Company car or allowance?

So the choice is a £500 a month lease, must be fully maintained. Or £500.00 a month allowance (taxed, natch) plus 20p a mile.

My mileage is not going to be as high anymore, so only 20k miles pa.

Anyone done the maths on buying your own and having a Company car recently? What’s the received wisdom these days?

I assume you ar 40% tax bracket? What is your car insurance like?

1 Like

My wife took the car as she has no tax bills, servicing or insurance to pay.

If she took the cash she may be better off but she’d spend a lot on the above and have the hassle of sorting it all out. We worked out it wasn’t worth the calculations as the simplicity of the car was the right move.


spot on, people forget the cost of their own time

Remember you are moving the insurance risk and the maintenance risk to you from the company.

The only advantage I can see is if they let you get any car of any age and you can get a 5 year old car and pocket the money.

Otherwise it’s not worth the risk.


I have a car allowance and do 18k miles a year.
6 yrs ago I was paying approx. £165 at 40% for a 320d. The £160 plus the car allowance gave me £480 a month (+/- £20) after tax.

I decided against leasing and for the first 2 years drove a 6yr old saab i bought for £3k cash. Saved up the allowance and bought a £9k car, drove that for 18months saved the allowance… Bought the mazda which exploded after 18 months. Sold that and bought the Honda and im still many quids in after all running costs.

If you can live with older cars to begin with the allowance is a no brainer. Ive ended up with a decent car for free.

If you’re going to personal lease then there’s little in it, id stick with a CC as the risks are all yours.


Use an online calculator, like this

1 Like

Depends on the car, it basically has to be a hybrid of some sort (with a decent electric range) to not be massive on tax. Because, of course, hybrids are exactly what you need for long distance driving :thinking:

{Insert standard jibe about movable seats here}

Still depends on your annual mileage. James. If you are a v high miler (25k+ usually) then company car often makes sense, otherwise fund your own.

Don’t forget also that although you’re getting 20p per mile from the company, you can claim the tax difference on HMRC’s published rates, i.e. 45p/mile for the first 10k, then 25p/mile >10k.


Yep, I get 45p per mile for using my own car. Doing 15k - 20k miles pa for the firm. Fuel is about 10p per mile so the 35p balance more than covers depreciation, servicing, insurance and consumables. :+1:

1 Like

And seriously, why are they doing this? Cut the allowance to £250 a month, pay the HMRC rates to give the same pre tax cost and it would save you £60 and them £414 in NI.

Presumably because mileage is variable and not everyone in the company does the same.

Sam took the company car option when she moved to her current job, but very much for the convenience and newness, as she would be financially better-off using her own (older) vehicle.

1 Like

I get a decent allowance and choose to buy my own car cos the choices I get from the company are not to my taste - if they let me have an Audi A8 I would probably plump for the CC - I bought mine at 2 years old and its been free to buy and run so far - plus the car is mine if I choose to leave the company

I think it very much depends on what you are looking for so really hard to generalise - whatever you choose its good you have either a CC or money in lieu

1 Like

All helpful stuff, thanks chaps.

The Calculator is ideal. Although there is, as many have said, the aggravation factor of running my own car compared to a fully maintained brand new car.

Will be down to 20k miles next year. Probably only 15k business miles.

Although it’s really not hard to run a car yourself. All I do with mine is service/MOT it once a year and see to the tyres. And put petrol in. In some ways, having control yourself is easier in that you do things when you want to, rather than fit in with the schedule of others.

1 Like

Run a Japanese car with an NA petrol engine and all will (probably) be fine.


If you do decide to do that tick the extended warranty box…

1 Like