To clarify,will you be getting €825 a month with UK civil service rates on top for all business mileage?
Well if you take the allowance you'll end up taking home about 5k of the allowance and assuming you do 35k business km's you'd receive about 12k in tax free mileage.
So you'd have 17k to fund the purchase, running & maintenance of whatever car you want.
Alternatively if they give you a company car you'd have to pay BIK on 6-12% of the car value (reducing your take home pay by whatever 3-6% of an Audi A3 is)...
Have you done any analysis of your 3 year costs to come to the conclusion that a is better than b.
To put it gently,if you've always had company cars,then you have been insulated from minor details like depreciation (likely near 6k a year),fuel (3k),servicing (500 a year),tyres,interest(700 a year ave),insurance(do you even have a ncd in your own name?) and the unquantifiable other expenses likely to bite you like crashes,hire cars,big jobs like dpf,dmf etc.
What I am saying is that it not as clear cut as this way I get 17k,that way I pay 3 k .
Another consideration is that if the job doesn't work out,you still have the hefty repayments in your name.
And finally (!) If it applies,you would find mortgage approval more difficult with a large car loan going out each month .
Why are you leasing?
Why not use the allowances to buy your own car?
Also, civil service rates reduce after 6k give or take and the km rate drops to 20 odd cents per km. currently 59c per km for a car over 1.5L up to this figure.
The car allowance usually wins in my experience.
I know when I looked at it myself, it was a no brainer.
I get a car allowance of €10k per annum. I do around 8k business kilometres per annum. So I get around €5k in "mileage". All said, I end up with around €10k per year. I have to tax, insure and fill the car myself. Plus I have to get it serviced and replace tyres etc. The whole lot probably costs me around €5k a year in total. I bought something for €25k which was around €60k new. It's probably depreciating at €3k a year. In total, I reckon I make €2k a year on the whole deal.
If my employer provided the car, it'd cost me around €9k a year.
Gordon, thanks for this. My circumstances are a little different:
I do anywhere between 35,000-40,000 business kms per year, that means more servicing, more frequent tyre changes, more wear and tear.
The allowance on offer to me is €9,900 per annum gross.
I'd have to tax and fill the car myself. The other biggie for me is I've no No Claims Discount built up as I've had a company car for years = high insurance costs for the first couple of years at least.
I can't see where I'd even make a cent on having a car allowance, I'd worry about breaking even.
Thanks for your thoughts though, it's good to thrash these things out!
So you'd get €18k per annum net in car allowance and mileage but have to pay for everything yourself?
I'd take that!
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