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Dull, dull, dull and how long is a piece of string, I know.
So some context; getting fed up of the way my company is going, a rival have been chasing me for a while as they have some big contracts coming up. They are offering a car allowance instead of a company car. At the moment I have a Passat GTE estate company car, really like it, it's the nicest car I've ever had. So what would be a decent allowance to let me PCP something equivalent bearing in mind I would need to maintain and insure it etc plus some risk for damage on return (3 messy kids)? The allowance would be taxed at 40%, BIK on the Passat is about £225 per month but can't get them at the mo
£6456
See now I'm on the calculator because I know you're a QS perchy. But I also know you're a chortley chortle pants so I'm simultaneously stroking my jaw and muttering "chinny reck-on". Don't toy with me, man!
Not a fancy calculation.
I thought it was quite reasonable when I negotiated it
Didn't think it sounded a million miles out
£6456
How bizarre, thats exactly what I get.
If a company can’t match my present chauffeur driven vehicle then I wouldn’t even consider their offer
I think we get 7.5k which people seem to get ok cars with, previous place did 7 I think. I just run a reliable 11 year old Mondeo and keep the cash tho.
Blimey, my car allowance is crap compared to everyone else's at £4200......
£7.5k pa and you can only get an "OK" car?
Hire from Ling and get it all in for £500 (+VAT)
I would say £8k pa
Blimey, my car allowance is non existent for doing 12k a year business miles.
I'd say 8k for a reasonable car. Although all this is dependent on your mileage if you are on a PCP or lease hire.
Bear in mind you need to cover maintenance, insurance including business mileage and a rental car should you ever have an issue with your own
Ours is £6000 a year.
Works out at £340ish a month after tax.
How good or bad that is is pretty greatly affected by how many miles you do and whether you can get a deposit together.
I’ve just leased a very high spec Skoda Superb for £300 inc a service package. 12k a year. I can give it back after 3 years, keep it for 4 or buy it at the end (I won’t). Its 2 years old, but coming out of a company car and our savings being completely off-limits looking for a 1+35 or 0% deposit was limiting.
My £40 a month is very tight if you’re looking not to put in a bit yourself. We’re keeping the fleet insurance in work for another 18 months that helps but I’m looking at a £200 DSG service in a year and a £500 cam belt in 2.5 years and mentally my diesel (MASSIVE) family saloon takes £250 tyres, £250 a TYRE HTF?!
Anyway, yeah.
£7.5k pa and you can only get an “OK” car?
Well I don't really pay that much attention. They drive middle management cars! It'd take quite a few years to save up your car allowance to buy a 'premimum' car wouldn't it. Unless you go down the lease / finance route I suppose - I'd rather avoid the debt tho.
Frankly buying a new car seems a waste of money to me. That's not to say I don't understand that other people have different priorities to me! Each to their own.
£7.5k a year is only £375 a month if you're a 40% tax payer. Knock off £30 for insurance and £45 for tax/maintenance, and you're down to £300/month. Once your deposit is wound in, with reasonable mirage, that's pretty much astra money. I'd also class that as an 'ok' car..
Most places with an allowance have limitations on the age of a car. Mine doesn't so I have a cargo bike and a 13 year old Vauxhall (just as well - at £3600 a year I'm not going to get much better..)
(also that 7.5k becomes significantly less after tax and NI of course)
Most places with an allowance have limitations on the age of a car.
Interesting. Neither places that I've had an allowance at cared about my car (or even if I had a car). Why do they car what you drive to work in - if it's passed its MOT and insured then it's fine surely.
I guess if you're a sales person you may want to make an impression, tho that's a bit borderline - when I'm looking at suppliers I've never factored in their BMW 318i!
£7.5k a year is only £375 a month if you’re a 40% tax payer. Knock off £30 for insurance and £45 for tax/maintenance, and you’re down to £300/month. Once your deposit is wound in, with reasonable mirage, that’s pretty much astra money. I’d also class that as an ‘ok’ car..
Yet, for that sum I have a fully loaded 2017 320d 2yo Touring Msport Auto in the garage at £231 a month. I’m sure the bmw haters will want to chip in, buts that’s more than an “ok” car. You don’t have to buy new, mine was 1yo ex demo with a few thousand miles on the clock, and £12k less than list as a result.
I guess if you’re a sales person you may want to make an impression, tho that’s a bit borderline – when I’m looking at suppliers I’ve never factored in their BMW...
Lol, see above. Our place removed the “5yo” limitation and replace it with “suitable for your role and position” or words to that effect.
Interesting. Neither places that I’ve had an allowance at cared about my car (or even if I had a car). Why do they car what you drive to work in – if it’s passed its MOT and insured then it’s fine surely.
It’s usually because car allowances are only for people who need a car to do their job. So yeah you could take the thousands a year and run a £500 Mondeo, but they’re going to be very pissed off if you can’t do your job because it’s shat the gearbox or whatever and yeah you could say “I’d rent a car” but often the people who’ll take a £7k allowance and run a banger are the last people who’ll want to spend £150 a day to rent one.
If it’s a ‘status’ allowance then what’s the point? It’s not like it’s taxed differently to salary, just call it salary.
Totally agree. I'd love it to be part of my salary instead of benefits, as then it'd count in the bonus and pension calcs. I assume that's why they don't. I think we have the option of actually getting a car as well (works out as more than 7.5k presumably cause they get a bulk discount) - but when I briefly looked into it you seem to get taxed through the arse.
I guess my current place and last place just see it as a status thing that's expected by recruits when you get to a certain level. I believe if I did any travel (which I don't over than driving to work and ocassionally London on the train) there's no obligation to use my car and if I did I'd get milage.
(for what it's worth I imagine my Mondeo is worth 500 quid 😀 on the one occasion it did breakdown and needed a new clutch I just hired one from enterprise for the week)
2017 320d
Sounds like fairly normal sales-rep fodder to me. Assuming that's cost you around £20k, that £231 won't be paying the loan off very quick. Assuming you need to change a car at 4 years old, £300 a month is a £10k loan over 3 years (5% interest) so buying a 1 year old car costing £15k (e.g. astra) and selling it at 4 years old for £6k won't save you much cash
Ref : why do they care - if you're travelling to site and your company is paying, they don't want you driving something that might not get you there. They often have rules on number of doors etc.
If it’s a ‘status’ allowance then what’s the point? It’s not like it’s taxed differently to salary, just call it salary.
because then it would be pensionable, bonusable, guaranteed i.e. a greater fixed cost
Fair point on the if they're paying they don't want you breaking down. Tho from my office it seems to be the people in 19 plate LR evocs that seem to break down!
My car allowance is £4560 a year which isn't a lot compared to most places but they are pretty relaxed about age of car - more concerned about the CO2 emissions.
Assuming you need to change a car at 4 years old
Do they melt or something?
Ha, my girlfriend's car allowance is a pathetic $50 per month (that's Canadian $$ as well, so worth even less than US $$!) AND she is contractually required to have a car for work purposes 🙁
Sounds like you're all pretty fortunate to me!
Sounds like fairly normal sales-rep fodder to me
It might, it also does a great job of economically carting my bikes around and is quite a pleasant place to be whilst doing so. I’m doing minimum 1000 miles a month and I’d rather be doing that in my car than an Astra -YMMV.
Anyway the point was, the direction of the content was that you can only get an “average” car for the stated allowance and I’m demonstrating that if you look around you can get something pretty decent.
In addition to the BIK saving of opting out of a Company car scheme, and taking a car allowance instead,that no one else has mentioned yet. is that you can claim income tax relief on business mileage , on the difference between the HMRC approved rates of and mileage rate that your company pays. For example HMRC approved rate is 45p / mile for the first 10,000 business miles and 25p per mile thereafter. My company pays 14p / mile, so I claim tax relief on the difference. If you do a high business mileage say 20-30k miles per year in my case this adds up to a not inconsiderable sum. A couple of £k each year in my case.
Do they melt or something
Based on it being a requirement of the car allowance, as it often is. Also, if you're comparing the allowance to a company car alternate, the sum should allow for a new car to be comparable - its not apples to apples otherwise. It's obviously possible to run a car for less - bangernomics makes mine <£100/month including maintenance, insurance and depreciation, but it's hardly a brand new 5 series
Blimey I think some of you lot have it easy - we have a list of rules!!!
It must not be;
• Parallel or Grey Import
• Left hand drive
• Mini bus
• Kit cars
• Vintage/Classic car
• Pickup truck, utility vehicle or campervan
• Motorcycle
• Light Commercial Vehicle
• A car fitted with 'bull bars'
• Liquid Petroleum Gas (LPG) or full electric vehicle
• exceeding 125,000 miles
• a performance vehicle if you are under 25 years old or have had your licence for less than two years
It must be
• less than six years old
• legal, safe and fit for business purposes with a valid MOT certificate and road fund licence at all times
• serviced according to the manufacturer's specification
Allowances range from just over 400 to over 1000 depending on your level in the organisation.
Blimey, you lot get some nice allowances. I get about 400 quid a month, or 240 after tax.
I do however run an ancient old Saab which is far nicer than a car I could get through the company, albeit a bit older.
I then spend the 240 on overly priced bike parts and complain about it on the internet.
Do they melt or something
Based on it being a requirement of the car allowance, as it often is.
Its a good point. Often contracts or allowances are time limited (3/4/5yrs etc.) Which effectively means it may as well melt - the car or the allowance.
My job before this one had a very strict set of criteria not unlike the one above ^^. If the allowance was opted for we even had inspections once every two years. The hassle it caused was obviously hassle in itself. It did state in the contracts you could change cars as many times as you like, so long as it fitted within the criteria.
The consequence of this is most folks would change cars every year to the latest/highest spec ones they could. It became a bit of a one-upmanship game.
In the dim distant past I used to look after a fleet of 58vehicles (a subset of my role) and honestly the chaos and constant calls to the fleet team was a proper PITA. I was glad when we outsourced it and adopted the allowance.
My £8k quote up there ^ is based on my own peer group, it’s actually more than that.
We get £165/m...
Ha, my girlfriend’s car allowance is a pathetic $50 per month (that’s Canadian $$ as well, so worth even less than US $$!) AND she is contractually required to have a car for work purposes
Cars in North America are cheap though! 2 buttons and a bag of dolly mixtures will get you a new Mustang. At 50CAD your girlfriend must have a chaffeur too! 😀
It’s an impossible question to answer without one vital piece of information. Whats your yearly milage going to be.
I do 35k a year business and private, I would need roughly 600 to 700 per month after tax to get the same car as I currently drive through the company car scheme.
Cars in North America are cheap though! 2 buttons and a bag of dolly mixtures will get you a new Mustang. At 50CAD your girlfriend must have a chaffeur too! 😀
If only! Certainly, you are lured into the showroom with a cheap headline price, then all the 'extras' you can't opt out of such as various taxes, documentation, licensing and delivery fees are all slapped on as additional line items.
And don't get me started on the cost of car insurance....
(Granted, fuel is somewhat cheaper!)