Help needed for reasons why my company should let me buy a Model S!

[Squirrel!]

Hello Tesla owners, I need some inside help from people that know and love the car!

So here's the deal. I am due a new company car at the end of the year. Typically they let us choose what we want and set the budget at something like a passat - circa £25-30k and we have that for for years.

I want to tell them why they should sped what "looks" like 3 x as much on a model S, so need some help with compelling reasons as to why this will be worthwhile. It will be used for work and personal use, so can't claim vat back.

Anyway, here are my thoughts. Can you tell me if I'm NUTS or if there is method to my madness and any other thoughts / pointers?

1. + Government Plug In Car Grant. Drops list price by £4,500.00.
2. +FYA. As far as i can see, the car can be offset against company profits, so that knocks another 20% off the price. Although I think you pay 20% of the resale value back when you come to sell.
3. - VAT. As it is both work and personal use, the VAT cannot be reclaimed.
4. + FREE SUPERCHARGING! This will save around £15k in fuel over 4 years (100,000 miles)
5. - Insurance will be higher
6. + Lower maintenance costs? No oil or filters or cam belts etc?
7. + Lower depreciation value than passat
8. + Battery and drive warranteed for 8 years (passat engine is 3 years or 60,000 miles)
9. + Lower NI payments by the company
10. + BIK rates diving in a year or two. So while i pay more now, in a short while this will plummet which helps me, but also keeps up resale value.
11. + Autonomy and safety is improved which reduces likelihood of accident or incident which means less chance of unexpected costs or time off the road!
12. I estimate total cost over 5 years (as i would be pitching that) would be about £3k more expensive in the Tesla (£7.4k over 4 years, BUT if you sold the cars at the end, this would swing to Tesla S favour, being £12k cheaper over 4 years or £14k cheaper over 5.

This is all guesswork for now.

His concerns will be.

A) Will recharging impact job (most days 150 - 250miles).
B) how the hell will he present costs to the finance chiefs

Any help welcomed!

 

[Sandollars]

Ummm, good luck with this.....

 

[PhilDavid]

Can you pay the difference in depreciation yourself?

Would make everything else moot as then they will not pay extra.

 

[Squirrel!]

what would a 5 /6 year old model s at 125k likely go for...thats the question,,,,

 

[Mark_T]

Give up now, if your scale car is a Passat, they are not going to get you a Tesla.

Company car schemes are often as much about ensuring a level playing field across a number of staff and different grades of staff, nobody is going to agree to give you a car which everyone else is going to recognise as being well outside your grade...

 

[Squirrel!]

It's not that kind of company. If it can be shown to be cost effective it wont be a flat no.

 

[Mark_T]

Even so ,you will struggle.

The maintenance for example is not actually cheaper than a typical ICE car in the £25-30k range.

The residuals are better, but you are still going to be writing off more than £50k over the period of ownership (you'll need the S100 to get the sort of range your driving seems to need).

The EV grant is already deducted from the published list prices of the Tesla, so it doesn't reduce further.

 

[Squirrel!]

Shame. I was convinced it makes sense

 

[Tiger]

It's not possible to calculate that a more expensive car (by a significant multiplier) is cheaper than the cheaper one. Only if they were in the same ballpark. And if they ended up giving you a more expensive car, suddenly everybody would want one.

Maybe make a case for base level Model 3: Tesla Model 3 Cost Calculator

 

[sidmini]

Squirrel! wait for the model 3 that will be bang on the budget you have given, drive a new leaf or Kia Kona till then?

 

[Squirrel!]

Hi Guys, thanks for the responses.

My calculations on the model S in the End showed that the total my company would spend over 4 years would be £53,230 on the passat and £60,766 on the Tesla S (buying an ex-demonstrator which is still eligible for FYA allowance and they can still remove the £4.5k grant).

So it's surprisingly not a massive difference on cost and the company buy cars cash up front and are open minded to ways to save money.

Taking off the resale value at the end (including paying back on FYA for the tesla) and assuming worst case of the Model S only being worth £20k at 4 years old and 95k miles, and the passat being £4300 (or less as its diesel) these values become

VW £48,930.00
Model S £44,766.00

Meaning the tesla is just over £4k cheaper (or £14k if you use current resale values) and effectively you've enjoyed a far superior car and you have a foot up to the next purchase. I believe if you trade the car in you may not need to repay the fya, in which case the tesla would become around £8k cheaper at the minimum (or £20k cheaper using current resale values).

Not only that, but I personally would save around £8 to £10k in BIK over 4 years.

All that said, Sidmini is right......a Kona EV probably is a fight i can win very easily, and justify a top spec car, then gradually work my way up to the 3 or S from there.

Just have this nagging feeling that right now is a golden opportunity to take advantage of the system, FYA allowances, discounts and more to make it attractive enough if i can swing it the right way. Sure, it may upset others, but I guess that may depend on whether others have taken the time to work through the figures and present a strong enough case as to why it makes sense (not even going into the ways in which it can make driving safer, reduce potential for accidents and time off work, costs etc that may incur etc).

Apologies if I'm being delusional. Just fallen in love with the car, it's capabilities, safety and so forth, so like anyone am trying every avenue to justify it if at all possible.

 

[sidmini]

If you really want it why not put some of your own cash in as a deposit and then get the company to cover the rest?

 

[Squirrel!]

Thats a thought. But I need to read up on FYA.....looks like you pay back the full ammount on sale, not a percentage of the sale value. Which torpedos me.

Kia Kona it is for now.

Poop. :-(

 

[WannabeOwner]

Government Plug In Car Grant. Drops list price by £4,500.00.

As mentioned above that's usually already taken into account int he published Price.

As far as i can see, the car can be offset against company profits, so that knocks another 20% off the price. Although I think you pay 20% of the resale value back when you come to sell

There's two ways to look at this.

The company has the benefit of the first-year-writeoff for the period that you own the car. personally I can put that sort of chunk-of-change to good use, in that time.

Accountants tend to prefer smoothing the peaks-and-troughs, so prefer to have straight-line write off - so much per year - but of course that misses any investment opportunity.

FREE SUPERCHARGING! This will save around £15k in fuel over 4 years (100,000 miles)

I doubt that's a factor. If you do all your charging at the Supercharger the car will (after a certain number of Supercharges) reduce the charge rate (to prevent long term damage to the battery). Also you will be sat at the Supercharger "waiting".

I do 27,000 miles p.a., the daily commute is 80 miles round-trip, so that's 65% of my annual driving, so I'm not the "zooming around the country" type of user, but I do have one or two days a month that are out-of-range and need supercharger (possibly more than once on such days). My Supercharger use for the last 12 months was 12% of my total kWh. So not to be sniffed at, and perhaps in your case you will be passing a Supercharger on one/several of your routine journeys?

Economy-7 tariff is around 8p / kWh [day rate is a bit higher than normal] ;(normal rate is probably around 14p). In round numbers the car can go 3 miles on a kWh. So if you do 30,000 miles a year and 10% free-supercharging that's 9,000 kWh @ £0.08 = £729, @ £0.14 = £1,260.

Its such a dramatic reduction that, personally, I don't try to squeeze any more saving out of wallet! For example, I don;t give a second thought to whether I have to charge at home, instead of work (which is free), its a few quid a year extra compared to spending ages trying to be very clever ...

However, charging at work has no BIK tax (but if you are high mileage driver you are probably not "at work" every day?) and the company probably does not have great Electricity prices (unless they are smelting Aluminium or somesuch?!!) But you can have your home changed to Economy-7 tariff, and then you are looking at a saving in the region of £100 per month for each 10,000 miles you drive p.a. (compared to Petrol/Diesel) For high mileage drivers the differential between Petrol/Diesel and Electricity is very significant (I didn't see that in your list of Pros/Cons?)

No London Congestion Charge (if that is something that you would incur?) Might be a few other similar perks which, if you are lucky, will be ones that make a difference for you personally.

Insurance will be higher

Not necessarily, although if the vehicle price is 3x your normal ride then hard to imagine it would be the same/cheaper . Cars fitted with Auto Pilot (whether you use it, or not) attract a discount.

On that point, personally, if you are driving many miles per day then AP will be the biggest benefit to you, personally. In my experience it dramatically reduces wear-and-tear on the driver, and you will arrive more refreshed - and thus potentially be Sharper for your business work

Lower maintenance costs? No oil or filters or cam belts etc?

Should be, but mostly isn't. Yes, far less maintenance, but Tesla service charges are disproportionately high. That said, there is no mileage service interval requirement for Warranty. (If you Finance the car the Finance company may well have a requirement, but you mentioned that your company favours buying outright). I service a bit less than once a year, so around 30,000 mile interval, but I suspect that longer than that would be fine (but once a year probably a good idea). So it might work out cheaper because of that.

Lower NI payments by the company

Not sure what you are referring to there?

reduces likelihood of accident or incident which means less chance of unexpected costs or time off the road!

Yes. But if it is off the road its likely to be for a long time. Tesla "spare parts panels" tend to be a long time coming. But they are likely to give you a loaner (for warranty parts, not accident damage), so that works out well ... you won't be putting miles on your own car whilst you wait. But if it is an accident then your insurance company (or other party's) will be footing the bill for the hire-car and that period is likely to be longer-than-normal

Will recharging impact job (most days 150 - 250miles).

maybe not. Have a look at A Better Route Planner, choose the Model (e.g. S100 non-performance) and plug in some of your worst-case journeys, set the initial charge to 100% and see if a) you can get there-and-back and b) if ABRP finds a suitable Supercharger en route.

In Winter [cold-weather] range is reduced. The absolute worst case, which might effect you?, is the "travelling salesman" where you stop for an hour or so at each call. The "cost" of reheating the battery etc. as you set off on the next leg is punishing in that scenario, sorry about that.

Can you plug-in at a clients? - 13AMP socket will do, although obviously more convenient if they have an suitable external socket, rather than you trailing an extension lead across their car park and through an open office window!. You will only get about 6 miles per hour top-up [from 13AMP socket] , but it will keep the battery warm (in Winter)

how the hell will he present costs to the finance chiefs

I'd see if you get any traction for the 100% first year write-off, and the boss having a use for that money. Redundancy for a disruptive team member will more cover it ... but NOT buying the car also provides funds for that

FYA.....looks like you pay back the full ammount on sale, not a percentage of the sale value. Which torpedos me.

My understanding is you reclaim X% of the purchase price and pay back X% [i.e. the original percentage rate] of the Sale price

 

[WannabeOwner]

I need to read up on FYA.....looks like you pay back the full ammount on sale, not a percentage of the sale value. Which torpedos me.

How about the company buys the car (and gets the FYA), but you pay for the "fuel" by charging at home, not at work?

P.S> don;t forget the additional cost of installing a charger at home. £600-ish, provided you don't have to dig up the road / drive, and your distribution board isn't on the far side of the house

You're welcome to use my referral code. You can have whatever swag that entails (provided you come and pick it up )

 

[Mark_T]

I'd see if you get any traction for the 100% first year write-off, and the boss having a use for that money. Redundancy for a disruptive team member will more cover it ... but NOT buying the car also provides funds for that

From the business owners perspective I'm having trouble seeing the benefit of the first year write-off vs not spending £60K more on the car in the first place?

Seems to me I'd have more cash to invest in other projects by simply buying the Passat instead of the Tesla in the first place...

 

[WannabeOwner]

Hehehe ... yes, that's definitely right

Here's a different tack:

if you are spending 60K more [than Passat], and there is some (longer term) benefit - let's assume very high mileage driver, and saving on fuel is significant, and worthwhile - then the FYA will help offset the increased capital spend.

 

[WannabeOwner]

30,000 miles p.a., 10% Supercharger (free) rest on E7 at £0.08p / kWh = £720 p.a.

30,000 miles p.a. in 40 MPG car and fuel at £1.30 / L = £4,426 p.a., 60 MPG = £2,951 p.a.

5 year saving : 40 MPG = £18,630, 60 MPG = £11,115

No idea whether Company's Customers would see someone arriving in TEsla as:

a) I'm paying them too much
b) I wish we were an ECO company like yours is.

Model-3 definitely a more realistic candidate for this projection, I reckon.

 

[Asterix187]

1st year write off also assumes they buy their company cars, which I very much doubt they do unless they are very cash rich.

 

[WannabeOwner]

@Asterix187 seems like they do:

the company buy cars cash up front

which I very much doubt they do unless they are very cash rich

If the finance cost, at the time, is negligible then I'd take it, but the rest of the time I find finance parasitic. If we could all make more profit investing, than the cost of borrowing, we'd all be filthy rich I've come to think that accounting folk like finance because it gives a flat-line to the cost, I just see it as an additional cost of £15K over a 5 year period.

Buy the car, get the FYA, sell it to yourself at whatever point in time the numbers make sense, for the cheapest price you can get on We Buy Any Car, and then start charging to the company 20-whatever-it-is pence a mile for business mileage.