Company Car Allowances

[Caspar]

I've been told I'm going to get a company car allowance of £400 pm. That's nice i thought! :erm:

..it reminds me of when my brother first got his and he whinged for weeks about the taxations... :disturbd:

So, how much am I actually going to see out of this £400 and what sort of car can the money left over actually buy me? Also, how do I spend £400 on a car...do you just pop along to a show room and hope they do finance...or do I have to take a loan out buy the car outright and then use the allowance to pay off the loan? I don't like the idea of taking out a loan, then if I left work, be stuck with the loan etc... I think I'd have to buy a few year old car from a second hand dealer...but I doubt they'd offer any finance deals I, or any sane person, should take on! :Yikes:

Anyone have the low down, and/or any experience of this? :)

[Charlie_Bubble]

I pick mine from a list and get a new one every 6 or 7 months or so delivered to the office! No faffing around with visiting garages! :)

[Caspar]

Is that a company car...or financed from a car allowance..I believe these are very different.

Company cars are owned by the company, you leave your job the company keeps them, the company pays the petrol, insurance, servicing etc.... it's on the company's books an an assets etc.. To you will get taxed on the CO2 emissions, about £100pm. .depending car..

A car finanaced through a car allowance is taxed by some payment in kind tax???...but you own the car..you pay the petrol, tax, insurance, servicing...youleave the job you keep the car...and costs :(

.....

[Escapee]

I've been told I'm going to get a company car allowance of £400 pm. That's nice i thought! :erm:

..it reminds me of when my brother first got his and he whinged for weeks about the taxations... :disturbd:

So, how much am I actually going to see out of this £400 and what sort of car can the money left over actually buy me? Also, how do I spend £400 on a car...do you just pop along to a show room and hope they do finance...or do I have to take a loan out buy the car outright and then use the allowance to pay off the loan? I don't like the idea of taking out a loan, then if I left work, be stuck with the loan etc... I think I'd have to buy a few year old car from a second hand dealer...but I doubt they'd offer any finance deals I, or any sane person, should take on! :Yikes:

Anyone have the low down, and/or any experience of this? :)

As I remember from when I was given this option.

If you are getting a cash allowance, it will be treated as earnings and you will be taxed at the appropriate rate. I was offered a car with a lease cost of 500 a month or the cash, with payment to cover insurance and so many pence per mile.

I was wary about buying a car, being made redundant and ending up with the payments also, on top of that I was travelling around a lot of hotels, so thought it better for a lease car to be damaged than my own. (A few of the guys were broken inot regularly)

The 400 a month after you pay the tax doesnt go a very long way, I was just about able to order a BMW 318 lease car with the 500.

You really need to find out the latest info regarding the tax etc.

[absthechatter]

I have a company car, rather than get an allowance, but I suppose it could be similar?


Tax for me is based on list price of car and CO2 emissions - for me that is quite low - I pay about £30 per month in tax. The company leases the car (they are renewed every 3 years). If you decide what make and model you want and go to their website, many makers will lease to both companies and individuals.

I am not sure how it works if you receive the £400, perhaps it is all taxed at standard rate. If you are taxed as having car then here is a tax calculator http://www.comcar.co.uk/ Is it possible your company could lease the car for you? It would be cheaper for them and you could probably get road tax and insurance included - so better for you.

[Earl of Bronze]

I've been told I'm going to get a company car allowance of £400 pm. That's nice i thought! :erm:

..it reminds me of when my brother first got his and he whinged for weeks about the taxations... :disturbd:

So, how much am I actually going to see out of this £400 and what sort of car can the money left over actually buy me? Also, how do I spend £400 on a car...do you just pop along to a show room and hope they do finance...or do I have to take a loan out buy the car outright and then use the allowance to pay off the loan? I don't like the idea of taking out a loan, then if I left work, be stuck with the loan etc... I think I'd have to buy a few year old car from a second hand dealer...but I doubt they'd offer any finance deals I, or any sane person, should take on! :Yikes:

Anyone have the low down, and/or any experience of this? :)

The last place I worked the Supervisors got pretty much the same deal. Two of the supervisors decided to go for the Ford Focus (Turbo Desiel if I remember correctly). By the time they had payed their monthly repayment to the dealership (about £200 ish quid I believe), they had enough money left over to more than cover the tax bill incured by the allowence itself.

If you want I could make a phone call or two and see if I can get any details from my ex-supervisor.

[Escapee]

I've been told I'm going to get a company car allowance of £400 pm. That's nice i thought! :erm:

..it reminds me of when my brother first got his and he whinged for weeks about the taxations... :disturbd:

So, how much am I actually going to see out of this £400 and what sort of car can the money left over actually buy me? Also, how do I spend £400 on a car...do you just pop along to a show room and hope they do finance...or do I have to take a loan out buy the car outright and then use the allowance to pay off the loan? I don't like the idea of taking out a loan, then if I left work, be stuck with the loan etc... I think I'd have to buy a few year old car from a second hand dealer...but I doubt they'd offer any finance deals I, or any sane person, should take on! :Yikes:

Anyone have the low down, and/or any experience of this? :)

[Charlie_Bubble]

Is that a company car...or financed from a car allowance..I believe these are very different.

Company cars are owned by the company, you leave your job the company keeps them, the company pays the petrol, insurance, servicing etc.... it's on the company's books an an assets etc.. To you will get taxed on the CO2 emissions, about £100pm. .depending car..

A car finanaced through a car allowance is taxed by some payment in kind tax???...but you own the car..you pay the petrol, tax, insurance, servicing...youleave the job you keep the car...and costs :(

.....

Yeah, it's a company car. I've got an astra at the moment. Cost's me about £38 a month in tax.

[Tricky]

Depending on what your allowance is and how your scheme works you will have a number of options:
You may get £400 and have to choose your car from a company list (like I get) which could have all the cars in the world on, allowing you to contribute to a better one if you wish.
You may get £400 in your wage (usually before tax (booo!)) for you to run your own car - this gets a little technical as you can claim business mileage/expenses in two ways from the tax man (simple or exact method)

If you get the cash your options are: buy a car or lease plan.

If you lease plan and its a personal one, then consider what will happen if you change jobs and loose the benefit

[Caspar]

Depending on what your allowance is and how your scheme works you will have a number of options:
You may get £400 and have to choose your car from a company list (like I get) which could have all the cars in the world on, allowing you to contribute to a better one if you wish.
Depending on what your allowance is and how your scheme works you will have a number of options:
You may get £400 and have to choose your car from a company list (like I get) which could have all the cars in the world on, allowing you to contribute to a better one if you wish.

I doubt it'll be a list :(

You may get £400 in your wage (usually before tax (booo!)) for you to run your own car - this gets a little technical as you can claim business mileage/expenses in two ways from the tax man (simple or exact method)
I can claim mileage, nice!...isn't it!? :erm: What are these two methods?

If you get the cash your options are: buy a car or lease plan.
Are there pros and cons of each? Which is better?

If you lease plan and its a personal one, then consider what will happen if you change jobs and loose the benefitHow do I choose a personal plan very a company plan? I thought since the money was being financed from the company then I would get a company leased plan. I hope this cause there's a big jump in cost if I have to take a personal plan out :(

[etccarmageddon]

if you lease a car the benefit is that a lot of the costs and worry are out of your hands but the downside is you dont own it. I think some lease deals include tyres etc but have milage penalties etc. often you get a good deal on leasing because the lease companies get HUGE discounts from buying in bulk from companies like Ford. So when you find an amazing deal where you get a new bmw for £200 a month or whatever - that's cos they are passing on a great deal to you or cos there's small print!

Also often they dump the lease cars after a year or whatever on wholesale sellers like virgin cars. You might be able to get a good deal there on buying en ex lease car - personally I went there a few months back and thought it was crap. If you lease a car you are tied to a deal for 3 years or whatever - if you lose you job during that time then you are stuck with a lease.

We ended up at quicks in alty to buy a ford and haggled about 10% off the price - note that they tried to sell us a finance deal which they said would give us an extra £500ish off the price - they refused to answer my question of 'whats the APR' which is probably illegal!

So your £400 is cash on your wage slip I assume? is this a payment cos they are in love with your work or is it cos they expect you to make trips on company business?

With regards to tax - it will be taxes as normal wages if it's on your wage slip. So expect to loose around 1/3 of it - so you end up with £260ish .
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oh and another thing, always turn down offers like service insurance etc - after you turn it down they drop the price again and again!