Average cost of leasing an average car?

milltown

I know we have a few regulars in here involved in leasing and fleet management who should be able to advise:

If somebody has a company car, provided by a leasing company, and wants to make a case for providing their own car and taking a car allowance, it seems fair to me that the allowance should be roughly equal to the cost to the company of leasing the car. Is this correct, or are there other factors to be considered?

Note I said "cost to the company", meaning the charge from the lease co. less any VAT or other taxes that can be reclaimed. It shouldn't make any odds to the company whether they pay €X.xx per month to Leaseplan or to the employee, right?

Now my question is, roughly what would be the monthly cost of leasing an average repmobile like a Passat or Mondeo? Do many variables come into play? As far as I know, the company policy is to replace the cars every three years although the "current climate" excuse could be ripe for making it four years.

Thanks in advance!

R.O.R

milltown wrote: »

I know we have a few regulars in here involved in leasing and fleet management who should be able to advise:

If somebody has a company car, provided by a leasing company, and wants to make a case for providing their own car and taking a car allowance, it seems fair to me that the allowance should be roughly equal to the cost to the company of leasing the car. Is this correct, or are there other factors to be considered?

Note I said "cost to the company", meaning the charge from the lease co. less any VAT or other taxes that can be reclaimed. It shouldn't make any odds to the company whether they pay €X.xx per month to Leaseplan or to the employee, right?

Now my question is, roughly what would be the monthly cost of leasing an average repmobile like a Passat or Mondeo? Do many variables come into play? As far as I know, the company policy is to replace the cars every three years although the "current climate" excuse could be ripe for making it four years.

Thanks in advance!

Only just seen this - been on a tour of the city this morning, collecting, delivering, dropping etc.

The major variables in leasing are the term and mileage. I've run approx. figures over 3 years / 120,000km and a Mondeo Zetec 1.8Tdci or a Passat Comfortline 2.0Tdi 110bhp would cost around €750 per month inlcuding maintenance and non-reclaimable VAT. Higher mileage costs more, lower mileage costs less.

I'm not sure if there are other considerations for a company to look at when deciding a car allowance. Some companies will try to get drivers in to Company Cars, some will try to get them out of Company Cars and on to an Allowance. The one thing that doesn't change is the Employers corporate responsiblity towards a driver whether they are in a Company Car, or a personal car on company business. It's usally easier for companies to ensure they do everything possible to ensure the safety of their drivers if they are in Company Cars, but of course I'm going to say that

BigZack

Getting cash in lieu of a car from an employer can be much harder than you think. First off, it will be treated as salary and subject to PAYE. The employer will also have to cough up 10.75% employer's PRSI on the amount they're giving you. Depending on how they fund their company cars (Purchased outright means they can claim capital allowances whereas contract hire allows them to put their fleet off the balance sheet) they won't get any benefit from giving you the cash.

Better off to try and work out a reasonable mileage reimbursement scheme. Provided you do a reasonable amount of mileage annually you can claim back at the Civil Service Motor Travel Rates.

I used to develop ECOS (Employee Car Ownership Schemes) for employers but to be honest Irish employers are not as keen as UK. Good luck though!

Damien360

BigZack wrote: »

Getting cash in lieu of a car from an employer can be much harder than you think. First off, it will be treated as salary and subject to PAYE. The employer will also have to cough up 10.75% employer's PRSI on the amount they're giving you. Depending on how they fund their company cars (Purchased outright means they can claim capital allowances whereas contract hire allows them to put their fleet off the balance sheet) they won't get any benefit from giving you the cash.

Better off to try and work out a reasonable mileage reimbursement scheme. Provided you do a reasonable amount of mileage annually you can claim back at the Civil Service Motor Travel Rates.

I used to develop ECOS (Employee Car Ownership Schemes) for employers but to be honest Irish employers are not as keen as UK. Good luck though!

Talking to other reps on the road it is very rare for any private employer to pay civil service rates. Bank staff seem to be the exception. You are not liable for any tax on this as payment as long as you do not exceed civil service rates.

I ran my own car in 05 for a year and it cost approx 50c a mile to run the car doing 30000miles including tax, insurance, tyres, fuel (much cheaper then), servicing and cost if finance on a 22500 loan for a 04 mondeo diesel (buying cash so you get a better deal). That figure does not include any resale value you get on getting rid of it but you cannot look at that at all until you actually get rid of it.

If your company owned it they would be able to claim vat back on fuel, tyres and servicing. When they resale for a value same as depriciation value they are not liable to tax on that (someone confirm but I am pretty sure). They may not be servicing a loan and therefore final cost per mile will be lower. No company will give you an amount above their costs and you have to pitch an argument of less hassle for them but their cashflow out increases considerably (which is why my scheme was stopped after a year).

You could try pitch an idea of them leasing a car for you. Cash out flow will may be very similar but less hassle for them and you. It also may be better if your employer is the suspicious type, even when that is completly misplaced. Your only argument would be falling value of cars and their savings by not having to resale on a collapsed car value therefore leasing would be better. Beware of counter argument of purchasing a really cheap car to offset this.

The cost of the lease will very much depend on the mileage you put on the car. They charge very high costs when you do mileage over 10000 a year to recoup their resale value loss.

In short, get your company to lease for you and then you are kept out of the financing cost which can be a worry depending on the type of character you are. My company pays expenses 6 weeks after they are incurred so you should factor that in to your consideration also if they delay. If they are short in cash flow you can expect a delay. As they say, sh*t rolls down a hill !

Good luck

Drummerboy08

One bit of advice, and for anyone, not just the OP. IMO, if you are given the option of a company car and a car allowance, take the car FFS! You do not need to worry about any problems with the car, your tax or insurance, and even the finance on the car. Fair enough, you do lose your NCB, and you will pay BIK, but these costs are worth it.

Back OT, ROR hit it on the head. A C/line Passat could cost anywhere between 650-750 inc Maintenance and VAT. For the person who is considering a car allowance, add on a few quid for your insurance, and a little extra just in case.