Company Car or take the money
 

My wife is due on maternity leave at the end of August and we have been told if she does not want her car they will give her £300 extra a month.

If she keeps the car we only need to pay for fuel it's a bmw 118d hatchback.

I'm not sure if the car is going to be big enough really to fit everything in but if we did keep it we know that we would not have to pay for anything else.

Then the other side is telling me to use the £300 a month towards another car.

Any help would be good.

Thanks

Take the money and put it towards something you actually want/need I think.

Like a vasectomy :thumb:

Taking the company car will also be a taxable benefit.

http://www.hmrc.gov.uk/calcs/cars.htm

Using the calc shows you'll be taxed on an amount of £3960. This being £792 per year if she on the 25% tax or £1584 if she's on 40%.

Taking the £300 per month (ie, £3600 per year) will be taxed too at whatever your rate is. So this would mean your yearly salary after tax is only increased by £2700 (if on 25% tax) or £2160 (if on 40% tax).

Therefore taking the BMW means you'll be £792 + £2700 = £3,492 per year worse off (if on 25% tax) or £1584 + £2160 = £3744 per year worse off if on 40% tax.

If you think you can run a car (buy, lease, maintain, tyres, etc) for less than these figures (ie, approx £3,500 each year) then you're better off getting your own. Of course the BMW is peace of mind in that you'll not have to worry about high risk events like the engine going bang.

WARNING - Its been a long day, so I don't guarantee my maths. But someone will be along to check it I'm sure :)

Thanks for the help. I think your right take the money and look for a car we want and need.

****ing hell, a casual question on an internet message board and the hardcore maths comes out to play, totally unsolicited less than 5replies in.
Most helpful reply ever on scoobynet?
Astraboy.

Got to agree with you there...

Am in a good mood. Became a dad yesterday :) No doubt I'll be a real ******* on here in a few weeks time after no sleep.

I think its a close call in terms of car decision when it comes down to finances. But if a 118 is not the right car anyway then take the cash and get a Vectra. Cheap, big, cheap to insure and maintain.

Just to add that we got a Vectra given out little one arriving. Plenty of room for all the baby kit.

I had a company car for a long time and then moved to a company that forced you to take the money.

The advantages of the money are that, well, you get money. So you can buy whatever you want (check those terms and conditions though, mine say car must be less than 5 years old and be 'suitable' for business).

The advantages of the company car are simply no worries at all. Something wrong? No problem, it gets repaired. New tyres? No problem, get those replaced. Insurance goes up? Really, haven't noticed as I don't pay it.

The other problem with the money is that you get used to the money! It becomes part of your salary, you forget it is there to fund a new car in the future so a new car is just as much as an expense as if you didn't get the car allowance.

Certainly sounds like taking the money is best.

Les

Is your baby going to be a giant? ;)

I coped with a Citroen AX back in the day. I suppose expectations are higher, but a few years ago I had to "make do" with what I had :)

It will not become part of her salary as she will not be returning to work. I think we need to start looking at cars to see what we need.

The 1 series is a nice car i just think it will be a push getting everything in.

Also in a years time we will have to buy a car anyway when she does not go back

I take the money, rather than have a car, but I'm only slightly better off - and a big unexpected item would make me worse off doing it.

My terms and conditions state the car should be under 4 years old (mine is now closer to 5, so will need to change soon), cannot be a convertible and must be able to carry 4 people.

The way fuel and insurance has gone up however, the company car option is looking more and more attractive.

what exactly are you taking in the car?:lol1:

my mother in law golf copes just fine with a pram in the back and car seat in the rear, when she's been on baby sitting duty