Company Car - Insurance Question

[rawly]

It's generally not beneficial to buy a Company Car as a benefit to use, however the kind of car I usually drive, and I've had 5 of these on private lease in the past, is the Toyota Prius (Hybrid). Very effiicent and a lovely car too. (In my opinion!!)

Anyhow, the new "Plugin Prius" launches in a couple of months. BIK of 5% and 100% Write Down in the first year. I've already considered this on the value of the car ( £27,500 ) after a Government grant of £5,000, so this is the P11D value. It will reduce my tax code by 5% x 27,500, which is just 1375. The company will additionally pay NI on the car at 13.5% of £1375 which is just £185 per year.

I'm sure I have this correct as I understand it! Anyway, the big plus is that I will save another £5,000 in year 1 as the car is eligible for 100% writedown against your profits (Max of £5,000), so in effect it is costing £22,500.

Other benefits obviously Services will be via company, so a tax saving there.

The only unknown I am unsure of is Insurance. As it is a Company car can I still insure it under my private policy as I will be the only authorised user, and my policy already has business use on it, or as the company would own the car do I have to take out a separate Business policy for the car, which then might prove alot more expensive than my private policy where I have 10 years of NCD! And therefore any saving I would make over a 3-5 year period would probably be cancelled out!

[Mikey3001]

You have to insure the car in the company name under a company car policy as you have no insurable interest in the vehicle. Depending on the insurer/broker/aggregator, they may allow you the "equivalent" or "mirror" the level of no claims bonus from your private car policy. If you also want to insure a private car then you will not be allowed to use this no claims bonus but again depending on insurer/broker/aggregator they may mirror any bonus you are currently using. Best speaking to a broker who can explain all the pros and cons in detail and give you a complete market overview.

[BolshieBastard]

Are you certain about the £5000 Government grant on a hybrid!?

I thought that was only applicable to electric vehicles and not hybrids? Otherwise, every qashqi, cayann hybrid etc would be with £5k off and I cannot see that.

[rawly]

Are you certain about the £5000 Government grant on a hybrid!?

I thought that was only applicable to electric vehicles and not hybrids? Otherwise, every qashqi, cayann hybrid etc would be with £5k off and I cannot see that.

Hi mate,

It has to be on the Government approved list. The new Plug-in Prius will be (not existing models), and the newly launched Vauxhall Ampera is also on the list:

Plug-in Car Grant - Department for Transport

Well, the insurance for this car comes out at £2,000 with 0 years NCD. Now usually I'd have a 65% discount, which is on my private insurance, so I'd expect it to me more like £600 or so. The quote I got from More>Than Business. I've read on some forum sites some insurers allow you to 'mirror' the NCD on your private insurance if you are going to be the only named driver on the business insurance, so I will need to investigate this otherwise over 5 years I'd be paying £10,000 in insurance which sort of defeats the object of the 100% write down LOL!

So, the insurance premium may make this not very financially viable as buying it personally, as I could add this vehicle to my current policy, if I am the owner, and it is thus much cheaper to insure by almost £1,500 a year!

[IR35 Avoider]

Many years ago when I had a company car, I initially made the mistake of making the company the registered keeper and insurer. My accountant told me that most other contractor clients made themselves the registered keeper and insured the car under their own name. (Insurance under company name more difficult to get and more expensive.)

I can't remember the details, but this was all perfectly above board. I was the registered keeper, the company was the owner, I paid the insurance with my personal credit card and claimed back the expense from the company.

I can't remember how it was above-board, I think some insurance companies only care who the keeper is. (Keeper and insurer have to be the same person, keeper does not have to be owner.)

A quick Google tells me that someone else asking the same question elsewhere were told Direct Line were OK with this. I suggest you just read the documentation carefully and make sure you don't have to be the owner, and double-check by asking. (i.e. full disclosure. But the written documentation is more important than what they say on the phone.)

My insurance at the time was with Kwikfit, however that was about 15 years ago.

[rawly]

That's interesting, I'll research your Keeper/Owner point further!