Servicing Costs

[zilch]

I'm looking at getting a Prius in the near future. I am deciding over buying the car myself or getting it via my company car scheme. I'm currently pulling together the relevant costs and would like peoples opinions on what sort of costs I could expect over the first four years of ownership. I would expect to do no more than 10,000 miles a year.

Currently it looks like it would be much more cost effective to get the car myself. But there are other non cost issues that I'm trying to take account of as well.

If anyone has any points for or against either option I would be glad to hear them.

Cheers.

[Braindead]

Had mine 2 years and covered 31,000 miles

Tax 65 per year

Insurance variable but low. Group 8 I think.

Assume 50pmg average

Club Toyota £55 per year which gives you the best RAC cover available.

Servicing costs are low. I think I paid around £130 for the 20k and £80 for the 10k and 30k.

Front tyres seem to last around 30k and cost about £80 each. Rears look OK at 30K

Depreciation - the industry doesn't seem to be giving the Prius very good residual values but reality seems to be that they hold their value well. Some research probably needed.

No congestion charge in London £5 a day?

Free parking in Manchester city centre?

That nice, smug feeling - priceless

[KMO]

£8 a day for congestion charging now...

Don't forget the company car tax rate is only 12% for the Prius. Make sure you properly distinguish net vs gross payments. I can do the sums for you if you like, if you want to provide the figures for the company car scheme (P11d value, lease rate, allowance, your marginal tax rate, etc).

We got it as a company car - it looked pretty even in terms of cost between buying outright new and taking a 4-year company car with option to buy at the end (although it'll depend what exactly they ask us for it at the end - hopefully the unrealistically low book prices you see will work in our favour there).

Neither of us had any no-claims bonus, which skewed the private insurance against us somewhat. We also liked the hassle-free element of having the company/leasing firm look after it.

[zilch]

Thanks for the info & comments.

I'm ok working out the tax arrangements but thanks for the offer KMO as it is a bit complicated if you don't know what you are doing.

The company car scheme works out at a 3 year cost of £18,295 for a T4 (or £21,618 for 4 years). At the moment, they won't give me what the buy back value will be but I think that I can get something out of them.

I can also get a company PCP scheme which looks very competitive.

As braindead says in his sig "My Brain Hurts" all I do know is that I want one of these beauties :)

[Braindead]

I bought mine using my company car allowance so it's simpler for tax. The only downside I've found it that when I claim mileage I can only claim the rate for a 1500cc car. However, I claim back the difference between what the corporation pays me and what the Inland Revenue allow as a mileage rate for using your own car as extra tax allowance.

[KMO]

£21618 sounds a bit steep for 4 years. Is that a gross figure?

Hmm. Our T Spirit had a nominal lease cost of £446.06 a month - or £21411 over 48 months.

But what with all the tax calculations, taking the company car option (instead of the allowance as cash) only cost us £16592 of take-home pay. (Actually a bit less because they passed on the PowerShift grant, but that wouldn't apply to you).

Working:

Car allowance = £286 per month (£13728 over four years)

Allowance would be worth £13728*59% = £8100 if taken as cash (less 40% tax, 1% NI)

Lease cost = £446.06 a month

List price = £20217

Additional Private Use Charge = £446.06-£286 = £160.06 per month = £1921 per year (from net pay)

= £7683 over 4 years

Benefit in Kind = £20217*12% - £1921 = £505 per year

Tax hit from BIK = £505*40% = £202 per year = £808 over 4 years

Total net cost over 4 years =

£8100 lost allowance

+ £7683 additional PUC payments

+ £808 company car tax

= £16591

(And in our case, the PUC was reduced by £700/48 to pass on the PowerShift grant, but that meant it got taxed by 40% odd).

[zilch]

I don't get a car allowance as a seperate part of my salary, it is just included in my base pay. So using your terminolgy my calculations are..

Three Years

Lease amount = £524.75 pm

P11D value = £18,891

PUC = 524.75 = 6297 py = 18891 over 3

BIK = 2267 – 6297 = -4030

Tax from BIK = -1612 = -4836 over 3

Cost – 18891 – 4836 = £14,055

Four Years

Lease amount = £464.50 pm

PUC = 464.50 = 5574 py = 22296 over 4

BIK = 2267 – 5574 = -3307

Tax from BIK = -1323 = -5291 over 4

Cost = 22296 – 5291 = £17,005

They sound right given your figures are a for smaller lease cost & the larger list price.

[KMO]

Not quite following how your scheme works. Are you making the lease payments directly from your take-home pay (in which case it's just a private lease, so there's no company car tax), or is there the option for the firm to make them for you, deducting it from your gross pay?

If the latter, then your calculation should be:

Gross pay lost taking the option = £464.50 pm = £22296 over 4

Net pay lost = £22296 * 59% = £13155 over 4 years

There's no private use charge - you're not personally paying anything towards the car. Instead it's a pure benefit in kind, in lieu of salary.

BIK = £18891 * 12% = £2267 py = £9068 over 4 years

Tax from BIK = £9068 * 40% = £3627 over 4 years.

So total net cost =

£13155 lost pay

+ £3627 BIK tax

= £16782

Still seems a bit pricey for a T4.

[Braindead]

Heck this sounds over complicated.

We just get an allowance that is added to our salary and taxed as part of our salary.

It's then our responsibility to provide a car suitable for use at work. If we do use it we get a milage rate to cover fuel etc. It is effectively using our own car for business use.

The tax is simple...it's just treated as pay.... and how you finance a car is down to you. In my case I use my allowance to pay back a loan I took out to buy the Prius. I didn't go for an HP or PCP scheme as the residuals on the 04 Prius were stupidly low when they first came out. Not sure how they are now.

I wish you luck in your tax minefield :D

[KMO]

Yeah, it's fun, Braindead. Did my head in when I first looked into it.

The Prius does win when doing it this way. Note those numbers - if the leasing company wants £22,296 for 4 years (extortionate, but it'll do as an example), then it would cost you £22,296 if you were taking out the lease yourself. But let your employer pay the lease, taking it from your gross salary, as in my last example, and the Prius will only cost you £16,782.

If the Prius had been a more polluting car at the same price, say a low CO2 diesel, then you'd be charged at 18% tax, so it would be £18,596. And if it was a high-CO2 Land Rover or something daft with 35% tax, it would be £23,734.

But then you've got all the other factors - in our scheme the leasing costs for Toyotas were much higher than those for Vauxhalls (relative to the nominal list price of the car). And the Prius is more expensive than "equivalent" cars anyway. And there was the grant (now suspended)...

[zilch]

Not quite following how your scheme works. Are you making the lease payments directly from your take-home pay (in which case it's just a private lease, so there's no company car tax), or is there the option for the firm to make them for you, deducting it from your gross pay?

If the latter, then your calculation should be:

Gross pay lost taking the option = £464.50 pm = £22296 over 4

Net pay lost = £22296 * 59% = £13155 over 4 years

There's no private use charge - you're not personally paying anything towards the car. Instead it's a pure benefit in kind, in lieu of salary.

BIK = £18891 * 12% = £2267 py = £9068 over 4 years

Tax from BIK = £9068 * 40% = £3627 over 4 years.

So total net cost =

£13155 lost pay

+ £3627 BIK tax

= £16782

Still seems a bit pricey for a T4.

Your second example is right and is what I got first time I did it before confusing myself with your first working out.

It is quite pricey, against a focus, golf or an astra on the scheme. However where it comes out quite well is in the residual cost after 3/4 years. At the moment they are saying around £5500 after 4 years and 48,000 miles to buy the car so at £22K That fairs quite well against buying privately and running the car myself. Buth then again in four years time if the price is holding up better then that may work against me.

Given the precarious nature of the business that I'm in it does sway me towards the company car option. But then again.....