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Posted 1st Jun 2021
I have been offered a car allowance from work. What is best financially? To buy a car outright, lease it or use PCP?
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sorted byI usually check Approved Used Cars from Skoda or Ford, 1 or 2 years old for example. Below it's a page where you can find the schemes from more retailers: honestjohn.co.uk/app…es/
I negociate with retailers to get 0% financing on the car over 4 years and a discount on service packages. For calculations, I compare the monthly payments + insurance with the car allowance after tax.
My aim is to have the car paid in 4 years time (including insurance and services), so that the 5th is profit. Then change the car.
Also, remember to write down how many business miles you are doing to claim the tax relief from HMRC at the end of tax year. (edited)
Four year lease and decide to move on in two to a job with no allowance, company car provided or WFH, obviously no idea what OP does, whilst you will probably still need a car do you really need an expensive lease that is no longer covered by employer? (edited)
Or if the company has rules about what you are allowed to get? plenty of firms have requirements like no soft tops/minimum age, 4 door etc
do you do many business miles, i do virtually zero so cash is king.
if its a cash allowance, it'll be a gross figure (ie taxable), so its upto you, do you want a new flash, reliable or a cheap car.
my car allowance is invested in a ISA stock and shares monthly. i doubt it'll ever go to buy a car.. (edited)