Since most people also use their company car for personal use, it’s unsurprising that there’s a wide range of potential usage points to consider. For many, the luxury saloons that most people imagine a company car to be simply aren’t practical for everyday driving. You’ll also have to take into account additional factors like tax and your overall budget.
When choosing any company car, the amount of benefit-in-kind (BIK) tax that you’ll have ti pay should be a main consideration. This is based on the P11D, which is from the form filed by employers to the tax office as part of their Pay As You Earn registration.
The P11D value of a vehicle includes the list price, including all optional extras, VAT, any delivery charges that occur. It does not include the first year’s registration fee and vehicle tax. This is multiplied by your vehicle’s BIK percentage banding and then multiplied by your tax banding. While this sounds complicated, fortunately there are a number of online tools to help make the process easier to understand.
Working on a Budget
For those of us working on a more modest budget, getting a car from one of the German Big Three is simply out of our price range, even if our company is willing to subsidise the initial cost. Since fuel is by far the largest expense a driver has to deal with over the course of ownership, it’s worth researching which vehicles will be the most cost-effective in the long-run before you commit to a decision.
The 1.4-litre diesel Seat Ibiza, available from £9,495 from John Clark, is one of the cheapest company cars to run, with a low annual BIK tax and an official mpg rating just under 60 mpg.
Meeting Different Needs
Finally, if you’re in the market for something with more space, crossover vehicles like the Nissan Qashqai are becoming an increasingly popular. Unlike a traditional SUV, which are based off of trucks, crossover vehicles use the same kind of platform as a normal car. This gives you many of the main benefits that individuals tend to favour SUVs for, primarily more space, without having to compromise on poor fuel economy.
The Qashqai, in particular, comes in a range of both petrol and diesel engines that are highly efficient, especially the 1.5-litre diesel variant which delivers sub-100g/km in CO2 emissions to keep tax bills low.
When choosing a car for your business, it doesn’t have to carry premium brands like Audi, Mercedes or BMW. Choosing the one that suits your business’ needs is a more sensible and practical use of your company’s budget.
So, don’t shop for brands; instead, shop around and decide on a company car that ticks all the boxes in your checklist.