Company Car: Calculating my 'break-even' MPG..

[P-Ride]

Hi, I recently took collection of a 1.4 TSI Scirocco in Candy White with tinted windows and the new 17"s..

Absolutely delighted with it and get a lot of compliments; my only concern is its efficiency.

Specifically, the new breed of TSI engines (across many of the German cars on our list) which essentially have the same performance/efficiency as a larger engine, but get reimbursed purely on CC.

For example my Scirocco has a BHP and fuel efficiency you might expect from a 1.8l car, but I get the bottom reimbursement from my company (sub 1400CC) - as if it's a Vauxhall Corsa!

I made a little calculator on Excel to determine what MPG is my 'break-even' point so I'm not losing money as I drive.

If you guys could check my maths is correct that would be great.

Fuel cost = £1.35 litre (can adjust this cell accordingly)
Fuel cost/l x 4.546 = Fuel cost/gallon
- My company pays me 12p per mile
So fuel cost per gallon (£6.14) divided by reimbursement per mile (.12) = 51.1425

So I have to hit over 51MPG to be breaking even..

- Firstly, is my maths correct? I got a little confused on the final step.

- If so, that seems pretty poor reimbursement. I can hit 51mpg cruising, but any kind of acceleration whatsoever is way under..

Averaging about 35-40mpg on average.. 25mpg if i rag if; 45mpg if it's a long motorway..

Any other thoughts?

[Cuprabob]

From what I can see your arithmetic is correct.

[ZephyR]

The rate you are being paid will not cover your fuel costs. I get a car allowance to use my own car and get about 40p per mile plus a lump sum.
My wife used to get something similar with her employer until she got a company lease car. Now she has no lump sum, has to pay £200 each month and only gets 9p per mile. Its cos its a company car.
Hope you don't have to do too many miles for work otherwise its going to cost you.

[goatboy]

Your sums look right to me too....

But lets put it another way.
At best you are going to average 40mpg.

A gallon of petrol cost 130p x 4.546 = 614p
So cost per mile => 614 / 40 = 15.35p

So you will be loosing out 3.35p per mile

If you are doing 10k a year (business mileage) you will be £335 pounds a year out of pocket.

Sounds pretty rubbish to me! Even if you did drive a 1.3 corsa you still wouldn't get much better than 40mpg....

[P-Ride]

Most of my colleagues do around 20k miles a year, which will therefore be me too!

The reimbursement for 1400-2000CC cars is 15p per mile; which means a break-even point of 40mpg - perfect (driving very conservatively in light traffic I can get 35-40mpg)

It is SO obvious that the issue is relying on CC as a gauge for a car's power/efficiency, which is utterly flawed when it comes to TSI engines.

I checked and even my mum's Focus 1.6 averages around 38mpg, so I'm starting to conclude that my Scirocco really isn't too bad for efficiency - the issue is our reimbursement.

[P-Ride]

On the plus side, I thought my tax was £1200 a year.. Just found that as my base salary is under £35k, I get 20% tax which is £65/month.

So £780 tax + £770 in lost fuel = £1,550 a year. The only other figure on top is my personal fuel.

That's still fairly good value compared to buying and running my own car.. But am still going to explore avenues at my company to have the system changed..

[Stuartstev]

Remember you can claim tax relief on the difference between the rate your company pays you

Ie 12 p and the official rate which was 40p for 4000 miles then 25 p over that

[P-Ride]

Are you sure? Even as an employee given a company car?

How do I go about doing this?

Thanks

[Deagol]

Jump across to the Revenue website for general guidance - http://www.hmrc.gov.uk/paye/exb/a-z/m/m ... penses.htm" onclick="window.open(this.href);return false;

Watch out that the 40p per mile quoted by Stuartsev changed to 45p per mile. Also, don't forget the 5p per mile passenger supplement it relevant.

(No, I don't work for Jimmy Carr..... )

[maisbitt]

12p a mile is a liberty even for a diesel Roc. There is no way you should be in the position that you have to rack up miles for work and be out of pocket on every mile. I would definitely ask the relevant persons in your company if the rebate rates for business miles fuel allowance can be reviewed. Perhaps based upon the rules that they have you should've got a 2.0TSI or a TDI 170 unless your comapny wouldn't have allowed the more expensive models for your job (assuming that reimbursement by CC doesn't give lower than 15p a mile if it's a diesel). At 15p a mile you'd still have to average 42.4mpg @140p per litre for your fuel, which is pushing it in a 2.0TSI unless it's all motorway miles, but you'd probably be closer to being in the black on your fuel than your current situation.