I'm sure many of you are or have been in the same situation:

My company currently pays me an allowance to run a car. I also have the option of a company car. There are some weird rules about our car scheme that are making me think maybe I should ditch the allowance and go back to a company car, viz:

A car on allowance has to follow the same rules as company cars. It must have 4 doors, not be a "sports car" (although hot hatches are allowed), and it must not be more than 4 years or 80000 miles old.

When you sign up for either option, you sign up for 3 years, and may not change within that period. The trouble is that of course as a car owner, once the 4yr/80k rule kicks in, this means you're buying a replacement each 3-4 years. I chose last time to buy a 14 month old car, rather than brand new, which bought me roughly 3 years of motoring, and a reasonable drop in price from a brand spanker. Now the 3 year period is about up, and I have to decide what to do.

My current car will have lost me about 6k in depreciation over the time I've had it, so now I have to either sell it privately or trade it in against something else, if I decide to stick with the allowance. However, I'm thinking there must be other options.

I've plugged some numbers into a calculator run buy ALD (our leasing company) and the numbers work out about the same, i.e. the allowance is roughly equivalant to running a similar car to the one I have now (Octavia VRS). So there isn't any huge financial penalty to switching back. The downside is I wouldn't own the car any more so modding etc. would have to be put behind me (not that my current one is modded really anyway).

A third option is to continue to take the allowance but plough it into a PCP contract, or hire purchase, etc. I'm not very familiar with these options and I wondered if any of you are. It looks like a PCP payment will be very similar to the allowance after tax, so I'm wondering if that's a good compromise. Less hassle, but more "ownership" if you see what I mean ....

Any experts out there, or people who've tried a few options?

Thanks

PCP's can be good, but it depends on the miles you run... when I bought the fiat, I was offered leasing deals and PCP deals, and they all seemed very attractive, compared to a simple car finance deal... but because I do 40-50k a year, the leasing was out the window, because although some would let me do that mileage, the price went up SO much, it wasn't worth it... The PCP's are very attractive, but they also limit mileage, and when I pipe up with "I may do 50k this year.." they say "no chance mate", so in the end, I took a normal car finance loan over three years,(HP or hire purchess) and I'll change the car at between 18 months and two years, and I should be up on the deal...... i.e at two years owe 3k on a car thats worth 4.5k.........

so if you do low miles, check out the PCP offers..... you may be able to get a decent car If you do high miles, I'd go for the company car option...

(just my opinion, some on here may be more informed than me... it's a bloody complicated world of different offers out there!)

Just another thought to throw into the melting pot - something I considered when looking at smilar options.

If you get a PCP what happens if you get made redundant? Having been through redundancy myself, it was good to just hand the company cars keys back and not be stuck with PCP payments - I just got a runaround until I could buy the Octy II. Can you get sickness and/or redundancy protection on PCP payments?

Also, what happens if you get another job where there is a company car on offer but no allowance system. Maybe thats not too common these days, but I guess you could be faced with hety charges to buy yourself out of the PCP if it was the case.

Our scheme is 6 years unlimited mileage so makes a bit better for running personnel cars. The reason I use my own is that the company cars are all fords and I didnt want one. When I looked at company vs allowance and include in the figure what I would pay in tax on an equivlent company car it covered depreciation, servicing and consumables, but does not build a contongency fund if it goes mechanically wrong.

Did the company offer a any car policy I may take it but you have the issue if you leave the company of sorting a car. In addition will you be insuring another car to maintain no claims? Just another cost you may have to consider.

No option to keep the current Octy at all then?

Nick,

Little hint.

If you are hitting the age rather than mileage limit try sticking the car on a personal plate at the start, something simple will cost about £250 off the DVLA site, your birthday is nov 27 so try N 27 N?C (? is middle initial). some companies only seem to check by looking out of the window occasionally. That low mileage new car you bought thats only 6 months old might actually be 2 years old if you get my drift so the initial cost is less

We switched Wendy to cash & its worked out well, tax has certainly been beneficial, it also gave a wider choice of car as her company were in bed with Vauxhall at the time & the biggest plus I think is you dont feel so tied to the company, ie if you choose to leave you dont have to look for new wheels at the same time or limit your choice of new employmecnt to jobs offering cars.

Depends on the company scheme really.

My old company scheme had "big" incentives to take a company car rather than the cash option.. mainly because the cash options were quite low, and for the same level you could get quite a good car through the company (although it had to be a ford, vauxhall or saab diesel, and not remotely sporty, so no Mondeo ST-TDCI)

But it meant even the gimpy salesmen were hooning round in Signum Elites or Mondeo Ghia X/Titainium X models.

Its a shame it has to be a 4 door. Otherwise you could take the money and do what I've just done

Otherwise you could take the money and do what I've just done

Can you really imagine Nick in a diesel van?

Chris

Thanks for the hints so far guys. I had a sample PCP quote yesterday and it was ridiculously expensive, so will have to try a few others to see if it really makes sense.

Stuart, no, my company aren't quite that dim! They insist on copies of all paperwork including service records and MOTs, so the private plate wouldn't wash.

Tom, no.

Col, our scheme is actually quite attractive. The co. take the lease cost for the grade and add back the VAT they claim back, and an allowance for insurance, so it's very fair.

Ours don't and have been pretty lax at enforcing the policy even when people's cars are obviously well past the three year limit.