When you are offered additional salary to buy your car instead of driving the company car that you presently have, take some time to look at the positives and negatives of each option when deciding, company car or cash.
At CarLease UK, we understand that customers need some guidance through the myriad of choices faced by corporate car drivers. OK, you can choose the car, you won’t have to pay company car tax and you will have an allowance for mileage, but remember that the additional pay you receive is taxable at your highest rate.
When you run the car yourself you will be paying the running costs, insurance, road tax and all fuel and servicing. Although not a simple comparison CarLease UK, we can help you to compare your two scenarios.
If you have a company car, then your tax liability is based on the emissions of your car, adding 3% for a diesel in some cases. Certain cars have allowances as well as having lower CO rates anyway, such as a hybrid which get a 2% discount. Multiply this % by your P11D value at new and then multiply by your highest tax rate; this is how much you will pay.
If you have got your head round the figures and want to go ahead, then personal leasing and personal contract purchase are the way to go if you want fixed, known monthly costs. Consider including maintenance to remove nasty surprises like a puncture and consider GAP to protect you in the event of a total loss situation.