Leaving a company car scheme

REFLINE1

Would appreciate thoughts on my situation. I’ve been driving a company car for 10+ years, 4 of them with my current employer. The lease on my current car (Mazda Cx5) expires soon. I have two choices, pick a car off the available list or take a car cash allowance and go my own way. If I decide to leave the scheme the only stipulation for receiving the cash allowance (10k before tax, rumoured to be increasing to 15K next yr) is that the car needs to be no older than 5 years old. I also qualify for a good mileage allowance in both scenarios. I do on average 20-22k per year total so im paying high BIK.

I’m tempted to leave the scheme as new car list is pretty limited and BIK is fairly high. The difference in take home pay if I leave the scheme and take the cash is approx. + €850/month. My plan at moment is get a PCP (contributing 10% deposit) for a new /nearly new car. I’ve started looking this week and found a 2018 A6 black edition that I really like (25,000 km). Its up for sale at 39K through Audi. Monthly payment would be about €550 (3.9%) with a GMV of close to 18K at the end of the 3 years. Insurance would be high (around 900/yr) as I’ve been on company insurance so havn’t a recent record in my own name.

Originally, I thought that I might buy an older/cheaper car and have a few quid extra every month but the 5 yr rule put a stop to that. I feel that if I stay in a car scheme for another 4 years im kind of dependant on it and would be stuck if I ever move job to a role that doesn’t offer a company car.

Thoughts? Any other options I should consider bar going PCP on a new /nearly new car? Credit union loan at 8.5% doesn’t appeal.

Shefwedfan

Ok, I was in company car scheme and left. Main question, is your name on the company car insurance? have you any no claims bonus you can bring with you?

I found it very very very hard to get insurance after I went on my own. Paid a bloody fortune and could only get insurance because I showed 9 years, yes 9 years, as a named driver on my wifes policy. That was after getting a letter saying I had no accidents while on the company car. I paid nearly 1500 as well for insurance with Blue insurance and it was more or less worthless.

The cost to maintain a car is not cheap, I used to love just rocking up to garage, dump car, pick up spare and off I go. None of that anymore. Going around trying to arrange everything and take time off work. New set of tyres as well cost a fortune. No issue with company car.

If the tax is issue why not look at 0% BIK on electric car if it would suit your needs. I am waiting for a decent selection of electric with proper range (ID.3 and Model3) and then going to probably go back onto company car. The cost to run a car these days if horribly expensive

REFLINE1

Shefwedfan wrote: »

Ok, I was in company car scheme and left. Main question, is your name on the company car insurance? have you any no claims bonus you can bring with you?

I found it very very very hard to get insurance after I went on my own. Paid a bloody fortune and could only get insurance because I showed 9 years, yes 9 years, as a named driver on my wifes policy. That was after getting a letter saying I had no accidents while on the company car. I paid nearly 1500 as well for insurance with Blue insurance and it was more or less worthless.

The cost to maintain a car is not cheap, I used to love just rocking up to garage, dump car, pick up spare and off I go. None of that anymore. Going around trying to arrange everything and take time off work. New set of tyres as well cost a fortune. No issue with company car.

If the tax is issue why not look at 0% BIK on electric car if it would suit your needs. I am waiting for a decent selection of electric with proper range (ID.3 and Model3) and then going to probably go back onto company car. The cost to run a car these days if horribly expensive

No i dont have a no claims bonus but have 10 years as named driver on wifes car. Also last yr my electric handbrake didnt stick, bumped inot an old car causing 200 quid dmage which i wanted to pay in cash but comapny insited wnet through the insurance so im not in a goodp sition to credit my copmapny car driving experience! I got a quote of 900 yesterday for the A6 based on 10 yrs named driver experience. If i ever leave the car scheme/company in future im going to have to take the hit on this type of stuff at some stage so i feel like i should just do it now and at least ive started!

Shefwedfan

REFLINE1 wrote: »

No i dont have a no claims bonus but have 10 years as named driver on wifes car. Also last yr my electric handbrake didnt stick, bumped inot an old car causing 200 quid dmage which i wanted to pay in cash but comapny insited wnet through the insurance so im not in a goodp sition to credit my copmapny car driving experience! I got a quote of 900 yesterday for the A6 based on 10 yrs named driver experience. If i ever leave the car scheme/company in future im going to have to take the hit on this type of stuff at some stage so i feel like i should just do it now and at least ive started!

As I said I left, I took the hit for 2 years and now coming out ok but it pains me with repair costs/tires andof course upgrade costs.



The depreciation on cars is huge and especailly in a market that sells a car based on Irish prices but when you go to sell back into market you are given comparisons with UK market.



If you have accident then dont use company car driving experience.


I would just add up everything. Service costs, tax,insurance, you will need a full set of tires each year with that mileage. Fuel costs as I guess you have a fuel card? then see if you are up or down.



As I said, 0% BIK is a great deal on electric. Of course it won't last long and the issue I have at the moment is the range of electric cars is poor and all due for replacement so my lease company doesn't really want to know so the monthly cost is high because they say the car will be worthless after 4 years.

REFLINE1

Shefwedfan wrote: »

As I said I left, I took the hit for 2 years and now coming out ok but it pains me with repair costs/tires andof course upgrade costs.



The depreciation on cars is huge and especailly in a market that sells a car based on Irish prices but when you go to sell back into market you are given comparisons with UK market.



If you have accident then dont use company car driving experience.


I would just add up everything. Service costs, tax,insurance, you will need a full set of tires each year with that mileage. Fuel costs as I guess you have a fuel card? then see if you are up or down.



As I said, 0% BIK is a great deal on electric. Of course it won't last long and the issue I have at the moment is the range of electric cars is poor and all due for replacement so my lease company doesn't really want to know so the monthly cost is high because they say the car will be worthless after 4 years.

i dont have a fuel card but i get a generous mileage allowance which more than covers the fuel for business and perosnal. It follows the civil service rates which are pretty sweet. Get this in both scenarios. No electrics in my company car options and if there were iwould no longer qualify for mileage which would be a negative. at moemnt i see it being close to brekaeven to leave but il be driving a nicer car and have cut ties to the reliance on company car.

colm_mcm

How much is the BIK affecting your take home pay?

REFLINE1

colm_mcm wrote: »

How much is the BIK affecting your take home pay?

I pay roughly 450 per month BIK and if i left the scheme id get an extra 400/month in car cash allowance so the total swing is approx 850 per month id take home extra out of the car scheme.

Shefwedfan

REFLINE1 wrote: »

I pay roughly 450 per month BIK and if i left the scheme id get an extra 400/month in car cash allowance so the total swing is approx 850 per month id take home extra out of the car scheme.

Any idea of an online calculator to work out how much BIK costs? this was something I never worked out myself..... :-)

REFLINE1

Shefwedfan wrote: »

Any idea of an online calculator to work out how much BIK costs? this was something I never worked out myself..... :-)

https://download.pwc.com/ie/budget-2019/income-tax-calculator.html

this will do it for you.

colm_mcm

Shefwedfan wrote: »

Any idea of an online calculator to work out how much BIK costs? this was something I never worked out myself..... :-)

Deloitte have one. Think it’s called budget calculator.

Shefwedfan

colm_mcm wrote: »

Deloitte have one. Think it’s called budget calculator.

That’s the one I used before,

Carb

REFLINE1 wrote: »

I pay roughly 450 per month BIK and if i left the scheme id get an extra 400/month in car cash allowance so the total swing is approx 850 per month id take home extra out of the car scheme.

Would you also have a net gain on the mileage allowance over the fuels cost?

REFLINE1

Carb wrote: »

REFLINE1 wrote: »

I pay roughly 450 per month BIK and if i left the scheme id get an extra 400/month in car cash allowance so the total swing is approx 850 per month id take home extra out of the car scheme.

Would you also have a net gain on the mileage allowance over the fuels cost?

Yes

Whatwicklow

Don't forget to include the depreciation, in the cost, buying a 40 car or will be ferocious.

Just gave back my company car and bought my own. I had 6 years NCB named in wifes policy and paid 666 3rd party insurance.

HappyAsLarE

Are you earning at least €120k?

If not don’t spend €40k on a car is my advice.

steinbock123

Sometimes I am amused at people bemoaning BIK. It can actually be a bargain. If it’s costing you €450 per month, think about it this way. If I paid you €450 cash into your hand every month could you :

1) Buy a new car
2) Pay road tax
3) Insure it
4) Buy all your fuel.
5) Service it on the nail (usually in a main dealer)
6) Replace all tyres when needed, whether caused by wear, punctures, blowouts or whatever.
7) Have a free replacement supplied anytime your car is incapacitated for ANY reason.
8) Have most tolls and business parking paid for.
9) Fix all those little bumps and scrapes (whether caused by you or not)that you’d have to pay for if you had your own car ( because they cost less than the excess on your policy)
10) Pay HORRENDOUS depreciation.
11) Replace with another new car usually every 3 or 4 years.

A company car comes with its own wonderful safety net don’t forget. Your own car is a great idea until something goes wrong. Then the company want you in Donegal tomorrow morning and your car’s in the garage and you’re up the creek with no paddle.

Steinbock123 speaks the truth.
What I would do if i was thinking of getting out it (im not even in!) is,
Get yourself insured as the main driver on your wife's car for a year and get a years NCB.
It won't cost as much as going all in straight away,
policy cost - wifes current policy = the cost of your 1st years NCB.
Then look at it again in a year.

Alkers

REFLINE1 wrote:

Yes

You need to work out what this will be and include it in your calculations. Without the 5 year rule it's a no brainer for me. Does a car owned by you always have to be less than 5 years old or only when you buy it? I would look to just meet this requirement.

REFLINE1

BrownFinger wrote: »

Steinbock123 speaks the truth.
What I would do if i was thinking of getting out it (im not even in!) is,
Get yourself insured as the main driver on your wife's car for a year and get a years NCB.
It won't cost as much as going all in straight away,
policy cost - wifes current policy = the cost of your 1st years NCB.
Then look at it again in a year.

unfortunately if i get a new company car im stuck with it for 4 years, cant opt out in that period.

REFLINE1

Simona1986 wrote: »

You need to work out what this will be and include it in your calculations. Without the 5 year rule it's a no brainer for me. Does a car owned by you always have to be less than 5 years old or only when you buy it? I would look to just meet this requirement.

yes i agree its a no brainer if i could buy a reliable decent saloon say 4 years old or so i could definetely come out up a couple of 100 per month i reckon. But the 5 year rule means to qualify for the allowance the car can never be older than 5 years old, so i would nned to buy a car no older than 2 yrs old car if i wanted to keep it for 3 years.

REFLINE1

steinbock123 wrote: »

Sometimes I am amused at people bemoaning BIK. It can actually be a bargain. If it’s costing you €450 per month, think about it this way. If I paid you €450 cash into your hand every month could you :

1) Buy a new car
2) Pay road tax
3) Insure it
4) Buy all your fuel.
5) Service it on the nail (usually in a main dealer)
6) Replace all tyres when needed, whether caused by wear, punctures, blowouts or whatever.
7) Have a free replacement supplied anytime your car is incapacitated for ANY reason.
8) Have most tolls and business parking paid for.
9) Fix all those little bumps and scrapes (whether caused by you or not)that you’d have to pay for if you had your own car ( because they cost less than the excess on your policy)
10) Pay HORRENDOUS depreciation.
11) Replace with another new car usually every 3 or 4 years.

A company car comes with its own wonderful safety net don’t forget. Your own car is a great idea until something goes wrong. Then the company want you in Donegal tomorrow morning and your car’s in the garage and you’re up the creek with no paddle.

yes but the difference in either scenario is 850/month to me not 450. all your list above needs to be accounted for of course but im not trying to pay for it out of 450/month/.

That said when i really do the numbers and also apply a certain value to the hassle factor of all the above im beginning to think staying in the scheme is the way to go!!

R.O.R

Based on the figures in the OP, it's touch and go whether you'd be better off going allowance over company car.

€3,900 deposit = €108.33 per month over 3 years
€550 a month finance
€75 a month insurance
€16.67 road tax (guestimate, but won't be far out)
Total = €750

Leaves you up €1,200 a year compared to the BIK spend, but out of that you've got tyres, maintenance and any other random expenses.

Benefit is that you'd be driving around in something nicer than on the company car list by the sounds of it, but drawbacks are the uncertainty as mentioned above - any breakdowns / accidents etc, you've got to sort it all out rather than making 1 phone call and leaving it all to someone else. You've also got to find the €3,900 deposit in one lump rather than the €108.33 I have in the figures above.

Casati

R.O.R wrote: »

Based on the figures in the OP, it's touch and go whether you'd be better off going allowance over company car.

€3,900 deposit = €108.33 per month over 3 years
€550 a month finance
€75 a month insurance
€16.67 road tax (guestimate, but won't be far out)
Total = €750

Leaves you up €1,200 a year compared to the BIK spend, but out of that you've got tyres, maintenance and any other random expenses.

Benefit is that you'd be driving around in something nicer than on the company car list by the sounds of it, but drawbacks are the uncertainty as mentioned above - any breakdowns / accidents etc, you've got to sort it all out rather than making 1 phone call and leaving it all to someone else. You've also got to find the €3,900 deposit in one lump rather than the €108.33 I have in the figures above.

I think that you should first compare the cost with an exact car that is on your list, eg PCP on a new Mazda CX 5 or whatever is on your list. Include tolls, car washes etc.

Also consider if your mileage can / might increase over the coming years as depreciation on higher mileage cars is killer while your BIK may drop

I’m on a similar boat and have taken the allowance but with depreciation increasing a lot versus years ago especially if your buy new, I would need to run the numbers again to see if I would be better off with a company car