company car versus cash allowance

v240gltse

hi ,

just wondering ,whats the better options wrt to

1. getting a company car ( 40k euro ) + petrol card

2. getting a 1000euro monthly allowance and 35c per km .

the only snag is that my mileage would be low per year eg less than 15k,

tia

Lex Luthor

Definitely Option 2.

If you go for the co. car, then you are paying BIK on 30% of 40k plus BIK on the petrol card

Cash allowance, even though its taxed and PRSI'd is worth about €520/month in the hand plus 35c each km which is decent

Plus you get the chance to buy a car of your choice

Ferris

Take the opportunity to buy a good 2nd hand luxury car. You're talkin a good 07/08 5**d for 40k and let your allowance pay for the depretiaton.

Nice position to be in:D

return guide

Ferris wrote: »

Take the opportunity to buy a good 2nd hand luxury car. You're talkin a good 07/08 5**d for 40k and let your allowance pay for the depretiaton.

Nice position to be in:D

Its option 1 or 2 not 1 and 2.

I had this choice as well. I opted for the company car. I just put tyres on it for € 400, that would take up a sizeable chunk of your allowance once a year.

Petrol card is included in the 30% bik as are all other business related expenses, insurance tax etc.

hope this helps.

Bulmers

i was in same situation 6 months ago, took the allowance as i dont do many company miles so would have been full 30% BIK, works out better for me with allowance, although my car has seriously depreciated, but you'd be a cash buyer so good time to buy a motor, car allowance for me

Tony Broke

If you want to make a little bit of money, option 2

If you want no hassle and fun driving 1.

You get to pick the car in option 1?

Go dsg if you do.

draycottgirlz

depends on a few things:
do you have a car reliable enough for work?
are you into cars?
will it mean much driving?
long term work contract?

Ferris

return guide wrote: »

Its option 1 or 2 not 1 and 2.

Realise that, just pointing out that the op could buy a way nicer 2nd hand car than the passat/mondeo/motoring mud etc car he would probably be lumbered with as a company car for the same money if not a lot less. Personally I would finance the car if I went with option 2 and use the allowance to repay the loan.

bf

The answer to this question could be very different tomorrow when the new C02 based BIK scheme is announced for company cars, if it mirrors the road tax system you could potentially be only payin 16% VRT on a lot of BMWs etc....

Lex Luthor

bf wrote: »

The answer to this question could be very different tomorrow when the new C02 based BIK scheme is announced for company cars, if it mirrors the road tax system you could potentially be only payin 16% VRT on a lot of BMWs etc....

really...didn't know that....things could change then

R.O.R

bf wrote: »

The answer to this question could be very different tomorrow when the new C02 based BIK scheme is announced for company cars, if it mirrors the road tax system you could potentially be only payin 16% VRT on a lot of BMWs etc....

Will be interesting to see what happens tomorrow - hopefully it won't be a further kick in the teeth to the company car business.

Based on current figures it looks like the OP is going to be better off on the allowance (much as it pains me to say ). When weighing up the pro's and con's you need to make sure you count all the things you'd have to pay for yourself if you take the allowance. I've attached a spreadsheet I've used in the past, with everything I can think of included to work out what's best off to you. Obviously a lot of the figures are guesses on my part (coloured Green. If you update them the figures should update to give a truer reflection on costs.

I think I've overestimated at a complete set of tyres every year, but it gives an idea.

v240gltse

hi all

thanks for all your replies. Yes I have a reliable car and would be quiet handing a car work myself so that would help to keep the maintenance costs low.

thanks ROR for the spreadsheet I will look at it now. I suppose tomorrows decision on the co2 BIK may well colour my view as I'am looking at a Skoda Octavia vrs for a company car if I go that route.

once again thanks to all.

Heroditas

Definitely go for option 2.
Option 1 means you could be taking home €300 less per month due to BIK.
On the other hand, the allowance means you have €520 approx extra a month - a swing of over €800 per month - nearly €10k a year to use on a very nice car!

Your mileage allowance is very good too. It will definitely cover fuel costs and you might even get it to stretch to pay off your insurance and road tax.
The only downside of option 2 is you have to pay for servicing/repairs yourself.
I'd still go for option 2 - you will OWN the car and that is the clincher for me.

return guide

R.O.R wrote: »

Will be interesting to see what happens tomorrow - hopefully it won't be a further kick in the teeth to the company car business.

Based on current figures it looks like the OP is going to be better off on the allowance (much as it pains me to say ). When weighing up the pro's and con's you need to make sure you count all the things you'd have to pay for yourself if you take the allowance. I've attached a spreadsheet I've used in the past, with everything I can think of included to work out what's best off to you. Obviously a lot of the figures are guesses on my part (coloured Green. If you update them the figures should update to give a truer reflection on costs.

I think I've overestimated at a complete set of tyres every year, but it gives an idea.

I am playing devils advocate here.

What if you want a car that will cost over € 300 a month, which is less than 15k over 4 years ( the average lease for a company car ) 500 a month wont buy you a new focus. ( a lot but not all companies paying a decent mileage want their employees/ representitives in respectable cars ).

Also consider deprecation, another thread on Boards discusses how the poster is used to lossing 4k a year on his/her Honda civic, but this year it is 6.5 k. At 4k a year and the increased repayments adds €2800 a year to be deducted from your allowance.

The point of BIK is not to penalise the user but to render the benefit (car in this instance), neutral.

It is also important to remember that on one hand you are getting an all expenses paid new car that you will never own and on the other you are getting a car of your choice that you will have paid dearly for through depreciation, wear and tear etc, but is your to sell at any time.

Just my opinion, hope i dont offend anybody

R.O.R

bf wrote: »

The answer to this question could be very different tomorrow when the new C02 based BIK scheme is announced for company cars, if it mirrors the road tax system you could potentially be only payin 16% VRT on a lot of BMWs etc....

The announcement has been made.

Nothing is going down. If your new car emits 155 g/km or under then you stay the same.

If your new car emits 156 to 190 it goes up between 5% on the lowest mileage and 1% on the highest mileage

If your new car emits over 190 you are screwed. 10% on the lowest mileage and 2% on the highest.

Full details on page 34 of http://www.rte.ie/news/2008/1120/financebill.pdf

As far as I can figure out it only applies to new cars supplied 2009 but I haven't had time to study it all yet.