It's new car time for my other half. Currently has company car (MGF - awful car but that's another story). Can now only get either focus or mondeo diesel as traditional company car, otherwise can take a PCP for any car and get given around £500/month extra to fund this.
Other option is to take money and buy own car but then would have to look after servicing/breakdown/insurance etc herself.
She's unsure what to go for and with these PCP schemes becoming more common I wonder what other company car owners have done
All advice appreciated.
Andy.
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Just watch out for the mileage adjustment, and refurb costs on a PCP.
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Sorry but too complex to do the calculations, start by using a 'cash or car' calculator such as
tiscali.cashorcar.co.uk/
This will give you an idea of what you can get. However most big company schemes only enable you to profit if you are willing to drop to a lower priced car.
Personally I bought my new car with a loan and will run it for 4 years (about 100,000 miles) then buy a new one. I wouldn't have a PCP scheme.
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I've not done the sums for a while, but she should be able to do better than a Mondeo diesel for £500 pcm.
With a PCP you need to be careful about excess milage and that you sort out any damage before returning the car.
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Thanks for replies so far. Another option of course is to take the money and buy secind hand such that someone else takes the hit for most of the depreciation. Trouble is persuading a girl used to new company cars that this is the way to go!
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I opted out, an accountant advised I took the full mileage allowance allowable on the inland revenue site and not the cash option as I would still pay national insurance and tax on this.
Bought £20,000 car for £18,000 new. When I save the 40p/mile 10,000 miles and the 25p for all miles after, + The tax I would have been paying, then deduct all the fuel and other costs I am left with £6500 per year. 3 years £19500 in the bank, £18000 for another car plus trade in the old one for £2000, so the profits are not much about £3500 over the 3 years, but that does mean you can have the car you want and you still save. I'm going to buy 2 year old next with 10-15k on the clock for £14-15000 still have a years warranty and no one will know with private plates on the way things are I might get a Jag S type for that after a haggle and sell my own privately for £3000. That will be 3 years motoring for £11-12000 and i'll have beeen given £19500.
Work it out very carefully there are some loosers out there.
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"persuading a girl used to new company cars"
Shouldn't be too difficult when she sees what becomes affordable. Add to that the fact that a new car is second-hand the moment you start using it...
-------------------------------
Illegitimi non carborundum!
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All advice appreciated. >>
ajsdoc: I would buy nearly-new or up to 1 year used. The saving would go on home improvements. But then we are not image conscious about our cars. Unlike the wife of a Finance Director we know who has always got a new E-class every 2 years. He drives 40 miles to work in a privately owned 12 year old Astra, and leaves the Merc at home for his wife to drive 3 or 4 miles a day on the shopping and school runs. She won't go out in the Astra. He refuses the cash option, even though he knows it would be the right financial decision.
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Dead easy; How many concrete blocks will go in the boot of the focus, and how many in the mondeo?
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>>> Unlike the wife of a Finance Director we know who has always got a new E-class every 2 years. He drives 40 miles to work in a privately owned 12 year old Astra, and leaves the Merc at home for his wife to drive 3 or 4 miles a day on the shopping and school runs. She won't go out in the Astra. He refuses the cash option, even though he knows it would be the right financial decision <<<
eMBe, this must run in the blood of Finance directors, as ours does the same. Until recently stolen this was with a fourteen year old Astra more akin to a zoo inside than an automobile, and now with a five year old replacement Astra!
We have a policy that company cars must not be over four years old, must not have less than four doors, and should not be a 4x4 (image and fuel cost but manager has discretion). Cash given for opting out has the same strings attached. Nowhere however does it say that you, personally, have to drive the car you are allocated/purchase, so we had this ratty old Astra in pole position amongst the ranks of Audis, Beemers (Threes getting unpopular actually now they are 'common'), Jags, Lexus, Mercs, Volvos, etc...!
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I'd be interested to know what you think a Finance Director ought to drive, and why.
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..I'd be interested to know what you think a Finance Director ought to drive, and why. >>
1. The Comapny car as bought/leased or, if cash option taken, the car that falls within the category as specified to be bought with that cash.
2. Why - because that is Company Policy.
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As a very jaundiced, bigotted and narrow minded person (also provocative!), I would like to know how many company cars are really essential to the practice of people's jobs and how many are perks designed to enhance the "reputation" of people who don't need a car to do their job but fancy a flash car to get to work in/for the wife/to park on the drive/to go on holiday in?
I shall now retire a safe distance. (Though I suspect that might be a very long distance!)
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Many company cars are 'perks' ... I believe this practice started in the days of wage freezes (1973?); when companies couldn't increase pay, so they increased perks instead. Like many people I take the money instead and have just 'upgraded' from a 13 year old cavalier to an 8 year old Omega ;-)
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Is the £500 per month before of after tax? This can make a big difference? I don't know about you but the taxman seems to consume an awful lot of any extras on my wages.
In the company I work for there are no longer any company cars left. All those that qualify have gone for the cash option for the simple reason that if the car is a company purchased car then you have to release it for company use when needed and nobody like technicians constantly hanmering on the door asking to borrow your car keys.
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"I would like to know how many company cars are really essential to the practice of people's jobs and how many are perks..."
Most large companies give perk cars to all managerial and professional staff above a certain level. This is effectively "pay" and companies who don't provide a car tend to pay cash in lieu either explicity or as part of salary.
Company cars really took off when top rate income tax was at absurd levels (83%). Back then, some people even had company suits!
The UK has more company cars than most countries. The end of the perk car has been predicted many times but, quite understandably, people like having shiny, new cars which are soneone elses responsibility!
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