Ever since I opted out of the company car
scheme of my previous employer, I've been asked on numerous occasions by colleagues if it
is a worthwhile option, so I've written down the following so I don't have
to go through it all again - only joking !!
Obviously every company scheme is slightly different
so the information given is based on my experiences. Each case should be
considered on its own merits, however the details given should give an
overall picture of the pro's and con's of opting out.
The question I get asked more times than any other is
'do I make money ?' No, but that's my decision. I chose a car that was
comparable to one that I would have as a company car, and subsequently use
up all of my allowance paying for it. It just depends on your personal
preference as to the age, type and condition of the vehicle you go for, although
your company may stipulate certain parameters that you have to keep to.
The scheme my employer had decided on provided payment
in 3 ways - a monthly allowance to provide the vehicle, a business mileage
allowance, and a one off payment each year to cover insurance costs.
The benefits which persuaded me to opt out are as
follows :
 | You can chose the type of car that you want to
drive and that suits your lifestyle |
| If you get fed up of it tomorrow, you can exchange
it for something else, rather than wait for two or three years only to
have a newer version of the same car. |
| If you have more than one car (eg wife has a car),
you could always swap and still be able to claim the mileage. |
| If you want to alter or modify your car, you can -
its yours. |
| After paying off the car, if using a loan, no
matter how many miles on the clock at the end of the day, it will still
have a residual value. |
When first looking at using your own car,
and the allowance being provided by their employer, most do not consider
that they could afford to pay for a similar car to that being offered as a
company car. However when taking into account the allowance, you must
also take into account the saving you will make each month from not paying
tax on a company car. The Monthly Budget
Calculator page goes into further detail on assessing your monthly
budget available for purchasing and running your own car.
When looking at the mileage allowance
being provided by your employer, you must also take into account the
possible tax rebate available. The Tax Rebate
Calculator page goes into further detail on assessing the amount due
back from the Inland Revenue for business miles travelled in your own car.
