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Lizzy D update

Help and discussions for strategies to get out of debt
vrdiver
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Re: Lizzy D update

#62070

Postby vrdiver » June 22nd, 2017, 9:15 pm

lizzydripin wrote:Hi vrdriver

I am totally anti pcps and we have never owned a new car so unlikely to go down that route :)

OH was actually looking at the VW golf diesel so will pass on what your thoughts on that

Many thanks
Lizzy


I have a Golf BlueMotion estate and love it. What I have not done is have the "fix" applied, despite several invitations from VW. If he can be assured that the fix has NOT been applied then I'd recommend it, but otherwise, it's an unknown risk which makes past performance no indication of future reliability :lol:

lizzydripin
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Re: Lizzy D update

#62072

Postby lizzydripin » June 22nd, 2017, 9:21 pm

Hi vrdiver

Thank you for that info, can you tell me if company cars were a better deal?

Thanks
Lizzy

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Re: Lizzy D update

#62082

Postby Clitheroekid » June 22nd, 2017, 9:57 pm

lizzydripin wrote:Looks like we might have a few difficult days as my car is going to the garage tomorrow and not sure if it will be staying or coming home and OH will have to give his back tomorrow. Now we know that his job is not coming with a car though we will prioritise getting something for OH.

Firstly that's great news about your OH having got a job, I'm very pleased for you both :D

However, I don't think that his employer can ask for the car back tomorrow. I understand he was made redundant at the beginning of June, and bearing in mind his length of service he would be entitled to 12 weeks' notice.

During that notice period he's entitled not only to his pay but also to any other benefits that were part of the job - including use of the car.

Even if they've put him on garden leave - i.e. told him he doesn't have to turn up for work - he can still keep the car provided he was allowed to use it for private mileage as well as business mileage.

vrdiver
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Re: Lizzy D update

#62175

Postby vrdiver » June 23rd, 2017, 10:45 am

lizzydripin wrote:Hi vrdiver

Thank you for that info, can you tell me if company cars were a better deal?

Thanks
Lizzy


It's been a while since I had a company car, having always elected for the car allowance whenever offered (I'm not a petrolhead, nor do I care what people think of the car I drive). The taxation for company cars has however just changed and, as I understand it, HMRC will now tax you on THE GREATER OF the car allowance or the Benefit In Kind that the car is deemed to be worth. (So if his BIK is less than £4,500pa, he will still pay tax on £4,500. There was a separate thread on this - see viewtopic.php?f=49&t=5698)

From Parkers:
For 2017/2018, the lowest benefit-in-kind (BIK) levy will be 9% - reserved for cars producing between 0-50g/km of CO2 – while the highest will be 37% for those producing 190g/km or more. (see the full article for details that apply to any cars your OH is considering: http://www.parkers.co.uk/company-cars/2 ... 17-budget/ )

For ultra low emission cars that's a pretty good deal (except where the employee has a car allowance alternative, see above), whereas for anything else I think it's expensive, but others may not. The real difference, in my mind, is in where the risk lies; with a company car, if you drive it into a ditch, or an idiot drives into the back of you, you just pick up the phone and fleet management deal with it and send you a replacement, pronto. If it's your own car however, you're on your own with whatever insurance package you've taken out. In exchange for taking the risk on, you get to keep more of the money (it's usually cheaper, barring real bad luck; you also end up owning the asset, whereas a company car driver has less hassle, but doesn't own the car and is less well off).

If buying a car, note that the road tax rules will be different depending on date of first registration (pre or post April 2017) You can check here: https://www.gov.uk/vehicle-tax-rate-tables.

One other point about company cars: if they are leased on e.g. 3 year / 30,000 mile deals then some companies will swap cars between high and low mileage users so as to avoid penalties from the leasing company. Might be worth checking, as that took the shine off of having a company car for some!

In summary, over time, a company car is a hassle free way of driving a newer car, but comes with a higher price tag than taking the cash and choosing to drive an older car. The car allowance route is generally cheaper if you accept the car will be older (on average) and comes with more hassle (tax, insurance, servicing etc). Risks are also different: company cars can be taken away at short notice, leaving you in the lurch, whereas private cars can incur costs that you have to pay for.

For me, the trick was to be really strict about setting aside the car allowance and mileage claims, keeping that money specifically for running the car and saving for the next one.

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Re: Lizzy D update

#62384

Postby lizzydripin » June 23rd, 2017, 10:21 pm

Hi Clitheroekid, Thank you for the good wishes :)
The conclusion today has been that we can keep the car for another month which is a big relief, we were told we would need to insure it but we couldn't do that as it isn't ours so they ave agreed to keep it insured for a month. We have the house at low rent for the three months notice period then it is rising to £500.00 per month for I think 12 months or it may be 9 months. He is to get £12,700.00 redundancy plus a bit more still tbc.
He has to go in once more on Monday then that should be it. We will need to buy a new car before the middle of next month and OH pretty much has decided on a diesel golf but I would also like to consider the Toyota auris so we will see.

New job starts in around a months time.

We will be using some of the wages owed and redundancy to buy the car (We have not yet agreed what to allow for this), we will also pay off the final part of the credit card and help my two student sons to pay of there student Overdrafts.

I am working on a new budget/soa :)

vrdiver, Thank you for all the info on company cars etc. it seems that oh will be getting, as part of his wage an allowance of £4500.00 so I think it is a way dodging the contributions etc as you say. Have looked into the insurance and business use doesn't seem to put it up too much. I think we are going to buy a car outright with the redundancy so then I guess we will just treat it as wages and make sure the insurance etc is paid monthly so it is budgeted!

Many thanks
Lizzy

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Re: Lizzy D update

#62405

Postby swill453 » June 24th, 2017, 5:28 am

lizzydripin wrote:vrdiver, Thank you for all the info on company cars etc. it seems that oh will be getting, as part of his wage an allowance of £4500.00 so I think it is a way dodging the contributions etc as you say.

If he doesn't get any business mileage paid by his employer then he can claim tax relief on the HMRC approved rates. This would be via his Self Assessment return or by informing HMRC in some other way.

Scott.

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Re: Lizzy D update

#62560

Postby lizzydripin » June 24th, 2017, 5:05 pm

HI All,

Just got back from looking at cars, we went with a budget of £8000.00, but OH has been seduced by the idea of a pcp plan on a newer and perhaps more reliable car. he seems to think he needs to spend the car allowance on a car and its maintenance package or it will be reduced, not sure if that is true?

So he is between the Toyota Aurus 2015 estate hybrid petrol, at £16,800.00 - £5850.00 deposit then 36 months at £144.00 and final payment of £6600.00 of which overpayments can be made.

Or Nissan Qashqai 2016 diesel, at £15,789.00 deposit £6000.00 then 36 payments at £169.91 ballon payment £6645.00. overpayments can be made.

I haven't completed an soa yet but basically OH's new wage is £35,000.00 plus £4,500.00 car allowance.

We will have paid off other debt with the redundancy and the rent will rise from £500.00 to £800.00 after twelve months.

Is this complete madness?
Thanks
Lizzy
Last edited by lizzydripin on June 24th, 2017, 5:18 pm, edited 2 times in total.

redsturgeon
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Re: Lizzy D update

#62563

Postby redsturgeon » June 24th, 2017, 5:15 pm

lizzydripin wrote:HI All,

Just got back from looking at cars, we went with a budget of £8000.00, but OH has been seduced by the idea of a pcp plan on a newer and perhaps more reliable car. he seems to think he needs to spend the car allowance on a car and its maintenance package or it will be reduced, not sure if that is true?

So he is between the Toyota Aurus 2015 estate hybrid petrol, at £16,800.00 - £5850.00 deposit then 36 months at £144.00 and final payment of £6600.00 of which overpayments can be made.

Or Nissan Quashqui 2016 diesel, at £15,789.00 deposit £6000.00 then 36 payments at £169.91 ballon payment £6645.00. overpayments can be made.

I haven't completed an soa yet but basically OH's new wage is £35,000.00 plus £4,500.00 car allowance.

We will have paid off other debt with the redundancy and the rent will rise from £500.00 to £800.00 after twelve months.

Is this complete madness?
Thanks
Lizzy


Possibly!

My personal belief is that as in the USA the PCP car purchase thing will blow up big time. People are just renting a car long term rather than buying and using that fact to drive a car newer and flashier than they could otherwise afford. OK when things are going well but what if OH loses his new job...he still has the regular payments on the car or he loses that too.

Far better to spend the money you have, sorting out the debt issues and then see how much money you have left for a car.

For your 8k budget you could easily buy a car that will suit your needs and give you some of that £4.5k a year to put in your own pocket...make your car work for you rather than blowing the whole budget. Also if the job goes, you still have the car.

We have three cars in our family, a brand new £35k BMW hybrid that we run through the business, a £5k 2 year old Fiesta for the kids and a £1k ML Merc for trips to the dump and moving large objects or lots of people. I actually enjoy driving the old Merc most and it is great not to have to worry about damaging it. As it has a 3.2 litre V6 petrol engine though I wouldn't recommend it for your needs.

Please consider your original plan...you know it makes sense.

John

vrdiver
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Re: Lizzy D update

#62586

Postby vrdiver » June 24th, 2017, 7:03 pm

I'll second John's points: make the car an earning asset, not a depreciating risk. If your OH's new job fizzles out and it takes a bit longer to find the next one, where would that leave you? Having had the stress and worry of no job, potentially forced out of the home and still paying off debt, this new opportunity seems like a perfect time buckle down to some saving and debt clearance. Overspending on a car will be a thrill for a month or two, but the cost will carry on far longer.

Re the car allowance: no, it is treated just like regular income; the employer is not entitled to know whether you paid for the car in cash, and are restocking your savings from the allowance, spending less, more or the same, just as in the same way that they don't care what he pays for fuel to run it, they will pay a standard allowance per mile of business mileage.

I know it's nice to borrow the money, drive the shiny car etc. but PCP deals are designed to make you think you can afford something that actually may not even be a good deal, let alone affordable.

I just found* an Auris hybrid (2015, 20k miles) for £12699, or a petrol 2014, 20k miles, for £9k. Either of these would leave you with the £250 after-tax car allowance to plump up those savings...

Think long and hard before signing.


*(http://www.fow.co.uk)

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Re: Lizzy D update

#62622

Postby vrdiver » June 24th, 2017, 9:16 pm

lizzydripin wrote:...

vrdiver wrote:... this new opportunity seems like a perfect time buckle down to some saving and debt clearance.


I just reread that and realised it comes across as judgemental and rather oafish. I apologise, and recognise (from other posts elsewhere) that you have worked hard, both in declaring your problems (no mean feat in and of itself) and also in addressing said debts and working towards a good solution - to which you are really close, down to your own efforts.

What I really meant to imply was that now is a time to not get distracted, but finish the job you started and have done so well at.

Best regards
VRD

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Re: Lizzy D update

#62639

Postby Clitheroekid » June 24th, 2017, 11:02 pm

vrdiver wrote:I'll second John's points

And I'd third them.

It was only a few days ago that you were looking into the financial abyss. It's great that your OH has got himself a new job so quickly and at a decent wage. It's also understandable that you'll both be feeling flush and relieved to think that you can actually spend some money without having to worry for a change.

But without wanting to rain on your parade there are risks in life, and one of them is that for whatever reason your OH's new job doesn't work out. If he doesn't like it or his employer decides he doesn't fit in or goes bust you would be back in the situation you were those few days ago, but this time having blown a fair chunk of the redundancy payment and with the additional burden of these lease payments on top of everything else.

Bear in mind that if the job does finish for some reason then during the first two years your OH has effectively no employment rights at all, and there will be no redundancy package this time.

These days cars are generally very reliable, and one that's 3 or 4 years old can probably be expected to run for many years without any major problems. If you stick to those with a good reputation for reliability like Toyota or something from the VW group you may well have no significant repair costs at all.

You could probably buy a perfectly decent car for not much more than the £6,000 that you're thinking of using just as a deposit on a lease car.

You will also then have an asset that can, should the worst happen, be sold for probably not a lot less than you paid for it, unlike a lease car.

I hope you don't think I'm being unduly pessimistic. Unfortunately it's an occupational hazard of being a lawyer - I tend to see people when things have gone wrong for them a lot more often than when things have gone right! ;)

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Re: Lizzy D update

#62736

Postby WrenChasen » June 25th, 2017, 3:12 pm

The other problem with PCP (which might have been mentioned earlier, but I haven't seen it) is mileage. At the start of a contract you would be asked to specify your yearly mileage, say 10,000. If you exceed that mileage there will be an additional charge of 7-10p for every mile over 10,000. Also, if there is excessive wear and tear (dinks in the bodywork, very untidy interior, etc) you could be liable for repair costs.

New cars are seductive, the way they gleam, the pristine interior, and the smell - never under-estimate the lure of the new car smell!

Might I suggest you persuade your OH to buy something older and reliable for cash and enjoy sleeping at night?

lizzydripin
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Re: Lizzy D update

#62818

Postby lizzydripin » June 25th, 2017, 8:15 pm

Hi All

Finally worked out how to use the quote system :)

redsturgeon wrote:My personal belief is that as in the USA the PCP car purchase thing will blow up big time. People are just renting a car long term rather than buying and using that fact to drive a car newer and flashier than they could otherwise afford.
redsturgeon wrote:Please consider your original plan...you know it makes sense.
I am in complete agreement, personally this is not a route I want to go down, I do not like PCPs the fact you still have such a large sum at the end of the contract is most worrying basically you are buying the car again or so it seems to me, might as well just buy now a car that is three years older. I knew the answer when I asked the question, just wanted my thoughts to be verified really I have been trying to persuade my son not to go down the PCP route. The car sales people just start on this right away and totally ignore the budget you quote when you walk in :( I think I did wonder if I was being unreasonable hence the question really

vrdiver wrote:I know it's nice to borrow the money, drive the shiny car etc. but PCP deals are designed to make you think you can afford something that actually may not even be a good deal, let alone affordable.
I don't really think it is I am really not into shinny new cars for me personally a car just does the job, unless it is a landrover of course :) I know OH thinks he will be spending a lot of time in the car so would like comfort and reliability
vrdiver wrote:vrdiver wrote:
... this new opportunity seems like a perfect time buckle down to some saving and debt clearance.
vrdiver wrote:I just reread that and realised it comes across as judgemental and rather oafish.
not at all, I value all advice given and am more than happy for honest opinion.

Clitheroekid wrote:I hope you don't think I'm being unduly pessimistic.

No I think you are being a realist :) We have been on a bit of a weird high for the few days after OH got his new job with the odd low due to all the changes and uncertainty we have been through and maybe you do lose a bit of sense when your emotions are up and down. Thank you for the sound advice.

WrenChasen wrote:Might I suggest you persuade your OH to buy something older and reliable for cash and enjoy sleeping at night?

This is my preferred course of action, just need to find a good compromise car that is good for long journeys and reliable.

I think basically to start this new chapter in our lives the right way the last thing I want to do is take out more credit. I want to be debt free and adding to the savings pot, we have had some bad experiences in the past with really cheap cars, notably a sierra that lasted about two weeks before being towed off to the scrap yard, but with any luck we have enough money to buy something reasonable and reliable. I think OH will see the sense of this so hopefully we can make a sensible choice.

Many thanks
Lizzy

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Re: Lizzy D update

#62959

Postby tsr2 » June 26th, 2017, 1:29 pm

lizzydripin wrote:Hi All

WrenChasen wrote:Might I suggest you persuade your OH to buy something older and reliable for cash and enjoy sleeping at night?

This is my preferred course of action, just need to find a good compromise car that is good for long journeys and reliable.


One area of compromise without sacrificing reliability might be to buy an older car, but low mileage. Our main car was ex-Motability and we were able to pay around half the new price for a 3 1/2 year old car with less than 2000 miles on the clock. If you look on autotrader, you can play with the search parameters and see what you can get. e.g. a search for cars with less than 20,000 miles on the clock and a price less than £8,000 comes up with quite a lot. A lot of those cars aren't motorway cruisers, but you should be able to find some that are.

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Re: Lizzy D update

#63015

Postby PaulBullet » June 26th, 2017, 4:42 pm

I would consider long term rental for the initial couple of months

https://www.europcar.co.uk/deals/long-t ... JP_JHPR_01

take the cheapest car/van, you only have to worry about fuel

once you have passed the probation period you will know more about the car you need and want and how long you think you will be in this job

Paul

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Re: Lizzy D update

#63097

Postby PinkDalek » June 26th, 2017, 11:03 pm

To avoid people reinventing the wheel (pun intended), Lizzy D has asked for Reliable 2nd hand car advice :) over at Cars, Driving, Motorbikes and Trains:

viewtopic.php?f=58&t=5911


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