COMPANY CAR RUNNING COSTS
If you’re looking for the most cost-effective company car, don’t forget the role that fuel economy should play in your decision.
A company car driver may choose a car based solely on the cost of benefit-in-kind taxation. However, this might lead to a higher overall cost when private fuel costs are taken into account.
The below example compares a petrol and a diesel fleet car with the same P11D value.
Although the petrol car offers lower benefit-in-kind taxation, when we consider the cost of private mileage, diesel is the lower cost option.
|BiK 2020/21 tax year||30%||31%|
|BiK 2021/22 tax year||31%||32%|
|BiK 2022/23 tax year||32%||33%|
|Total BiK tax (20% taxpayer)||£4,650||£4,800|
|Annual private mileage||7,500||7,500|
|Fuel price / litre (p)||114.2||118.0|
|Total fuel cost||£2,625||£2,265|