What is the cheapest way to own and run a car?

Chuck Stone

I was just mulling this over in my mind and I was wondering what is the cheapest way to own a car. By cheapest I mean cheap to run, cheap to insure, cheap to tax, depreciation, repairs, tyres - everything really.

Let's say you're doing average mileage and need space for 3 passengers.

Would it be best to buy a car still within manufacturers warranty and sell it the following year?

Would it be best to buy a car 5 or 6 years old and drive it until it dies?

Or would it be best to buy an old car, say, 10+ years old and drive until it dies?

Any ideas?

dar83

Get a job that provides a company car and pays a mileage allowance.

:pac:

Chuck Stone

Chuck Stone wrote: »

.............. 10+ years old and drive until it dies?

..............

That if you buy a decent one, but you can often sell them for the guts of what you paid for them a year or two afterwards.

dar83

dar83 wrote: »

Get a job that provides a company car and pays a mileage allowance.

:pac:

Don't think they go hand in hand
Doing 20k business miles per annum in the likes of a Mondeo or Insignia would result in BIK of about €50/month though so if the company cover all private miles too and pay for getting it washed etc it's a very decent perk.

Max Power1

Q: Whats the cheapest way to own and run a car?

A: Get the bus

langdang

Buy a 2 or 3 year old Mazda 2 or a Honda Jazz or something (Yaris second hand values too strong, but would be a contender otherwise). Drive it til nearly dead, NCT it and sell it as a learner car?

Chuck Stone

langdang wrote: »

Buy a 2 or 3 year old Mazda 2 or a Honda Jazz or something (Yaris second hand values too strong, but would be a contender otherwise). Drive it til nearly dead, NCT it and sell it as a learner car?

That would increase the reliability factor but you'd lose on depreciation would you not?

unkel

Cheapest motoring is buy an old '99 or '00 or '01 1l Micra that has a long NCT and make sure it is in very good condition with new or nearly new tyres. This will set you back about €850

It will go forever with just an annual service + NCT test to worry about. Cheapest insurance and tax in the market

I would expect to get 5 years out of it before it needs serious work (so you scrap it and get another one)

So that's 850 + 5*50 (service) + 4*55 (NCT) + 5*185 (tax) + 5*250 (insurance) + 5 * 780 (fuel based on 5k miles and 45MPG) + 5 * 100 (contingency) = 7900 in total, so €130 per month

langdang wrote: »

Buy a 2 or 3 year old Mazda 2 or a Honda Jazz

That's not cheap!!! :eek:

langdang

Chuck Stone wrote: »

That would increase the reliability factor but you'd lose on depreciation would you not?

Mazda 2 looking at being about 8.5 - 9k from a dealer for a just about run in 30k km model. Easily another 10 years in one if you were to drive it nearly to death. 800 - 900 euro depreciation per year? Average Joe won't do much better than that!

langdang

unkel wrote: »

That's not cheap!!! :eek:

OK, the Jazz isn't as cheap as I though it would be. Long term for average joe, the Mazda is cheap.

OK, slightly above average joe, in that he checks the oil and coolant levels regularly and services the car once a year.

But your example of a 10 year old Micra x 2 (over the lifetime of my Mazda example) is still cheaper.
Edit, I wonder by how much, I wonder are you underestimating the price of a good micra.
I reckon if you sold the Mazda with some life in it you'd be VERY close overall...

Victor Meldrew

RoverJames wrote: »

Don't think they go hand in hand
Doing 20k business miles per annum in the likes of a Mondeo or Insignia would result in BIK of about €50/month though so if the company cover all private miles too and pay for getting it washed etc it's a very decent perk.

20K business mileage means around 28K kms gross.

24K kms / year BUSINESS mileage still has you paying 30% BIK.

So. €27K Passat => €9K at effective marginal rate of 52% => €4,680 /12 months = €390 off your salary a month...

Note, you can't claim Home to Work as business mileage, so if you are a rep, make sure your first call is near home...

dr.fuzzenstein

This:

Victor Meldrew

Victor Meldrew wrote: »

20K business mileage means around 28K kms gross.

24K kms / year BUSINESS mileage still has you paying 30% BIK.

So. €27K Passat => €9K at effective marginal rate of 52% => €4,680 /12 months = €390 off your salary a month...

Note, you can't claim Home to Work as business mileage, so if you are a rep, make sure your first call is near home...

Must check my ole payslips if I have them, was paying no where near that on a Mondeo when I was on the road (I'm sure it only cost me €50/month)
About the home to work what if your office is at home?

Chuck Stone

dr.fuzzenstein wrote: »

This:

How much did that cost you?

Victor Meldrew

RoverJames wrote: »

Must check my ole payslips if I have them, was paying no where near that on a Mondeo when I was on the road (I'm sure it only cost me €50/month)
About thehome to work what if your office is at home?

You have NO claimable mileage in that case.

Leave home/office -> drive to first customer = no business mileage

Drive from 1st customer to 2nd customer 100Kms = 100kms

rinse and repeat.

€50 a month would require lower tax bracket, many moons ago and a very high mileage....

unless the €50 was a contribution towards fuel card expenses (some do that)

.... nope, 'twas a company car in 2006 direction, higher tax bracket. Maybe my mileage was higher, (25k business miles would be 18% ?? ) 'tis a more than a few years, work were anal enough with the mileage and all that.

I can't see how a Cork to Dublin return trip couldn't be counted as business miles when my office was at home in Cork though to be honest.

blackwhite

Victor Meldrew wrote: »

You have NO claimable mileage in that case.

Leave home/office -> drive to first customer = no business mileage

Drive from 1st customer to 2nd customer 100Kms = 100kms

rinse and repeat.

€50 a month would require lower tax bracket, many moons ago and a very high mileage....

unless the €50 was a contribution towards fuel card expenses (some do that)

Incorrect. (Chartered Accountant btw)
No business milage is claimable from your home to your "normal place of work." This "first customer" malarky is myth that unfortunately even some payroll departments follow, but it has no basis whatsover in tax law.

If your home is also your office, any travel is business milage.
If your office is away from your home. Your milage to the first stop of the day is the lesser of the distance from your home to this place, or your office to this place.

This is the basis used for determining mileage in all of the "Big 4" accountancy firms as well, it has been signed off by Revenue as an acceptable basis.

blackwhite

blackwhite wrote: »

...................

If your home is also your office, any travel is business milage................

That's how my employer told me to record it at the time.

keithclancy

Depends on the scenario but if you use it infrequently then rent one.

I never pay more than 15 euros a day.

Got a Skoda Fabia from Cork Airport, 4 days, 47 euros.

I never pay more than 60 euros for 4 days car rental in Ireland.

Have the excess covered as an addon by my Travel Insurance, cost me 12 euros extra a year.

Plus you don't have the hassle of parking, tax, insurance, servicing, tyres, windscreens, damage, nct, repairs and so on.

If your driving allot of mileage the cheapest way is to buy a reliable 5 year old car with a good service history and drive it for as long as it goes while looking after it properly.

I say 'cheapest' becuase if you buy a sh1te micra you'll be paying doctors bills for the bad back and therapy for the trauma of sitting in the thing.

This cars holding value thing is a joke, being able to sell the thing is based on someone buying it and it not getting damaged by something in the period you own it

blackwhite

RoverJames wrote: »

That's how my employer told me to record it at the time.

Might want to have a word with them so (if still with them).

Legislation provides that that travelling to and from your "normal place of work" is not tax deductible. Travel to anywhere else is allowable.

I've attached the Revenue guidance on it below, relevant points:

Normal Place of Work
The “normal place of work” is the place where the employee normally performs the duties of his/her employment. In most cases, this should not give rise to difficulty.

The employer’s business premises will be regarded as the normal place of work for an employee where:

• travel is an integral part of the job involving daily appointments with customers; or
• the duties of the employment are performed at the various premises of the employer’s customers but substantive duties are also performed at the employer’s business premises.

Business Travel involving travel directly to/from home

Where an employee proceeds on a business journey directly from home to a temporary place of work (rather than commencing that business journey from his/her normal place of work) or returns home directly, the business kilometres should be calculated by reference to the lesser of -

• the distance between home and the temporary place of work; or
• the distance between the normal place of work and the temporary place of work.

blackwhite

blackwhite wrote: »

Might want to have a word with them so (if still with them).

Legislation provides that that travelling to and from your "normal place of work" is not tax deductible. Travel to anywhere else is allowable.

I've attached the Revenue guidance on it below, relevant points:

... their office was in Leinster, I was covering Munster with my home as my office. I'd say the chartered accountant above has it correct. Just had a peak at the old payslips from 2006, the notional pay on benefits was between €100 and €125 per month, was a bit higher any month I had a week or two off. So it used to cost me roughly half that after tax to have the car, €50 to €65 ish per month, must have been doing over 25k business miles/annum. Probably was when covering Munster and a bit of Leinster (Wexford and Kilkenny).


That leaflet you got that stuff from is "This leaflet covers reimbursement of Motoring/Bicycle Expenses
to employees (including directors)", not really the same as a company car BIK.

btkm8unsl0w5r4

I worked out I could take a taxi everywhere 4 times a day and it would still work out cheaper than driving my own car. You can get a serious amount of taxi's for the money we spend on our motors....

The_Honeybadger

Victor Meldrew wrote: »

20K business mileage means around 28K kms gross.

24K kms / year BUSINESS mileage still has you paying 30% BIK.

So. €27K Passat => €9K at effective marginal rate of 52% => €4,680 /12 months = €390 off your salary a month...

Note, you can't claim Home to Work as business mileage, so if you are a rep, make sure your first call is near home...

I have had a number of company cars with two different companies over the years and have never paid anything like €390 a month. Can't remember what exactly I was paying but it was certainly no more than €100 per month, probably averaged 50,000 km per year. I do remember some of the office based staff who had company cars complaining about what they were paying alright, they did virtually zero business mileage and had BMW's and Audi's under their arses for some reason, which was costing them a bomb in BIK. Haven't had a company car in a few years though so maybe something has changed.

OP not sure what the cheapest way is, but what I have done is bought a four year old car which I thought was a good deal at the time. I intend to drive it until it dies and then buy another 4-5 year old car. I could afford to change but know I'd be shafted in a trade in, you have much beter bargaining power on the forecourt without a seven year old car to trade in. I have researched how to drive for optimum fuel economy etc, and service the car on time every time. Have had to put a new timing belt in it but nothing else in three years of driving, no car loans to pay back either. Buying a ten year old + car is hit and miss IMO, and wouldn't chance it myself. There are some amazing bargains on older petrol cars at the moment however if thats what you intend to do.

blackwhite

RoverJames wrote: »

... their office was in Leinster, I was covering Munster with my home as my office. I'd say the chartered accountant above has it correct. Just had a peak at the old payslips from 2006, the notional pay on benefits was between €100 and €125 per month, was a bit higher any month I had a week or two off. So it used to cost me roughly half that after tax to have the car, €50 to €65 ish per month, must have been doing over 25k business miles/annum. Probably was when covering Munster and a bit of Leinster (Wexford and Kilkenny).


That leaflet you got that stuff from is "This leaflet covers reimbursement of Motoring/Bicycle Expenses
to employees (including directors)", not really the same as a company car BIK.

I am the chartered accountant who posted above...

Business mileage for the purpose of calculating BIK rates is defined by the legislation as being the same as business mileage allowable for tax purposes.
The attached is what Revenue has published outlining how to calculate business mileage. Same rules apply for BIK purposes, it's just that Revenue's BIK guidance doesn't specificallyrefer to what exactly business mileage is.

Victor Meldrew

mickeyk wrote: »

I have had a number of company cars with two different companies over the years and have never paid anything like €390 a month. Can't remember what exactly I was paying but it was certainly no more than €100 per month, probably averaged 50,000 km per year. I do remember some of the office based staff who had company cars complaining about what they were paying alright, they did virtually zero business mileage and had BMW's and Audi's under their arses for some reason, which was costing them a bomb in BIK. Haven't had a company car in a few years though so maybe something has changed.

It has got worse, but I paid a fortune on my Vectra as I had no business mileage. the first breakpoint is at 24,000 kms.

The Home to work rule was news to me, thought it was new? Remember that tax has seriously gone up recently , so €390 may be high. but not that high...

And, as I understand it, vans pay feck all, as long as they are real vans and not jeeps with carpet tiles in the windows...

THe Astravan I had when I was a grunt cost me nothing, especially as i was taxed exclusivly at the lower band at the time. as to the OP's point, if you don't need a third and 4th seay, THAT is the cheapest motororing.

dr.fuzzenstein

Actually the only way to do it is to be given a small van.
Had one (well, several, from a Megane to a Focus to a Transit Connect) from 2000 to 2009, including fuel card.
Initially I paid zilch, later on BIK for vans was added, worked out at a fiver a month (or thereabouts, I didn't worry about money those days).
Had it with me all the time, didn't even own a car, never submitted a single receipt and just went somewhere else every weekend. Empty tank again? Just fill her up and no worries.
Service needed? Ring the fleet management company who would arrange service at the maindealer, of course, and have a rental standing by for the day.
Never even changed a bulb in it.
Cost me BIK and the odd carwash. Less than E20 a month.
Those where the days.
I currently fork out about E5k a year to own a bloody car, makes me as sick as a small hospital.

unkel

langdang wrote: »

I wonder are you underestimating the price of a good micra.

Perhaps. But even if I underpriced it by a couple of hundred, that would only work out at €3 per month extra in total costs...

And if you are a follower of the bangernomics thread, then you'll now there are true bargains out there. You got to spot one and be ready with the cash

Even on adverts, I've seen great condition Micras go for €400. And donedeal is ever so much more dynamic

langdang wrote: »

I reckon if you sold the Mazda with some life in it you'd be VERY close overall...

How could it be close? losing 2 terms times 850 is 1700 in depreciation. Buy a 3 year old Mazda 2 for 8k, it will be worth about 1k when it is 13 years old so you've lost 7k. With all the other cost being equal (but they're probably not - does a Mazda 2 need a timing belt in the middle of its 13 year life? A Micra doesn't) the total cost per month would be about €200, that's 50% more expensive than a Micra.

You'd have a newer car, but for €300 per month you could run a nice Focus, for €400 per month a RWD BMW, etc. :pac:

OP wanted the cheapest way to own a car

@blackwhite - that's exactly the way I used to calculate mileage (although that's a good few years ago at this stage ). If you're going to a customers' site, you can only claim the distance from the office to the customers if that is shorter than from your home