Advice needed on suitable towcar - suitable for company car use !!

[JonP]

Hi All, I have recently been given a real dilemma, and am completely lost.... Its time to renew my company car, and I've been told that i can pick any car with a P11D value of around £21,000 - £23,000 (with a bit of flexibility) and even more flexibility if i make a monthly contribution towards the lease contract....
I have a twin axle Bailey Pageant Loire, which has a MTPLM of 1642 kgs... I currently tow the caravan with a 1999 Landrover 110 Defender CSW, but its now done approx 165,000 miles, and being over 10 years old its starting to show its age... I promised the kids that I'd start taking them caravanning abroad, but due to the age of the Landrover, I dont feel confident that it will be reliable enough...
My company said that if i want to purchase my own car, then they will give me a monthly car allowance + 45 pence per mile for company business... After tax and NI, the allowance works out to about £250 per month in my pocket... However, that would mean i would have to purchase the car, pay all expenses like tyres, servicing, insurance etc out of this monthly sum.... That might sound relatively easy, but i wouldnt have enough cash to purchase a car outright, so would have to obtain some finance, which would also have to be paid out of the allowance
On the other hand, if i opt for a company car, i think that a Hyundai Santa Fe might just about be within reach, and also possibly a Kia Sorrento KX2....But..... we dont have fuel cards, and can only re-claim our fuel costs at 13 pence per mile.. in these days of rising pump prices, I have to drive fairly carefully to break even with my current VW Passat !!
So, do i try to find a tow car which i can also use as a company car (i do around 7,000 miles for work and 10,000 miles privately each year) and have the benefit of not having to worry about the car at all, but pay around £260 per month through tax for the privelege ?

Or, do i go for the absolute cheapest company car that i can possibly get, and try to replace the Landrover with something more modern to use as a private car for towing ?

Or better still, can someone suggest a company car which isnt as heavy on CO2 emissions as the Kia or Hyundai, but which is more car like, but beefy enough to pull my caravan ?? I got chatting with one of my customers the other day, and he is a keen caravanner, and says that he tows a Bailey Senator Louisiana with a Ford Mondeo, but is towing a twin axle van with a 'normal car' really feasible ??

I suppose the last solution is to maybe get rid of my current caravan and get something smaller

but we love it, and I'd only want to get rid of it as a last resort....

HELP !!!!!

 

[ValA.]

We had similar dilemmas. OH had a company car, and we could have chosen virtually anything, but in the end went for the 'minimum tax/still big enough to tow our caravan' option, which was always a Mondeo. We were more fortunate than you in that we had a caravan which the Mondeo was more than capable of towing. If we stuck to the Mondeo we also got a substantial cash payment for having a car which was less than we were allowed - and this paid for our holidays!
These days it's increasingly difficult to 'choose' your company car, balancing tax, costs, power, usefulness - and I don't envy you having to try to decide.
Perhaps someone with more relevant size/weight/costs may be able to help more. Otherwise, a downsized caravan may not be as bad as you think - especially in view of generally rising costs. OH was made redundant a couple of years ago, just prior to retirement age, but we bought another Mondeo and can now happily carry on caravanning despite fuel rises, etc.

 

[MichaelE]

The 45p per mile is tax/NI free and at 7000 business miles a year would give you a tax free return of approx £260 a month , add this to your monthly car allowance.
Dont forget that although you pay car tax you hand the car back, but when you purchase yourself the car is your at the end and you feel like your company have bought it for you.
Also company cars are an easy target for the Government so the amount you pay will always increase.
With cash in your pocket you could choose a nearly new better car and much cheaper as someone else has taken the hit on it.
Some of the deals on new cars at the moment include cheap service deals or even free for 3 to 5 years.

 

[Shirker]

The 45p per mile is tax/NI free and at 7000 business miles a year would give you a tax free return of approx £260 a month , add this to your monthly car allowance.

But you only get the 45p a mile for driving on company business, and HMRC only allow 45p as that's what they think is the true cost to the car owner of that mile, taking into account fuel, maintenance costs, etc. Unfortunately you make very little profit on it so can't add it to the car allowance as it's just in one pocket but out of the other.

 

[JonP]

Thanks Val, if we were restricting our holidays in future to just the UK, I would happily continue with our Landrover.... I think part of the decision is going to come down to insurance costs, as a friend of mine has just told me that to insure your private car for business use is getting quite expensive.... as you say, maybe someone can suggest a suitable towcar for my existing caravan which wont cost me a fortune in company car tax !! I suppose, in a way, if you have a company car, if the unthinkable happens and i get made redundant or something, then i can just give the car back, and walk away, without being saddled with repayments / finance on a private car which i could no longer afford..

 

[JonP]

Thanks Michael & Shirker... both good points.. the only thing is, that i dont have a lot of spare cash to purchase a car privately, so the only finance deals that i can see to purchase a reasonably new car, which would be roughly in line with the monthly allowance, involve a 'balloon' payment after 3 years, where you either have to pay a settlement figure or walk away... decisions decisions !!! Sometimes I wish they would just tell me what car i can have a leave it at that !!!!

 

[Mikey_74]

Not a car for everyone but I like them, have you considered a Kia Sedona Jon? Minimum Kerb weight of over 2100kgs which is more than enough for most vans including yours and yet can still manage between 32 and 50mpg,and is under £20k, The 2.2 engine is a superb unit and is the same that is now fitted to both the Santa Fe and Sorento that you've mentioned but with better economy due to not being a 4x4, as for the company car tax side of things I'm sorry I haven't a clue how this would work out, but this is a car that is high on my list for my next tug.

 

[JonP]

Thats not a bad shout Mikey... i have just looked it up on our car list, and its showing 'Kia Sedona Diesel Estate 2.2 CRDI - 5 door' with P11D value of £22,809 and 179 for the CO2 emission (g / km) and average consumption of 42 mpg... the emission is slightly high, but as you say, its exactly the same engine as the Santa Fe and Sorrento, except cheaper list price than both.... that looks really promising.. I'll have a look into it..
Any other suggestions more than welcome !
Thanks for your help, Jon...

 

[Martin24]

Cheapest possible heap of a company car and go get yourself a new 110 while you still can before the new one with all it's electric gadgetry comes out!! Biased?? what me??

 

[Wendy-Norfolk]

Personally I wouldn't worry about a Land Rover being 10 years old and done 165,000 miles, as long as it has been well maintained, mechanically sound, I'd take it abroad!

We drove solo down to the Costa Blanca in Spain a few years ago, four adults, four children, luggage on the roof, 30 year old long wheel base LR - great fun!!

 

[JonP]

Wendy & Martin, I have to say that I tend to agree with you.. I have had a Landrover since the age of 16, and learned to drive in one, as did my wife, and we have owned a variety of Defenders ever since.. in fact we have never been without one for the last 20 years... we absolutely love them, and when i told my 10 year old daughter we might have to get rid of it, she started crying !!! No offence to Discovery 3 and 4 owners, but our local independant garage said he struggles to service them at a reasonable cost, and he reckons the average repair bill is £600 - £1000 depending on what has gone wrong - I'd love one as they are great towcars, but I'd be worried that there would be very little i'd be able to do mechanically myself.. As much as i love Defenders, it could do with being a little more 'user friendly' because for some reason i get aching shoulders when i drive long distances.... A small price to pay perhaps when you drive an icon of British engineering

 

[weejock]

Reading through your post I did not see at which rate you pay tax. This will have the most effect after the inital purchase price and emission levels of the car.
If you opt for the company car I would personally advise against anything over 145g co2. To this end I have restricted employees this year to greenline Skoda models as we have a budget at the end of the month and current thinking is this is one area that will have a few changes. You have also missed out another option to you and that is personal lease. Magazines such as Autocar normally have a selection at the back of the mag of hot lease deals. However be very sure to get your projected milage correct as penalties can be stiff. If you go private ask you employer to put you in touch with their insursurance broker if possible so that you can get your entilted company accrued no claims bonus.
Buying private also brings other pitfalls depending upon how you use your car when doing company work. Your employer may not be too taken with a dukes of hazard paint job on your latest Aussie uke

However certain cars such as an E220 estate can make a great towcar but return good fule consumption and reasonable running costs. If a vehicle like this has a full MB service history it will also be covered by mobil life further taking away some concerns over future costs you may have.

In reality at this current point in time there is not a great financial difference between the 2 if you are just after a bog standard car. It is the fact that you are looking to tow that changes things for you and going private opens up a wider range of choices. Do keep in mind your milage and have a good look at 5 series estates etc (for fuel consumption, tyres etc) before heading down the 4x4 route.
Unfortunatley no motoring is free

 

[JonP]

Thank you very much for your advice Wee Jock.. I think that considering the complexity of the problem, and the fact that i'll be saddled with the car for 3 years, I need to take a more scientific approach.... I looked at it in fairly simplistic terms, and just thought that for a 4 x 4 (like a Santa fe)costing around £25k with 176 CO2 emissions, I'd probably pay around £260 per month in co. car tax.... I then thought that there'd be fairly few vehicles large enough to tow the caravan (and relatively new) which I could tax, insure, service etc (and pay loan repayments on) for the same price..... however, having done some sums for a 4 x 4 with an average of say 40 mpg (combined), and fuel prices in our area being £1.45 per litre, it would cost me £6.60 (£1.45 x 4.54609) per gallon of fuel, and I'd be able to claim 13p x 40 = £5.20 back through my expenses... so by using a 4 x 4 at todays prices (say 16p per mile), and considering last years business mileage (7000 miles), I'd pay around £210 for the priviledge of carting our overseas sales team around the countryside

When i consider that currently (for UK holidays) i only do around 2500 miles each year towing the caravan, getting a towcar as a company car might not be the way to go.... back to my excel spreadsheet !!!!

 

[Maric]

Hi, if you do decide to purchase your own car don't forget to submit a P87 to HMRC. Basically it entitles you to claim the tax back on the difference between what your employer pays per mile and what HMRC allow, currently 45p for the first 10,000 then 25p thereafter.
http://www.hmrc.gov.uk/forms/p87.pdf

 

[ProfJohnL]

Hello Jon,

May I suggest another possible option.

Clearly you like LR and apart from its high mileage its very capable and meets your needs.

Rather than looking for a company car that has the towing capability, look for a smaller one that simply meets the needs of the company, and retain the LR for towing.

 

[Dustydog]

Jon
I had a company car for 30 years and paid HMRC a fortune. Five years before I packed up they did away with comapny cars and gave us a generous car allowance, £500 a month.
How my eyes were opened. I now have full ownership of the car, it has a residual value so in effect for me I got exactly what I wanted and the firm paid for it!.
Don't forget you don't have to buy brand new one. Plenty of clean nearly new landies out there. My brother got a LWB 110 ex army , low mileage for a good price.

 

[JonP]

Thanks Prof & Dusty - i can see that i am going to have to do some serious thinking about this... Having always had a company car, i really like the thought of not having to worry about tyres, repair bills, breakdown etc.... I'm having a scout around at the moment to see if i can get a 2006 110 TD5 with low miles at a reasonable price, and see if i can work that, and a smaller company car into my limited budget

... as someone said before, no motoring is free.... its trying to keep the costs to a minimum that is proving a real challenge !!!

 

[DaveG2]

Try Vauhall Insignia Estate SE CDTI with factory fitted towbar kerb weight is 1918 Kg, 158 BHP and 258 ftp torque!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

[ProfJohnL]

Hello Jon,

You are quite right - motoring costs, and it is difficult to keep costs down.

My thoughts were that keeping the company car as small as possible and hopefully any P11D charges small, the savings will help fund a second car/LR.

Obviously there are overheads such as road fund tax, and insurance, but with careful planning, you may be able to SORN the LR for half the year, and by agreeing to limit your mileage you may be able to get a more attractive insurance deal.

Defenders are not overly complex so I am sure you should be able to find a local independent garage for servicing.

I hope you are able to juggle everything satisfactorily.

 

[Martin24]

Hey Prof we're in agreement!!!!! wow!!!!! Shame to lose a defender owner too!! Having just completed the first tow (280 miles each way) You wouldn't get me or swimbo to tow with anything else now!

 

[MrBell]

If you want to know what tax you will pay on your company car, go onto HMRC's website as there is a calculator on there which allows you to work out what the car will cost. The best thing to do is get somthing like an Aygo to do your driving for work as they dont cost much in company tax and save your pennies for a LR.

 

[Tony_5041742]

I've recently parted company with my company Ford Galaxy, great towcar but didn't want another as the tax was getting silly. As others have said, taking the cash allowance or a company car is now a complex decision and really needs some time playing with Excel to aid the decision making process. The conclusion I came to was that company cars work well if you can find one with low (ideally sub 120g) co2 levels. However, given I need something that will safely tow a 1600kg caravan all the company car options I came up with also came with high list prices and co2 levels, which combined to come up with unacceptably high tax bills. So, as others seem to have done, I bought two reasonably modest priced cars, both around £6k each, an Astra for everyday driving and a Sorento to tow the caravan. OK I've got two lots of insurance, excise duty, repairs, mots etc to find, but compared to the tax on something like a £30k Ford Galaxy I'm still saving a fortune and I've also come out of the change with a "spare" car for family use etc.

Having said that, I know some people like having new cars and wouldn't be happy running around in a 4 year old Vauxhall and a 7 year old Sorento, after 25 years of new company cars this doesn't particularly bother me but each to their own etc.

 

[JonP]

Hi Tony, thanks very much for your advice... I am not going to make a proper decision now til after the budget later this month... As mad as this might sound, I am thinking at the moment that i might go for a new Hyundai Santa Fe, and then try to get a bit healthier and bike to work a couple of times per week

... the days when i am biking to work, my wife can use the Hyundai, and then the use of the Landrover will be at an absolute minimum.. Keeping the Landrover might seem like a strange decision, but aside from holidays, we only do 30 - 50 miles in it each week, so were able to approach a specialist Landrover insurer and get a limited mileage policy limited to 5000 miles a year at just over £200.... At a little over £430 (insurance, tax and MOT) + fuel costs each year, the difference between the Landrover @ 25 mpg (urban) and a smaller car which has 35 mpg (urban) over 5000 miles is about £385 at todays fuel prices, and the advantage is that most things on the Landrover I can fix myself if they go wrong... Especially if its being used locally, we can probably get round most of the problems that occur, and i would also have an emergency tow vehicle if i lost my job, or had to move around a heavy trailer. The thinking behind the Santa Fe is that its probably got the lowest P11D value of all the ones I have looked at (around £23k) and average emissions and fuel economy for a vehicle of its size... plus i dont have to worry about breakdown, insurance, servicing, tyres, taxing etc...

Anyway, before making any hard and fast plans, lets see how badly us hardworking folk are hammered by Mr Osbourne on the 21st March !!