Company Car or run your own car?

Re: Company Car or run your own car?

Stephen Courtney — Fri, 23 Jul 2010 22:40:35 GMT

Our practice moved away from company cars in 2001, mainly because the company car tax system was about to change. We get paid a car allowance and the statutory mileage allowance of 40p per business mile. The car allowance is taxed as income, while the mileage allowance is tax free.

The biggest downside to using your own car for work is that you have to pay running costs, fuel, insurance, tax, MOT, maintenance and repair - I'm on my third windscreen, courtesy of stone chips aquired in the line of duty - at my expense. Fuel costs have rocketed, the 40p per mile has been the same for years . Insurance costs have crept up steadily, as have maintenance costs. Woe betide you if your car is out of warranty and it breaks, unless you are good witha spanner and have some knowledge or a good mate who can help. You are paying for all this out of your taxed income and have to pay VAT as well.

The plus side is that it is your own car, and within reason you can choose how to spend your own allowance and drive a car that you like.

The best way to decide if it is a good idea to come off a company car system is to cost up the monthly exoected costs of running your own vehicle - ie finance costs, servicing costs, things like insurance, road tax and the cost of fuel - and bear in mind all this stuff is going to go up inexorably. then see what you get back in terms of a car allowance, and mileage payments. Don't expect the mileage payments to be 'free' money. i drive a 2 liter ford focus TDCi on an 07 plate, and on balance am out of pocket.

But i do prefer having my own vehicle. it's mine and I chose it and it has the toys inside that I wanted.

Re: Company Car or run your own car?

Richard Carter — Fri, 23 Jul 2010 18:47:10 GMT

Am looking at a Fiesta or Corsa van as almost all my driving is classed as 'commuting', even when coming back to the surgery for the fourth or fifth time that day for a/h call-outs, checking patients etc. If you have multiple practice sites or doing large animal work then the 40p/mile helps offset costs of running your own vehicle. Keeps the paperwork simple too.

Re: Company Car or run your own car?

Rob Reid — Tue, 20 Jul 2010 09:54:12 GMT

I looked into this a few years ago when in mixed practice. I sat down with a friend of mine (he was a travelling salesman) to work out the figures and we reckoned that it was only worth having a company car if you did over 15000 miles a year (this was based on a 2.0 litre TDI Ford Mondeo estate.) Bear in mind that fuel was at 90p at litre then so would now have to adjust your figures to account for approx 25p rise ibn fuel price, so you would now get less for your money towards tax and servicing on your 40p/25p per mile personal car allowance.

The value for money you get also depends on whether you run a petrol or a diesel - diesels obviously get a better mpg (good for your personal allowance) but are more expensive to tax. From the company car side of things, diesels are liable to 3-4% more company car tax as they have more harmful emmissons.

By the sounds of things, you are on the border line for whether it is worth your while or not. Remember to figure in other factors such as servicing, insurance, MOT costs etc - this is often where a van is a good option (as mentioned above.) Also do you want the hassle of sorting these things out for yourself? On the plus side - if you have your own car you get to pick whatever you want....

Re: Company Car or run your own car?

Martin Jones — Mon, 19 Jul 2010 22:55:59 GMT

Would agree with costings re a van over a car. As a locum, I drive a combo (crew) van. It's panel sided, so is classed as LGV, but has seats in the back so can transport the family if necessary. It also cost, at 4 years old, about two grand and goes down better with the farmers than some gigantic Navarro. I used to drive a SWB landy, and about the only places the van can't get to that the Landy could are out-and-out marshes and the beach.

However, on the downside, if you run your own car then you're also liable for servicing, repairs and crashes. Another bonus for vans is that they're cheap to repair - so that when I was ambushed from behind by a tree (don't ask), I was able to replace the rear doors for a hundred quid and an hour of elbow grease; imagine doing that with a Range Rover.

Personally, I'd recommend a Combo van to anybody - less painful on tax, cheap to run and you can fit a family plus masses of gear inside.

Martin

Re: Company Car or run your own car?

Michael Woodhouse — Mon, 19 Jul 2010 21:55:28 GMT

I costed this out and I have more money in my pocket having a company vehicle. The tax and reduced salary wouldn't let me drive around in a 2009 Freelander Van. Need the 4X4 for farm work. Tax costs much reduced because it's a van. The practice gets the VAT back and can write it off much more quickly than a car.

When costing things - remember commuting. I get that, but wouldn't if I ran my own vehicle.

If you have your own car and drive a van, have no significant private mileage you can commute to work in it and pay no tax.