[pugxs]

Evening all!

Apologies if this has been discussed elsewhere before but I've read so many threads on a multitude of boards that I am now thoroughly confused!!

I have recently been presented with a promotion opportunity that will result in me spending more time in our regional headquarters (230mile round trip). This is expected to be twice per week and the mileage will be business miles.

As a sweetener I have been offered a car allowance of £7,000 per year. This has come at a good time as I was thinking about trading my current car in (07 E92 330i M sport with 95k on the clock) and figured I could use the money to pay for a PCP deal through BMW select. However reading various forums it would appear that perhaps leasing is a better option for me as I don't intend to keep the car past 3 years and would like to swap for a newer model every time.

Can somebody confirm that this is the most sensible approach? I have only ever bought cars with cash and really don't know what I am doing with PCP or leasing.

By my calcs I would have £320 pcm after deductions but I am happy to make this up to £450pcm for the right car. I would love a 430d sport - is this unrealistic?

My mileage is likely to be high, with at least 22k pa on business miles and an additional 10k pa for personal use.

I can claim running costs for the business miles at 21p per mile.

I am happy to use my existing car as a deposit or equally have access to the wife's car to allow me to sell it and just use part of the cash.

Please could someone help me understand what would be a reasonable financing strategy as I have no knowledge of these sort of arrangements!!

Thanks in advance and sorry for the long post.

[Proftinkerpot]

To get a 430d on lease with 22k miles per annum will be expensive even with a hefty deposit.

[Archer-s]

With kind of mileage i would check if they can do a fully maintained company car, go for a plugin hybrid and the cost should be on par with the depreciation. However if you do want to go down the private route, I would go with private ownership, esp on a 430d, keep a close eye on the value and change when the value is right, from what I can see, the 30d models generally hold their value better than book value suggests, hence take some risk and hope it pays off, but that's me

Also I did some calculations on 30k PCP, I didn't find one I thought was good value, I have gone HP on a nearly new 320d, 6k down and 480 a month over 4 years. Again it was due to the high mileage resulting in a low book price/GFV at the end that made PCP a poor deal.

[batty]

Just for an indication - a friend of mine does lots of miles through his business and always leases his cars. A year ago he picked up a merc E220d on 30k miles pa for 3 years for £385+VAT pm and minimal deposit. I'm not sure how that factors up to a 430d.
If you talk to the big lease companies they'll be able to help - they specialise in high mileage leasing to businesses.

[....,,,,..,,..]

Nothing is unrealistic, it just depends what you feel you can pay extra for fuel etc.

For £450 a month you can get decent 3 series as more off them.

Also as mentioned get in touch with some lease companies, Lings cars do high mileage deals if I remember correctly.

Also what will car be used for when not at work?
Are you single, no kids, no hobbies?

Also do you have to drive to HQ?

For example ours is in London and I just buy off peak train tickets, we have another place in Manchester, and while I could drive there, it's simpler getting train and claiming back on expenses.

Is it 21p all engines sizes or does it differ bettween 2.0l and 3.0l engines.

If it is mainly going to be used for work and commuting, I would go for a better specced 320d / 320ED, Merc etc as you will have decent spec with in car toys.

[ken m sport]

I was in a similar position recently. I currently have a company car 3GT but changing jobs. The new employer company car scheme wasn't great so I have ordered a 420 M sport GC with a few options added on a personal lease. That's 3x23 which works out at £590 per month full maintained for two years with a max mileage of 50k.

Excess mileage charge is 11p.

[SaintMac]

You should also be able to get a reduction in your tax code by claiming additional mileage allowance via your tax return.

Check https://www.gov.uk/tax-relief-for-em...age-fuel-costs

[pugxs]

Thank you guys some really good advice/info here.

To answer some of the questions, I am married but no kids so the only ferrying about is my golf clubs on a Sunday morning!! Lol.

My annual mileage is around 6,000 personal miles usually but I have recently started playing football for a club that takes me all over Devon so could put the miles up. I estimate my total mileage to be somewhere around 32k pa.

Had a call back today for a 430d m sport with professional media for 9x36 @ £465 pcm (incl. VAT) - what does that sound like? I was a bit unsure if that's a steep deposit to be putting down? Excess mileage is 5.4p

On a side note, do you guys go maintenance included or find it more affordable to get a good BMW specialist to carry out the servicing?

I am going to go down to my local dealers at the weekend but the guy on the phone seemed very confident I wouldn't find better!!

[NISFAN]

PCP usually gives you more flexibility than a lease as you are able to trade it in or do a VT. Lease is a fixed contract.

Be careful, the miles to the other office (twice a week) will not be classed as business mileage by HMRC. You don't want to set yourself up for a massive tax liability.

[SaintMac]

If you are a home based worker as part of your contract, then all mileage to get to the office should be counted as business miles?

Or at the very least the extra mileage over and above your normal commute to work should count as business miles?

[RalphyBMW]

Don't forget you won't have any deposit for the next car if you PCP or lease and use all of the equity in your current car as deposit.

[pugxs]

The miles to the other office should be classed as business miles under HMRC guidelines. It will not be a hard and fast rule that it's 2 days per week but will average that over the year. They will also be different days (ie non scheduled), with the reasons for travel varying from each week (ie don't have a permanent role within that location).

[NISFAN]

Originally Posted by SaintMac

If you are a home based worker as part of your contract, then all mileage to get to the office should be counted as business miles?

Or at the very least the extra mileage over and above your normal commute to work should count as business miles?

Nope, if you go into a company site more than 40% of your working time (twice a week on average), that would be classed as 'commuting' and therefore not business.

Of course you can claim it as business in your records, but if there is an audit, you run the risk of potentially 5 years of back taxes. Ouch!!!

[NISFAN]

Originally Posted by pugxs

The miles to the other office should be classed as business miles under HMRC guidelines. It will not be a hard and fast rule that it's 2 days per week but will average that over the year. They will also be different days (ie non scheduled), with the reasons for travel varying from each week (ie don't have a permanent role within that location).

Probably best to ask HMRC to clarify. I don't believe there are any reasons or pattern factors taken into consideration. They simply tot up how many trips you made in a tax year. If significant enough, class it as commuting.

I would also talk to your employer about this.....last thing you want is to be left out in the cold when HMRC overrule all those trips and ask you to pay up. If the company agree to back these trips as business travel, make sure they take the hit, not you.

It does suck, as the government are penalising those that work far from home. No one would willingly decide to work 100 miles away if they could work closer to home.

[E60MKF]

Originally Posted by RalphyBMW

Don't forget you won't have any deposit for the next car if you PCP or lease and use all of the equity in your current car as deposit.

You will have equity if you go down the PCP route in a lot of cases. You won't have any equity with a lease.

[RalphyBMW]

Granted RE none whatsoever with a lease, but not much with a PCP, certainly not anywhere near as much as the OP's talking about putting down - his 07 E92.

[oop north]

Originally Posted by NISFAN

Nope, if you go into a company site more than 40% of your working time (twice a week on average), that would be classed as 'commuting' and therefore not business.

Of course you can claim it as business in your records, but if there is an audit, you run the risk of potentially 5 years of back taxes. Ouch!!!

Sounds like you might be borderline - if two days a week and no more then that suggests you would be OK. There is also a two year rule but that relates to whether or not it is intended to be permanent - and your description seems to be that it is permanent (ie, it's not expected to be a temporary arrangement)

I'm not sure that speaking to HMRC will be any kind of assistance - if they say it is OK, that will not be binding on them anyway and they may say no and be talking cobblers.

Ideally you want to make it your employer's problem rather than taking the risk yourself - if they are asking you to do this they should be getting confirmation for you from their external accountants that this is OK and will not get you into problems

Re the higher mileage lease - I seem to remember that Listers BMW do quotes for longer leases on their website (might only be to companies though and not private individuals). If you can get your employer to provide, say, a 330d - that would possibly work well and keep the company car tax down a bit too

[pugxs]

Thank you for the responses, some useful information here.

I didn't intend for this to turn into a tax debate. Needless to say that I have checked the particulars of the mileage with my employer and also sought advice from 'experts' and also those who already have a similar arrangement and am satisfied they are business miles. Without going into too many details, the other site is a separate legal entity from the one I work within (just happens my board are located there) and I am actually undertaking a consultancy type role on a temporary special implementation project for the other LE amongst other reasons for travel. The time will not exceed the 40% rule. On a side note, the HMRC do take into account reasons for travel and working patterns when assessing if another site is a permanent place of work.

The over arching justification is the special project as this is deemed a temporary arrangement (as is not expected to last more than 2 years) and is allowable as a business expense in the guidelines laid out by the HMRC.

Going back to the original topic, what is the consensus on the best way to finance a new car using a car allowance?

[....,,,,..,,..]

Personally with a car allowance, it's PCP or Leasing.

Also do you have any company rules on what you are allowed.

We can't have 2 seaters (depends on company role) and must change car at 7 year point.

Also how much of your own cash you want to add to the mix.

From the sound of it a 2 year lease would be ideal.

[JustChris]

I've found 20k mpa seems to be a bit of a cut off, the monthlies don't seem to go up much after this so comparatively 30k mpa didn't seem to cost lots more than 20k. 10k to 20k quite a bit step though.

[dubdemand]

I'm in the process of looking at these same options and started a similar thread yesterday.
Personally, I'm being tempted away from a 4 series by the massive discounts available on the 330d (in my case a Touring).

I prefer the idea of PCP to be honest as you will at least own the vehicle at some point making future deposits easier to take care of. The only down side is the full value of the vehicle becomes your responsibility from the finance side of things - with a lease you are only liable for a monthly outgoing.

I've emailed TRL and hope to discuss a possible deal during the week - I will of course check the lease option for a vehicle of matching spec just to be certain I'm going the right way with it.

I've found 'contract hire and leasing' website pretty good to get ball park monthlies for leasing...
http://www.contracthireandleasing.com

Good luck, happy to share info with you along the way - especially if it means we can help each other to find the best deal!

Phil

[pugxs]

Thanks mate, will deffo share whatever nuggets of info I get about deals etc.

I keep seeing deals on 3 series but I have a mental block about 4 doors and am in the market for a coupe - hence the 4 series.

It also has to be on similar performance to what I have already as I like to feel progress with each car I own. I do love the odd traffic light Grand Prix!!

I would do a 2 year lease but as the car allowance will stay with me after the 2 year period, I intend to use it to find my cars for the foreseeable future and therefore don't want to have to put down another deposit more frequently than I need to.

With my mileage is it likely that a PCP deal would yield any equity after 3 years? That is the only appeal of a PCP for me over the lease as with a lease I would have to keep stumping up a deposit.