€450 a month car allowance - what to get?

Johnny_Fontane

So I have approval to spend €450 a month on a car. Perk of the business.

Can get a car second hand from a garage or new (lease)

Currently drive an Audi A4 (2003) Saloon. 2 kids under 4, looking at large cars, estates and the like. My own car is probably only worth 2k.

Any suggestions for options?

Anan1

Does that include running costs? Whose name would be on the contract? Does the €450 have to be spent on the car?

corkgsxr

What sort of milage?

I always had a fancy for a 530d

Johnny_Fontane

not much, about 10,000 miles a year

not including running costs.

I would like to have a diesel and not pay much car tax. probably something 2009 onwards, but am open.

Anan1

Johnny_Fontane wrote: »

not much, about 10,000 miles a year

not including running costs.

I would like to have a diesel and not pay much car tax. probably something 2009 onwards, but am open.

If this is a simple car allowance then I wouldn't tie myself to spending the €450 on repayments. You can spend less (or more), depending on your own needs/wants.

Drummerboy08

Wont lease a whole lot for that budget either.

Cleveland Hot Pocket

You could pick up an e60 530d for about 4-5k, using the 450 per month as credit union loan repayments. It would be paid back in about 14 months then you have a nice powerful economical motor for free!

Johnny_Fontane

I'm not looking for a new €45k car. Looked at second hand skoda yetis, maybe an avensis or something.

I've never leased before, so dont know what to expect from that. Would that fact that my current car is worth so little mean that leasing is out of the question?

I see you can get a new skoda yeti for €249 a month.....http://www.skoda.ie/finance/documents/pcp_finance.pdf

Anan1

Johnny_Fontane wrote: »

I see you can get a new skoda yeti for €249 a month.....http://www.skoda.ie/finance/documents/pcp_finance.pdf

... plus €7500 up front and nothing to show at the end of three years.

Johnny_Fontane

Anan1 wrote: »

... plus €7500 up front and nothing to show at the end of three years.

this is true.

So that rules out the idea of a new car (not that I was really that keen on the idea).

What about hire purchase?

Cleveland Hot Pocket

Johnny_Fontane wrote: »

this is true.

So that rules out the idea of a new car (not that I was really that keen on the idea).

What about hire purchase?

HP works in a similar way, you need a deposit

I reckon buying something in the lines of an e60 like I said earlier is the way to go.
Then once you have repaid the cost of the car, use the 450 p/m for tax and fuel

discombobulate

So do you get the €450 regardless of what car you buy? i.e. Could you just keep the money if you want?

The Skoda Yeti is an awful looking thing.

Johnny_Fontane

no it would need to be all on the car. I have up to €450 a month to spend, I'm a Director of the company, so its going through the company.

I will look at some BMW's so....as long as the Tax is low and its Diesel I'm keen.

corkgsxr

Johnny_Fontane wrote: »

no it would need to be all on the car. I have up to €450 a month to spend, I'm a Director of the company, so its going through the company.

I will look at some BMW's so....as long as the Tax is low and its Diesel I'm keen.

Gwan 530d

Isnt the new one a serious spec

245 hp. 398 torques. 45 mpg. Tax is low.

Enjoy life. Have something that looks nice and goes nicely

Johnny_Fontane

not sure I will be able to find one though......if anyone has seen one in a garage or online for less than €20k.....let me know.

jimgoose

530s is a serious bitta kit. But if I were you with that budget a 3.0d Jaguar XF would also interest me.

Drummerboy08

Anan1 wrote: »

... plus €7500 up front and nothing to show at the end of three years.

The deposit is the stumbling block here.

I wouldnt be too sorried about not having anything to show for it though, I dont get this fascination irish people have with owning an item that depreciates alot.

You pay for the use of the car for x number of years, hand it back and start again.

Anyhow.

If the OP is looking at the likes of a Yeti or Avensis then a 530d is hardly the logical choice is it?

Why not take a company car instead?

Anan1

Drummerboy08 wrote: »

The deposit is the stumbling block here.

I wouldnt be too sorried about not having anything to show for it though, I dont get this fascination irish people have with owning an item that depreciates alot.

You pay for the use of the car for x number of years, hand it back and start again.

I meant nothing to show for the €7500 up front. Those ads are designed to lure unwary souls like the OP with a low monthly payment when the real cost is far higher. You're right though - there's nothing intrinsically wrong with leasing.

Anan1

Anan1 wrote: »

If this is a simple car allowance then I wouldn't tie myself to spending the €450 on repayments. You can spend less (or more), depending on your own needs/wants.

He might as well spend the full 450 on a car if he isn't going to be given the money if its not used on a car.

Anan1

Enoch Itchy Ceremony wrote: »

He might as well spend the full 450 on a car if he isn't going to be given the money if its not used on a car.

That's why I said 'if'.

Bpmull

Anan1 wrote: »

I meant nothing to show for the €7500 up front. Those ads are designed to lure unwary souls like the OP with a low monthly payment when the real cost is far higher. You're right though - there's nothing intrinsically wrong with leasing.

I'd agree with you my grand parents bought a new skoda this year and the garage salesman was trying to lure them into the Pcp 3 year scheme and it nearly worked until my mother actually worked out the figures and it costs vastly more 1000s than just getting a loan with vw bank which is 3 percent odd. The reason garages are pushing it is there making more out of it. Pcp will never be cheaper than just getting a loan the reason people are attracted to it is the low monthly repayments and in a lot of cases low deposits which mean very little considering you own nothing after 3 years unless you pay a big final repayment. It just never adds up when you put figures on it but then there's people who never work out the actual cost past the monthly repayment. And skoda are doing 1.99% loans from January not sure how much of a deposit you have to give though.

R.O.R

Drummerboy08 wrote: »

Wont lease a whole lot for that budget either.

Might just squeeze a 316d ES in non-mettalic, for €450 (ex. VAT) per month.

4 Year Lease, 3 upfront payments followed by 45 monthly payments, and no maintenance/tax/tyres/breakdown/replacement car. Max allowed mileage of 64,000km.

discombobulate

Johnny_Fontane wrote: »

I will look at some BMW's so....as long as the Tax is low and its Diesel I'm keen.

Do you need a Diesel? Your only doing 10k miles. What kind of driving is that 10k? Is it mainly short runs, city driving or longish?

Tax and fuel might be cheaper for a Diesel but you may run into issues if its not whats required for the driving you do. Also bear in mind that a petrol would generally be cheaper to buy and maintain.

Re: the 2 cars you've mentioned a Yeti and an Avensis. They'd be a bit on the boring / ugly side for most posters here. An Accord may be another decent option or the new Mazda 6.

Drummerboy08

R.O.R wrote: »

Might just squeeze a 316d ES in non-mettalic, for €450 (ex. VAT) per month.

4 Year Lease, 3 upfront payments followed by 45 monthly payments, and no maintenance/tax/tyres/breakdown/replacement car. Max allowed mileage of 64,000km.

Yep, and excluding VAT isnt much good to an individual.....

copacetic

Anan1 wrote: »

... plus €7500 up front and nothing to show at the end of three years.

Is it not the whole point of the deal that you still have value in the car? i.e they want you to go again so GMFV is quiet low.

In the example, rounding the figures, a 25k yeti wit 7.5 deposit has a GMFV of 10k after 3 years. So you can either hand it back, or more reasonably sell it yourself for about 13k or trade it toward a new skoda presumably with a bit more value given, maybe 4k toward a new one? I.e it's the deposit for the next time.

Having said that, it doesn't make sense if losing cash, I.e deposit you pay now should equal deposit expected to have at the end. Otherwise you can't afford it.

Tea 1000

copacetic wrote: »

Is it not the whole point of the deal that you still have value in the car? i.e they want you to go again so GMFV is quiet low.

In the example, rounding the figures, a 25k yeti wit 7.5 deposit has a GMFV of 10k after 3 years. So you can either hand it back, or more reasonably sell it yourself for about 13k or trade it toward a new skoda presumably with a bit more value given, maybe 4k toward a new one? I.e it's the deposit for the next time.

Having said that, it doesn't make sense if losing cash, I.e deposit you pay now should equal deposit expected to have at the end. Otherwise you can't afford it.

I think thats the point they're trying to make. You can't sell it yourself, you have to hand it back. The 7500 deposit and 3 years of monthly 249 payments only get you the use of it. After those 3 years you have 2 options. Hand the car back and walk home or give them more money to keep the car.

copacetic

Tea 1000 wrote: »

I think thats the point they're trying to make. You can't sell it yourself, you have to hand it back. The 7500 deposit and 3 years of monthly 249 payments only get you the use of it. After those 3 years you have 2 options. Hand the car back and walk home or give them more money to keep the car.

Of course you can sell it yourself. You give them 10k and you have a car worth 13k or so that you sell yourself? Leaving you 3k or so up? Not a great deal, but an option.

lomb

Drummerboy08 wrote: »

Wont lease a whole lot for that budget either.

Meanwhile across the border... http://www.nationwidevehiclecontracts.co.uk/Audi_A4_Saloon-18T_FSI_SE_Technik-47420.htm
Get a new car every 2 years for this cost.
A new A4 for 281stg with 2k down all including vat!

mickdw

copacetic wrote: »

...deposit you pay now should equal deposit expected to have at the end. Otherwise you can't afford it.

THIS ^ should be in large print on every one of those deals. That is the basics of it. Its a perfectly acceptable way of buying a car if as you say, you can go in and afford another one in 3 years based on the deposit you have built up in the last car.
Too many going in with trade ins worth maybe 15k. Driving out in a new Audi with a small monthly payment but in 3 years time, when they suddenly only have maybe 4k to put forward based on value of car, they wont be able to get into another one.

ofcork

copacetic wrote: »

Of course you can sell it yourself. You give them 10k and you have a car worth 13k or so that you sell yourself? Leaving you 3k or so up? Not a great deal, but an option.

You cant sell it yourself as you don't own it,3 options are 1 hand it back,2 pay whats owed and its yours or 3 trade it for a new one.

cabb8ge

Johnny_Fontane wrote: »

no it would need to be all on the car. I have up to €450 a month to spend, I'm a Director of the company, so its going through the company.

I will look at some BMW's so....as long as the Tax is low and its Diesel I'm keen.

Drummerboy08 wrote: »

Yep, and excluding VAT isnt much good to an individual.....

It appear lease will be by company not individual.

mickdw

ofcork wrote: »

You cant sell it yourself as you don't own it,3 options are 1 hand it back,2 pay whats owed and its yours or 3 trade it for a new one.

What he is saying is that you would avail of option 2 then sell it. This is a real option for many and is your only guarantee against the dealer offering a very poor value if hoping to go again for a new model.

air

What's a car allowance anyway? Is it not just an additional payment subject to PAYE as normal?

glic71rods46t0

air wrote: »

What's a car allowance anyway? Is it not just an additional payment subject to PAYE as normal?

OP said the payments would be going thorugh the company so I presume the lease payment will go down as a business expense. There will, however, be a BIK implication for teh OP using a company vehicle for private use.
Company cars only make sense when fully expensed (insurance, tax, servicing and FUEL) and all liability of ownership stays with the company - the BIK is worth it such circumstances but not when you have to pay to run the car yourself - its hard to see how the maths makes it worthwhile

r4p8ki71aemvuc

r4p8ki71aemvuc wrote: »

but not when you have to pay to run the car yourself - its hard to see how the maths makes it worthwhile

Of course it's worthwhile, you would be mad not to take up such an offer, I'd actually prefer it to a company car as you can choose the car you want yourself.

You are working out much better getting 450 euro and paying BIK on it than not getting the 450 euro at all.

air

Enoch Itchy Ceremony wrote: »

Of course it's worthwhile, you would be mad not to take up such an offer, I'd actually prefer it to a company car as you can choose the car you want yourself.

You are working out much better getting 450 euro and paying BIK on it than not getting the 450 euro at all.

It would depend on the amount of driving you do.
If you rack up a lot of kilometres the BIK rate reduces and you'd be better off vs just getting a cash topup if running the same car.

Of course if you can get a cash top up and run an economical car you'd be better off again but you'll be paying PAYE on this and not BIK AFAIK.

air

air wrote: »

It would depend on the amount of driving you do.
If you rack up a lot of kilometres the BIK rate reduces and you'd be better off vs just getting a cash topup if running the same car.

Of course if you can get a cash top up and run an economical car you'd be better off again but you'll be paying PAYE on this and not BIK AFAIK.

The OP has stated that he wont get the money unless he buys a car so there is no cash top up.

In any case a cash top up and the top rate of BIK will incur the same tax so rate so it makes no difference.

I'm assuming he doesnt need the car for work as I know a number of people who get car allowances and its a perk, they don't drive for work at all, people I know who actually drive for work are given a company car.

air

I agree with what you're saying nox, I'm just saying if you're going to drive a newish car for work (say a new Mondeo) then getting a company car may work out better if you do a high number of kilometres for work as the BIK reduces the more driving you do.

Strange that he has to buy a car to get the top up if he's a director.

glic71rods46t0

Enoch Itchy Ceremony wrote: »

Of course it's worthwhile, you would be mad not to take up such an offer, I'd actually prefer it to a company car as you can choose the car you want yourself.

You are working out much better getting 450 euro and paying BIK on it than not getting the 450 euro at all.

If you read the Op's various posts it suggests that the OP's company will pay a lease on a car for his benefit up to €450 per month. OP has to provide the fuel, tax, insurance maintenance on the car - I am assuming OP is liable for any repairs required on the also i.e. all the liabilities of ownership apart from teh lease payment.
Then the taxman looks for BIK on the use of the car NOT by reference to the €450 per month but on a notional 30% of the Open Market Value (OMV) of the the car when NEW:eek:.
So OP goes for a nice 520D with an OMV when new of €45,000. BIK is calculated at 30% X €45,000 = €13,500 notional pay.
So OP gets to pay PAYE/PRSI on €13,500 . It could end up being more than the €450 per month that the company is paying - and the OP pays his own fuel, insurance, tax etc - that ends up as a mugs game!

r4p8ki71aemvuc

r4p8ki71aemvuc wrote: »

If you read the Op's various posts it suggests that the OP's company will pay a lease on a car for his benefit up to €450 per month. OP has to provide the fuel, tax, insurance maintenance on the car - I am assuming OP is liable for any repairs required on the also i.e. all the liabilities of ownership apart from teh lease payment.
Then the taxman looks for BIK on the use of the car NOT by reference to the €450 per month but on a notional 30% of the Open Market Value (OMV) of the the car when NEW:eek:.
So OP goes for a nice 520D with an OMV when new of €45,000. BIK is calculated at 30% X €45,000 = €13,500 notional pay.
So OP gets to pay PAYE/PRSI on €13,500 . It could end up being more than the €450 per month that the company is paying - and the OP pays his own fuel, insurance, tax etc - that ends up as a mugs game!

The people I know with a car allowance are paying a rate of 41% on the amount in the car allowance. So in the op's case they are paying 41% of 450 euro, for sure no way one of them would be driving the car they are if it was calculated your way as they do 0 work miles and the car is expensive. Insurance, maintenance and tax is up to them. Fuel is a fuel card which they have to pay 41% BIK on what ever they spend

glic71rods46t0

Enoch Itchy Ceremony wrote: »

The people I know with a car allowance are paying a rate of 41% on the amount in the car allowance. So in the op's case they are paying 41% of 450 euro. Insurance, maintenance and tax is up to them. Fuel is a fuel card which they have to pay 41% BIK on what ever they spend

Except when you read what the OP said:

Johnny_Fontane wrote: »

no it would need to be all on the car. I have up to €450 a month to spend, I'm a Director of the company, so its going through the company.

I will look at some BMW's so....as long as the Tax is low and its Diesel I'm keen.

I am trying to address the actual circumstances of the OP and hopefully persuade him not to make a big mistake of thinking that he will just pay BIK on €450 per month.
You are simply giving misleading advice based on the actual circumstances outlined by the OP rather than what you think should be the case here. Please stop!