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Company car lease vs cash

jacks09

By jacks09
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stevesmith

stevesmith

Posted
Posted
Which is better would really depend on your needs and current situation. The car would certainly be a nice option because it is a free ride, but if you already own a vehicle you may not have any need for a car. Also, if the car is leased, you will only be permitted to use a certain number of miles before the lease costs more money. This might mean restrictions with the vehicle through the company. The cash has its' own advantages obviously because cash is always a good option for anyone. The real question I would have for you would be what your current situation is and which would be more useful to you.
jacks09

jacks09

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Well......


Our little old car would not pass its MOT so I was waiting on this job offer or not before deciding.


Headline is we need a car. I would be paying 40% on the cash if i took it which makes it less compelling and it is paid monthly rather than as a lump sum.

The ?6600 allowance would allow me to lease throgh the company a brand new car and any excess is added ot my salary. Company car tax is a factor and on a ?30k car this would be roughly ?250 p/m. I'm leaning towards leasing a vehicle at about ?250-300 pm with the excess 250-300 taken as a cash and then used to cover some of the company car tax.......


Its all v confusing but i do realise it's a very fortunate position I am in.

DaveR

DaveR

Posted
Posted

The overall cost to you of taking the car will be the additional tax you wll pay on the benefit in kind plus the extra cash that you have foregone. The finance/payroll people at your new employer should be able to tell you exactly how much, but for a half decent car I'd expect it to be at least ?3.5 - 4k per year, not including any additional petrol allowance. That may well be less than it would cost you to buy/lease and run a similar car privately, but may, for example, be less than you currently spend running your own car.


We did the maths on this a few years ago when the option came up, and worked out that the additional cost of getting a nice new Audi rather than carrying on with our three year old Renault was about ?2500 per year - not worth it for us.


Edited to add - posted this before I saw your response. You've obviously got the figures so can do ther maths, but in your case comparing to costs of replacing your current car.

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