New advice on company car & keeping the 197.

[sthomasj10]

Hi guys,

I've just landed a new job which I start in January. One of the perks being is that I'm given a company car on lease, with private and work fuel covered.

I realize that I'm going to have to pay company car tax, which is a slight hit off my basic wage. However I'm looking to run something relatively small ( Audi A1 maybe ) as I understand that the deductions on your wage are based on C02 emissions.

A lot of my non-motoring-fanatic friends have branded me stupid for not selling the 197. However I busted my balls to afford the RS after 2 years of wanting one, and my intention is to run the company car in the week, and the RS on the weekends.

Another reason for keeping the 197 is that I've still not paid it off, and don't want to sell and have to make up a sum to break even.

The conclusion I've came too, is that where I am working now.. I spend £130-140 a month on running the RS to work. With the new job, I will not spend any money on fuel whatsoever, but will be taking a deduction for the company car tax. So in the be all and end all, I'm actually saving money having the company car, even if it is costing me £60-70 in tax a month.

Am I an idiot for keeping the RS? I've worked out if I sell the car and settle the finance on it, I'm £200-300 better off a month.. however, driving around a 1.6 Audi which isn't mine isn't what I intend to do!!

Also, I believe that I shall have a minimal choice over what car I go for.. Anyone got any ideas in mind for a small, enjoyable hatch with a bit of power? Low emissions would be good also!

- Sam

 

[sthomasj10]

All advice would be much appreciated

 

[sthomasj10]

I've had a go on Parkers company car tax calculator.

An example;

1.2 Corsa SE - £31 a month car hire tax, do I also have to pay additional tax because fuel is paid for?

Confused.com.

 

[sthomasj10]

Anyone?

 

[Mattie]

I'm kinda in the same situation, only I'm now self employed and had to buy my own van!!

Many of people have said its stupid to keep the Clio and that i should just sell it and put money into my business.
But I love having a car and have waited 4 years to be able to have something as fast as the Clio so ive decided to keep it!!
My insurance does run out this month but my idea was to see if i can insure it for 6 months a year (summer time) and use it on weekends and outta work hours during this period then put it off road over the winter.
I just cant see paying the insurance for a year for the van and also the Clio if i'm hardly going to use the Clio as it would be quite high, >£3k combined!!

 

[Lump]

I've had a go on Parkers company car tax calculator.

An example;

1.2 Corsa SE - £31 a month car hire tax, do I also have to pay additional tax because fuel is paid for?

Confused.com.

I believe you will yes as its a benefit in kind.

 

[Roger200]

Sam, i have a clio 200 as my second car as my job comes with a company car. So I have a Nissan Qasqai 1.5dci (very practical and eco for transporting mates and bikes around ).
This has meant that i only drive the clio on weekends and appreciate soooo much when i do. Admitedly i have only driven it twice in the last 6 months, which some would argue is a waste of money but there is no way im not gona have a fun car!!!
My company car tax is about £60 a month and my fuel is also paid for
I dont regret doing it this way as i have best of both worlds. Just look into what you get as a company car. Do you want two small cars or would it be beneficial to have a more practical car? On the flip side, it depends how much you wana pay out a month. IMO, the amount you have to pay for a company car is such a small amount for what you get (my Qashqai has list price of £22,000 so i think £60 a month all in is pretty sweet!)
Finally, by having a second car the mileage on the Clio will stay low as you wont use it at much.

 

[RudeRacing]

Yes if you have fuel included, you also pay a tax benefit on this too.

I would really like an A1 1.6 TDI for a company car.

 

[sthomasj10]

I'm kinda in the same situation, only I'm now self employed and had to buy my own van!!

Many of people have said its stupid to keep the Clio and that i should just sell it and put money into my business.
But I love having a car and have waited 4 years to be able to have something as fast as the Clio so ive decided to keep it!!
My insurance does run out this month but my idea was to see if i can insure it for 6 months a year (summer time) and use it on weekends and outta work hours during this period then put it off road over the winter.
I just cant see paying the insurance for a year for the van and also the Clio if i'm hardly going to use the Clio as it would be quite high, >£3k combined!!

I'm glad to have found someone who's had the same criticism mate. I too spent ages wanting an RS, I'd feel awful if I was to sell it. I'd miss it terribly.

Luckily, I won't have to fork out for insuring the company car, maintaining it or paying road tax. The only deduction I'll have will be the dock off my income tax. It's been confirmed I'll be having a 11' plate Astra 1.7CDTI, It'll set me back £40 which is good news, as it'd cost me £150 in fuel running my RS to where I work now!

I believe you will yes as its a benefit in kind.

Company will not cover private fuel usage which is good as that'd be an extra £40-50 off my wages every month.

Sam, i have a clio 200 as my second car as my job comes with a company car. So I have a Nissan Qasqai 1.5dci (very practical and eco for transporting mates and bikes around ).
This has meant that i only drive the clio on weekends and appreciate soooo much when i do. Admitedly i have only driven it twice in the last 6 months, which some would argue is a waste of money but there is no way im not gona have a fun car!!!
My company car tax is about £60 a month and my fuel is also paid for
I dont regret doing it this way as i have best of both worlds. Just look into what you get as a company car. Do you want two small cars or would it be beneficial to have a more practical car? On the flip side, it depends how much you wana pay out a month. IMO, the amount you have to pay for a company car is such a small amount for what you get (my Qashqai has list price of £22,000 so i think £60 a month all in is pretty sweet!)
Finally, by having a second car the mileage on the Clio will stay low as you wont use it at much.

You're very much thinking on the same level as I am mate. I'm going to keep the Clio indefinitely and considering that I won't be paying a penny for fuel in the week like I do with my current job, I'll be saving money and having the time to really enjoy the RS at the weekends. I've been given an Astra CDTI 1.7 diesel, that'll do my just fine and will be perfect for lugging people around in being a 5 door My sister has a Qashqai, nice car!

Yes if you have fuel included, you also pay a tax benefit on this too.

I would really like an A1 1.6 TDI for a company car.

Same here mate, it was on the list only up until recent. I'm relatively happy with an Astra. I think it may be an auto too which is nice considering I'll be in a lot of traffic most of the time!


Thanks for all your feedback btw guys! Very grateful! :thumbup:

 

[Willis]

Get the company car, flog it to death because it isn't yours, save the Clio for best.

 

[Paul]

It isn't daft keeping the Clio at all, I can say that you would be very bored indeed after a few weeks and even more so in the summer. The Clio will feel a little more special when you drive it too.

I know, I only drive mine at weekends too...

 

[Curley]

My car is a weekend warrior too, I also have a company car which I drive in the week and then jump in to the 200 at the weekends. I really appreciate the car and it's set up a lot more.

You already know what you want to do so do that and not what anyone else thinks. Obviously there are massive financial gains to be had if we all sold our personal cars but we are also car enthusiasts and our company cars just won't meet out needs!

 

[Wololo]

I've just landed a new job which I start in January. One of the perks being is that I'm given a company car on lease, with private and work fuel covered.

I realize that I'm going to have to pay company car tax, which is a slight hit off my basic wage. However I'm looking to run something relatively small ( Audi A1 maybe ) as I understand that the deductions on your wage are based on C02 emissions.

Ok, I've not covered any personal tax in about a year but a few tips for you....

The car will count as a benefit in kind. That is to say that using the CO2 percentage and the price of the car, they calculate a sort of cash equivalent and then add that to your pay when being taxed. You then get taxed on whatever rate applies to you: 20, 40 or 50% (if you're REALLY raking it in)

Don't assume an eco-diesel is the way forward. Diesels attract a 3% Premium. So if a given level of CO2 emissions on a petrol car would give you a benefit in kind of (car price x 20%), it would be (car price x 23%) for a diesel.

Just as a baby example:

Car price = £10,000
Percentage = 20%
BIK = £2,000

Tax at 20% = £400
Tax at 40% = £800
Tax at 50% = £1,000


This system of charging applies to the fuel benefit as well, which will be charged at 18,8000 x the car percentage. At least I think it's £18,800 - it's a figure in that region. Taking our 20% car again, that means you'd need to add 3,760 onto your pay, which would end up with a tax charge of either 20%, 40% or 50% of 3,760 depending on which tax bracket you're in.

As you can see, a fuel card is quite an expensive benefit to have....

So do some CO2 shopping on petrols and diesels that catch your eye, and consider whether your annual commuting cost will be offset by the fuel benefit. If not, you may be able to re-negotiate something with your employer... A different benefit, or if you can work into the terms and conditions that the car is only for work use, the fuel benefit isn't taxable. I doubt commuting counts though.


PS: I hate to do it, but... none of the above constitutes financial advice. Use at your peril and seek guidance from your company fleet manager or an accountant

 

[james_h]

I am in a similar position.

Have a company car and have the clio as a second weekend car.

Didn't intend it to be like that, as I spent over 12k on the clio and now it hardly gets used as the company car came after.

Still wouldn't sell it though - even though technically it is silly keeping such an expensive car and running my comp car.

The plus side is I don't have to commute across Bham every day in my own car waiting for a bus to scrape it etc etc...and the clio will stay in bette rnick with low miles.

 

[sthomasj10]

Well said mate. The Clio is basically £200 a month sitting on the drive doing nothing. But I think I'll come to love it even more using it on the weekends.

Eventually I'll sell it anyway as I'm not intending on having it forever!

 

[minimaxs1]

is there not an opt out cash equivilent as there's no such thing as free fuel, the taxman has to know and your either charged as a % of your total fuel used for the month or your tax code is adjusted accordingly.
NOTE driving to and from the office is classed as private milage. be careful this has caught a lot of people out me included in the past

 

[RalphyBMW]

Look at how much it will cost you to get rid of the clio, in terms of the shortfall between value and settlement. Also consider the costs of future maintenance, insurance, VED, depreciation and interest on the loan against the car.

Having been there myself with an RS2000 4x4, I think you would be better selling the Clio. It is not just a case of being able to afford it, but also not having anything better to do with the cash.

Without wanting to upset anyone, if you are going to have a weekend car shouldn't it be something more interesting than a Clio? Depending on how you have funded the Clio that cash could potentially buy you an Elise or Boxster [something less mainstream that won't depreciate like a Clio], or it could pay for a really nice holiday each year, or a bigger place to rent/larger mortgage.

It is entirely down to you, but consider this, when you have a company car that you are paying tax on, which you don't even have to pay for the fuel for, why would you use the Clio at weekends? Every journey will cost you 18-20p/mile minimum plus the risk of damage, whereas in your company car it will cost you nothing, nil, not a bean, because you are already paying the tax on it.

Sure, on the odd occasion that you take it out it will be fun, but it will always be in the back of your mind that you could probably do something better with the cash, and rather than being a really nice conveyance, a necessity albeit an expensive one, it becomes a pure luxury, something that you don't actually have any need for. Cars are expensive for that kind of thing, especially relatively new ones where depreciation remains a factor.

Just a thought. I spent a shed load on insuring my RS to barely use it, before coming to this realisation. You are arguably better to sell it and miss it a bit than you are to get sick of it and have thrown a load of cash down the drain after it.

 

[gazb197]

Good post ralphyBMW! My thoughts exactly, I've sold up (didnt want to at all) bought a catd 2005 mondeo st tdci for £2500 BARGIN! Il be keeping it for many years to come! When I miss my clio, I just think how much money I'm saving.

 

[litchy]

Without wanting to upset anyone, if you are going to have a weekend car shouldn't it be something more interesting than a Clio? Depending on how you have funded the Clio that cash could potentially buy you an Elise or Boxster [something less mainstream that won't depreciate like a Clio], or it could pay for a really nice holiday each year, or a bigger place to rent/larger mortgage.

Be careful Will, something more sensible than Clio...thats fighting talk on here!!! You are absolutely right though and how people spend their money is up to them BUT I was in the same boat. Had a 15 grand E90 330d sport sat around so sold it. Wife had her own car for work, daughters got her own and I drove clio all the time cause I loved it. Had to make myself drive the bloody bm. The BM had no finance on it but cant imagine paying £300 per month finance plus £60 -£70 insurance, so each month your paying £370'ish out, not to mention the tax....whilst the clio is dropping in value...and what is a weekend car anyway? I'm sure people aren't track daying every weekend are they?

My favourite weekend car was Ford Sierra Estate. Cause my weekends are either shopping, gardening, going to the tip, ferrying football teams balls, bags and lads mates around (saturday), Basketball (sunday), picking up stuff from Argos for friends and family cause they were too tight to pay the delivery. Doing the holiday run for friends and family to airport cause they were too tight to pay for mini-bus.....Not a track day in sight!!!!!

God I miss that car!!!!

 

[RudeRacing]

Ralphy as an excellent point if I'm honest.

I know I'd rather have an Elise parked on the drive...