Company car vs an allowance

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polo1

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Guys
I did a search but latest thread was 2008 so decided to open a new one seeing as things have probably changed since then.
Am thinking of changing jobs.. I have a company car (diesel 30K band)at the moment which is all expenses paid.. (anything goes wrong its paid for etc) I dont do a huge amount of mileage for work (mostly 2 and from airport)- think there is 50K KM on car and its 2.5 years old..
The new company is offering me 10,400 allowance instead of an actual car.. Just wondering will I be better off taking this. Want to make sure I am making the right decision (total package etc).
Will the new company then be oblilged to pay for mileage in the new car if its work related or is this considered in the 10,400?
Is it likely that my insurance premium will be very high as I have been insured under company insurance for the past 6 years?
Thanks for your advice.
 
I'd be pretty certain that your mileage would be considered as part of the 10,400. I use my own car for work and claim private mileage. A few years ago it could be considered a perk, but with diesel/petrol prices constantly rising, 2nd hand cars not achieving the same value they did pre-recession, costs of servicing, upkeep tax and insurance, I'd jump at the chance of a company car.
 
I get car allowance and claim mileage at civil service rates on top (helps pay for the upkeep of the car!). There are pros and cons both ways. BIK will be paid on the company car, and I know for me I think it worked out better to be having the cash allowance. Do you want to have a fully maintained car and not deal with the hassle of having to tax/insure/replace if an accident but pay for the privilege?
 
Thanks both. I don't have the option of a car in the new job but wondered whether I would much worse off with just getting the allowance...
What do you mean when you say that you claim mileage are civil service rates to cover costs please?
Thanks
 
I opted for the car allowance when it was an option for me. €12k a year but treated as income and I get 27c/km
Have to pay my own tax/insurance/servicing but get to choose my own car which is better than the boggo spec 316i or Passat that was available to me at the time and now its just all Opels
 
A lot depends on what money you would spend on a car.You need to decide on that first and then work out estimates for the following:

fuel/tax/insurance/service/tyres/some allowance for extra costs/interest on the money borrowed to buy new car or the interest lost if you use your savings.

Assuming you are paying full BIK at the moment as business mileage is low, you are taxed on 9000 for BIK.
With the allowance you will be taxed on 10400.
So extra tax/prsi/usc is approx 1400x 52% = 728.( assuming you pay tax at 41%).

So net extra cash if you take the allowance is 10400-728= 9672. Can you cover the running costs above plus the annual depreciation with this ?

If you can then financially you are better off. But it depends on what you buy. One option may be to buy out your current car from employer or lease company - you may get a good deal and you have a car you know.

For the insurance, approach the brokers of your current employer and they may be able to get some no claims discount for you.
 
polo1 said:
Thanks both. I don't have the option of a car in the new job but wondered whether I would much worse off with just getting the allowance...
What do you mean when you say that you claim mileage are civil service rates to cover costs please?
Thanks
Click to expand...

I get 59c per km for the first 6437km I do, and then 29c for every km after. The Passat I have is very economical, giving 1100 - 1300km per tank. This is not taxable income, but comes through on my expenses.


I like having the freedom to choose my car, and am pretty sensible with running costs,making sure I factor all these in, with my mileage paying for all this.
 
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