Company Car V Car Allowance

tmalmbrt

Hi Guys,

Just landed a new Job and I have the option of taking a company car or the car allowance. Now I won't be on the road much so the use of the car will be all personal.

So I hear there is a BIK hit, anyone know how big this is and if you had the chance would you take the car or the allowance

ta
T

Firewalkwithme

Well I don't know the exact numbers but my Dad has a company car and he does a lot of mileage. He gets hit very hard by the BIK and says he would prefer to have his own car and charge mileage but the company don't want him to do that.

The only thing I could suggest looking into which could really work out well for you is that (apparantly) if you get one of those 4x4 jeeps that only have front seats and the back windows are filled in like a van then the vehicle is classed as a commercial vehicle and is not subject to BIK (or maybe just not subject to as much BIK). My Dad wants to get one of these but since he doesn't have the car long, he's going to have to wait a year or two.....or crash the car

crosstownk

BIK depends on the value of the car.

I'd go for the company car option as long as it's the sort of car you like - much easier - especially if there is a maintenance contract on it. If there is you don't have to pay for any servicing/repairs/tax/tyres which means no waiting on expenses cheques. If there is a fuel card then all the better. Ultimately, it'll boil down to how much the allowance/BIK is vs what you reckon the car will cost you to run over the year.

iremex

commerical vechicles are not subject to BIK. my old place wanted to give me a jeep but planned on plastering it with advertisements, ehhh NO THANKS!

BIK's factors are value of car, milage.

i had started off with a VW Golf 1.6 and was on the 25k miles per annum bracket and was paying 180euro BIK a month.
when i got into a volvo s40 2D, again on the 25k milage bracket, i paid 380 per month..

BIK is fine if
a. car isnt overly expensive(then again make and model have factors to do with it, i.e. a honda accord's BIK was more expensive than a mercedes c180!)
b. you are going to be doing the milage.

since i have changed jobs, i have opted for the allowance. its paid into my account on the same day as my salary. PLUS because i work in the city centre i can get the Bus into work everyday (still saves the company about 400euro on monthly parking fees!!)

Mike07

BIK is ataxed at your marginal rate of tax-- so most likely 41 % + say 5% PRSI

--Bertie is doing well out of it

I take the allowance as it is significantly higher even after tax--- and pay for car loan with it--- car is mine if i leave job--

DublinWriter

Take milage if you think you'll be doing less than 4K claimable miles per annum.

A company car is really only worth it if you're doing > 8K miles on business a year as the depreciation on a heavy milage will just about offset the BIK.

Sandwich

Used to have a company car but chose to switch to allowance after looking into the costs in detail. I did little or no compnay mileage so it was purely remunerative. I think if you do high miles (30000+ miles per year) it may be different and prove advantageous.

But if the business miles are negligeable the following is how I saw it:

• You will not gain by having a company car. Assuming you would be given a new one every 3 years, it will cost you the same as if you were to take an allowance and buy a car yourself every 3 years.
  
• If you are happy not to need a new car every 3 years then you will gain, as you can decide to fund cheaper motoring by buying something second hand/cheaper and pocketing the saving.
  
• The old tax system (changed about 5 years ago AFAIR) used to enable you to make a gain, but now, if you are offered the true allowance value of a company car, then you may as well take it and have the flexibility to decide to do as you want. BTW, take care that the allowance you are offered would enable you to fund the same company car that you are declining and that its not the company who is making a saving!

Tipsy Mac

If I was you I would get a company small carvan job, all the comforts of a car but no BIK to pay. Can get yourself a Golf, Focus or Corolla van.

OldmanMondeo

Sorry to be pedantic, but there is BIK on Company Vans. I had a compnay van, small Xsara 1.9d and paid BIK. Ok it was only something like €15 per month, but that may have been donw to the fact that I paid the diesel and only claimed for company milage. The company however would take the diesel receipts and tell revenue that I covered more milage to reduce my BIK. They could also claim a percentage of the Vat on the Diesel.

If I was in the position again, I would get my own car and take the allowance. That way you get the car you want and like. Don't have to listen to the boss give out because soem clown scrapped it in a car park and if you do leave the company, your not in a position of having to rush out and buy a car.

rebel.ranter

If you are not putting in the miles for the job then the BIK is much greater, as mentioned above 30k is one of the watersheds. Look on the http://www.revenue.ie site for the details.
I personally would go for the allowance option, it shoud just about cover the type of car they were going to give you in the first place.

There are two other options with taking the allwance:

a) Buy a really cheap economical car & profit from the allowance
b) Buy a really nice more expensive car & you can fool yourself into thinking you would have to have been paying for a "normal" car anyway & the allowance is making up the difference to get the nice car!!

With some companies they give an allowance plus a fuel card. In this case I would go for the larger engined car.

Oh, there is BIK on the commercials. We had jeeps (Discos/Landcruisers) in here & it worked out at €900 per year. I know some companies skirt around this in various ways, i.e. calling the m pool vehicles etc.

galwaytt

That's right - there is BIK on vans now too. Including mileage to/from work, as they rule that you have 'free' transport to work.

Unless you're doing 30k +, forget about a co car, of any any kind.
If it's for personal use mainly, absolutely forget about it.

I've had 2, in 05 and 06. Not anymore, and never again, and I did a lot of miles. (10k in 12 weeks)

And, buying your own car and claiming a mileage, allows you to; pick what you like, new or used, big or small. Big car entitles you to higher price-per-mile.

tmalmbrt

thanks folks, looks like it allowance for me ;-)

prospect

tmalmbrt wrote:

thanks folks, looks like it allowance for me ;-)

Also,

If you are on a company insurance policy for a certain amount of time, certain insurance companies will ignore and historical NCB you had prior to that.

Sandwich

prospect wrote:

Also,

If you are on a company insurance policy for a certain amount of time, certain insurance companies will ignore and historical NCB you had prior to that.

Yes I remember that and it added about 100 or 150 to my first insurance after I reverted to a private car.

I had full private no claims bonus when I took my first company car. After 6 years of co car driving (during which no claims made either), switched back to private, and despite the perfect record, found my self paying more that the normal full NCB price just for having been insured by the company for the previous 6 years.

Most annoying. Never found out exactly why it was so but all the insurance companies I got quotes from had a similar penalty.