesel Mondeo – it was costing me 10p/mile just in rubber.

Were you actually putting tyres in the tank and burning them?

If you were paying £200 a corner for tyres that's changing all four every 8000mi

Not really a surprise that most folk haven't a clue what it actually costs to run a car.

When I first needed a car for business use, we only had one car - after less than a month we had to buy my OH a car. The 45ppm wasn't to 'help' run the car, it was to pay for a car, and run it.

And if anything should rise, it's the fuel mileage PPM.

it was to pay for a car,

That would be a car allowance, its not the same thing.

The 45ppm wasn’t to ‘help’ run the car

Yes it was.

If its inadequate maybe speak to them about your personal car use no longer fully subsidising your hobbies

Not sure where I mentioned it was for my hobbies. My hobby is cycling and from my doorstep.
My car is pretty new and very efficient and I work from home. The question was that the 0.45 has not moved for years so would it in light of the current inflationary pressures.

We've just reviewed this and 45p more than adequate. It was a figure set when cars needed more maintenance and were less reliable. Fuel up, maintenance down is the simplistic outcome. Also public transport use up hugely so this is less of a concern to our team than it may have been previously.

So just to tot up my running costs accrued through business use...

Assuming all my milage is business milage 9k per year.

Insurance, including business. £450 (two cars)
Service (BMW main dealer major service) £400
Mot £60
Oil, new head lights etc £200 per year.
Tyres 1per year avg £260ea big brand.
Random repairs avg £500/yr

By my maths £0.21/mi, that leaves £0.24/mi for fuel assuming *all* my costs are business related and if go so far as to say over budget for annual breakages, service costs expensive tyres and so on.

What am i missing?

We’ve just reviewed this and 45p more than adequate.

What size & age of car was this based on?

(@£1.80/l for diesel and a 30mpg I make it £0.30/mi in fuel round town, £0.17/mi motorway at 55mpg)

Not sure where I mentioned it was for my hobbies. My hobby is cycling and from my doorstep.

Sorry, you may be one of the exceptions but the p/mi rate for private car usage is often used as a tax dodge/way to top up a pay cheque.

All things considered, motoring is not really much more expensive now than 10 or even 20 years ago:

- Petrol and Diesel were both 135-145p / litre in 2012, so should be £1.82p / litre now to keep pace with inflation - so prices have actually fallen in real terms (see link below)
- many cars are a good 10-20% more efficient now - so the fuel cost is £1.46 / litre now using the £1.82p and adjusting for efficiency gains
- Car insurance has fallen in real terms
- Car Purchase costs (pre pandemic) have fallen in real terms - with the "trickle down" effect of high end gadgets now being "standard" fit at lower price points

For all the noise about the cost of running a car, most of the people I know are still doing stupidly short journeys. When I walk to pick the kids up from school I see people who live close to us who've driven there (intert head-slap emoji) and are sitting their with the engine running. In cities the number of chelsea tractors being used is quite noticeable - even though they only do 25-35mpg.

We'll know when fuel prices are "really" expensive because there will be:

- less cars on the road and more bikes
- more cars doing 60 instead of 80 on the motorways
- reductions in congestion
- fewer drivers making short journeys
- more people sharing cars with colleagues to get to work
- more public transport use
- improved air quality
- etc etc.

There's little or no sign of any of this happening so it's a shame the government reduced fuel duty - they should be putting it up dynamically until fuel is constantly £2-£2.50 a litre in urban areas - enough to make people think twice. Obviously in rural areas / areas with poor public transport / low paid occupations we would need to give some relief but more fuel duty generated could be ring fenced and used to transform public transport / active travel.

https://www.racfoundation.org/data/uk-pump-prices-over-time

What am i missing?

Against: Half of that stuff you'd be paying anyway for the benefit of owning a car for personal use, it's not a business expense.

For: Depreciation impact on a higher-mileage car, it's worth much less on resale if it's been to the moon and back. Breakdown cover?

For: Depreciation impact on a higher-mileage car, it’s worth much less on resale if it’s been to the moon and back. Breakdown cover?

I just plugged my car into WBAC.
I tried it with 75k, and 150k on the clock which I am guessing would be reasonable low and high milage for its age (2013 Diesel). In reality I'm somewhere in between.

at 75k, it was £5660, at 150k it was £2110. £3550 drop is a big chunk of cash yes, but thats 4.7p worth of depreciation per mile driven.

^ having run my car through WBAC estimator twice, I'm now getting banner ads and texts and emails for the lower price, no mention of the higher price. 🙂

at 75k, it was £5660, at 150k it was £2110. £3550 drop is a big chunk of cash yes, but thats 4.7p worth of depreciation per mile driven.

That's an EXTRA 4.7ppm.

Many companies demand cars a lot newer than your nearly 10 year old example, so often buying new-2 years and selling at 5 years.

Insurance, including business. £450 (two cars)

What about younger folk, should they get more PPM as they can easily pay £1k, esp if urban/big town/city?

Our local NHS Trust are urgently reviewing mileage rates for Community Staff in light of new fuel costs, but I doubt many in the Private Sector are doing the same.

For what it's worth, I get 25p a mile, and a car allowance. I'm reasonably sure I need to hit 32mpg to make it 25p a mile. Sometimes that's easy, sometimes it's not, but I've decided that unless I actually have to take something, or I need to touch something when I'm there, I'm doing it via Teams or Telephone now.

That said, my rate isn't terrible - HMRC have some 'Advisory Fuel Rates' for Company Cars, and I assume those of us with an allowance would fall under this.

They advise 13p to 22p a mile for petrol cars and 11p to 16p for diesel cars, depending on engine size. To make 11p a mile 'work' I think you'd need to be getting 75mpg?

https://www.gov.uk/guidance/advisory-fuel-rates

Many companies demand cars a lot newer than your nearly 10 year old example,

Generally (and I dont claim to speak for everyone) that sort of stipulation on what the car can be comes with a car allowance lump sum + a fuel per mile rate, rather than the "own car, 45ppm" we are discussing here.

intheborders - I've just run my bosses car (because I can see the numberplate from here)

69 plate 5 series.
25k miles £26685
50k miles £23500

12.7p per mile depreciation.

More than my car for sure, but still well in the realms of profitting from the 45ppm, especially as its far less likely to need any repairs or major servicing at its current age.

There’s more to per-mile running costs than fuel. I once worked out that – on a diesel Mondeo – it was costing me 10p/mile just in rubber.

Seriously? You really couldn’t be bothered reading past the first sentence of my post?

This article suggests it costs 47p/mile on average to run a car on 2021.

https://www.nimblefins.co.uk/cheap-car-insurance/average-cost-run-car-uk

Seriously? You really couldn’t be bothered reading past the first sentence of my post?

You should be grateful he read that much.

You realise SOP on any internet forum is to only read the op, then rephrase that in such a way that despite having the same view it sounds like you're arguing with it don't you?

singletrackworld.com/forum/topic/own-car-business-milage/#post-12302498

So if it’s 47p a mile total cost then for the average person 45p a mile to cover fuel and the EXTRA cost of using it for those business miles is more than plenty. Unless you only ever do business miles in the car and never any personal mileage, which would be very unlikely.

A colleague and I asked about this a couple weeks ago. 40ppm was cutting it fine with us requiring vans rather than cars for work purposes, and neither of us being able to afford particularly reliable ones!

They upped it to 60ppm. Can't say fairer than that! (though I wish I'd delayed putting my expenses in by a week or two 😅)