company car versus allowance

R

rfpj

Guest
Hello,
I've recently been promoted at work, and part of the package provides for a company car ... Ford Mondeo I believe which costs about 30-32k or so.

My own circumstances are that we have a number of kids so we currently have an Opel Zafira only one year old; I live close enough to work that I'm happy cycling ... so we don't really have a need for this new car to sit in the driveway. Particularly with BIK applied it would make no financial sense ... instead a friend suggested that some companies are adopting policies of car allowances?

Even selling our current, i don't really want to then add X euros to the Ford to get a Galaxy (only Ford supported in the scheme) and then pay heavy BIK on this. Okay, we would get some benefit from no tax, no insurance, but ...

Does anyone have actual details that I could review and possibly suggest to my Company, rather than an expensive car (to them and to me).

I would have little or no use of the car for work purposes.

Or am i missing something ?
Thanks in advance
rfpj
 
I convinced my employer to go Car Allowance for reasons similar to your situation. I didn't want a company car. So, we worked out the total cost of ownership to the company and turned that into a Car All'ce. The company were happy to do it because 1. it was cost neutral, and 2. the company didn't have the headache of maintaining, insuring, and taxing another car. So, if you can make a proposal to the company whereby it's a win-win for both the employer and the employee, you should be able to convince them.
 
I have a car allowance now having previously had a company car (though mind you, I didn't have a choice in the matter this time round). But the allowance is far preferable. YOu can choose to spend as much or as little as you wish on your car. The real disadvantage is that you get hit with the big servicing/insurance costs from time to time.
 
Hi
thanks for the responses thus far, before I go back to my Company what aspects should be considered ...

Costs to company :-
(for argument)
30,000 for new car, to be replaced say in 3 years
1,000 for insurance and tax per year
2,500 provision for repairs per year? this is where i'm out of my depth ...
plus whatever business mileage i would put on it

So is it valid to request an Allowance of some 10k per annum with which then I would be liable for road tax, insurance, repairs for the car. I would claim mileage as incurred. Of course I would pay income tax on this 10K

to me that's a lot better than my current situation whereby I'm running a car anyway - and any contribution from my employer is welcomed ;-)

Am I missing other considerations ...

Thanks in advance
r
 
If you opt for the company car value €30k you will pay approx €3600 per year in BIK. Net pay lower by €3600

If you go for the allowance of €10k you will have approx €5,800 after tax. (assuming you are above prsi ceiling)

So in effect car allowance vs BIK option gives you €10,400 to fund the car in any given year.

Figures are approximate.
 
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