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Purchase Incentives, Discounts, Tax Breaks (in UK)

Discussion in 'The UK and Ireland' started by WannabeOwner, Nov 5, 2015.

  1. WannabeOwner

    WannabeOwner Member

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    I'm looking at the timing of a purchasing decision and whether to suffer penalty clauses for early exit on existing vehicle finance contract. Can anyone please clarify for me what is available, and might be tapering out (and thus justify an earlier purchase)

    £300-ish annual luxury car penalty from 2017 I think?

    Currently 100% first year (business) write-off for EV purchase I think? Is that scheduled to tapper?

    Charging point installation grant (75% currently I think?) I guess that will phase out over time.

    Is the $1,000 buddy-introduction available in the UK? (I see in other threads that it may be being extended to 31-Dec)

    Are there other such incentives / discounts that I should be considering?

    Thanks :smile:
     
  2. xborg

    xborg Member

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    Hello,

    I've just bought a Model S via my limited company, in the UK.
    I'll write up information I gathered in a separate post, but long story short here are some answers for you:
    (All these information is gathered from internet, please do further research about it :)
    - £300 tax will affect new cars bought after April 2017.
    - Yes you can write off 100% first year allowances. That means that you will not pay corporation tax on that value. You can also pay maintenance and insurance from business account, and possibly charging station usage/installation charges.
    Main problem with getting a company car is BIK - Benefit in kind. It is still low for EVs, but it is getting higher every year. For 2016, it is %5.
    That means, for first year you will pay nearly £600 tax. and then 850,1200,1600,1900..
    So, If you keep the car for a long time as a company car, actually BIK will kill the profit you got from first year allowance. I plan to sell car to myself after 2 or 3 years.
    -Charging installation grant is perfect. Unfortunetly it is planned to end in February 2016. Plug-in car grant eligibility guidance - GOV.UK
    If you want to use a home charger, currently Tesla is offering £550 voucher for home installation. It is not clear when this will end.
    - £5000 government incentive also looks like end in February.
    -If you drive in London, there is no congestion charge, and on street parking is free in some areas(ie: Westminster). Some private parking lots also offering huge discounts to electric vehicles. For example QPark annual subscription is around £500, and charging is free.

    I personally think it is a perfect time to buy a Model S. I was planning to buy a Nissan Leaf, but after thinking all the features of Models S and ability to drive longer range. I've just ordered it after 3 test drives and 3 weeks of reading :)
    Feel free to ask any questions.
    Buddy introduction is available, and it is £1000 off, which is perfect. You can use the link in my signature, I'd be grateful.
     
  3. WannabeOwner

    WannabeOwner Member

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    Thanks, very helpful. In meantime I've done a bit of leg work. I spoke to accountant - he has done some Tesla calcs already for other clients, and I can best describe his reaction as a bean-counter's wet dream! That is only the case, of course, for a company which is "in funds", but as a tax-offset he was more enthusiastic than at any time in all the decades I've been working. I wonder what he would say if I ask if we might justify a spouse's car too on the basis that car availability for work is critical and Tesla is new tech therefore "probably" highly unreliable? :tongue:

    Also found "Salary Sacrifice Scheme" on Tesla site. Will ask accountant about that, but doubt it will be useful to me (situation is owner-manager, so very low salary). However, as a perk for employees might very well be top notch. Particularly if we install chargers so employees can charge at work. Accountant not sure (without research) but presumed employee can claim 10p/12p (whatever it is) for business mileage on the basis of "buying their own fuel". Unclear what the impact of "some charging" being at work would be, but it might well be permissible. No idea about company claiming back the VAT either, but we're a small company so no huge corporate policy to have to shift on that point.

    The Benefit in Kind is neutral for me, at least initially. Existing car is, say, 1/3rd price of a loaded Tesla, so 5% BIK on EV would be same-as current lower sticker-price, but higher BIK%, vehicle. Useful to know that it will increase though, thanks, hadn't spotted that.

    I also found a page on Tesla site to calculate fuel saving (I find it very difficult to find anything on Tesla site, other than the main "Design and Buy one" stuff. Accessories for example? If I search the GB site for "Accessories" I get a page of results in Japanese!! Doesn't seem to be any list/shop at all, just "ask your dealer". The USA site has a SHOP link, so I used that and made an approximate conversion / wishlist.)

    Anyway, fuel cost. I went with £1.20 / L, 45 MPG, 30K Miles = £3,637 p.a. compared with Electricity: 0.06P/unit (Economy-7) = £524 p.a. Saves £260 p.m. - so I can just add that to any increase in monthly finance costs for break-even. (With a charge at-work then perhaps 50%, or less, will be "at home"). Tesla website calculator said that it assumes 181 Wh/km.

    I need to find out if I can bail out of existing finance on lying/cheating VW vehicle (can't even remember what the finance deal is, I might be at/close to half-term and the point at which I could just hand the car back ... likely to get a black mark on credit score, but not sure I care on that as it is easily explained). I am presuming, but haven't asked them yet, that VW themselves won't provide compensation now, and by the time they finish the lawyer battles it will be years/decades down the road, and I will have suffered either 2nd hand resale diminished value loss, or exaggerated depreciation (from bailing earlier than I normal do for high mileage work car), or both. I will probably take the view that the first loss is the best loss. For example: what if in two year's time VW bundle all the discredited parts of the company into one, hive off the rest separately, and let the former go bankrupt - in which case any compensation will be the best part of nothing.

    Background: we have changed lifestyle to be as Eco as we can (i.e. with lifestyle changes but without major inconvenience). VW vehicles (2 of, plus a SEAT People Carrier, which comes to the same thing as VW and already has a recall notice) were our chosen Eco-route, and replaced previous high performance, low MPG, polluting cars such as Audi RS4. We have also replaced 2x oil boilers in the house with log burning, installed both Solar Thermal and Solar PV, reduced Electricity usage by more than 50% (before Solar PV) and water usage by 1/3rd, upgraded part of house insulation to Passive House standards, and so on. I'm sure we use more energy than we should, but we have made considerable strides. I'm appalled to discover that the car pollution I thought I was reducing was a lie, and I have a very simple approach to suppliers who shaft me like that: I never, ever, deal with them again. The Bank we were with got embroiled in scandals for Libor, PPI, Forex - you name it they got a $multi-billion fine slapped on them. Been with them for 3 generations, they seemed surprised when we left them for a bank with moral standards - and much better service as it turns out. If I could have my way we would not have customers, nor suppliers, who banked with the likes of Sharkleys (if a company is happy to use a proven lying, cheating, bank what does that say about THEIR ethics?). So as a matter of principle VW, and all derivative companies, is out (and, a bit like at the time of the bank fiasco, at this moment in time I'm stuck with "which (car) company can I trust?" The bank fiasco tells me that it is likely to be a cultural thing - the bank disclosed one dishonest behaviour after another. We've already had CO2 announcement from VW in the last few days, and my wife said (although I didn't catch it) an MPG one too? Likely other automotive companies have similar behaviour. So I'm a bit stuck on who to choose to replace our other two cars - daughter's car (also VW Blue Motion) and the people carrier (SEAT Alhambra)

    We had specifically excluded Tesla (and all other EV suppliers) in the past because of range-anxiety. The VW debacle has caused me to look again, and I think the Superchargers just about make the difference on that point. Everyone on the forums seem quite happy with the whole range thing, which is reassuring, and we will certainly tolerate some lifestyle changes - we've done it before with the Log-based central heating which requires manually loading the boiler, not just setting a thermostat, so going-away-for-the-weekend is not like the old days, in that regard - so I suspect that a 20 minute stop at supercharger, once a month, will be "acceptable" given that it will replace a 5-minute Diesel fuelling stop once-a-week

    Sorry, I've gone-off-on-one. Nil bastardo carborundum
     
  4. arg

    arg Member

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    You seem to have two points scrambled here. The link you give is the plug-in-car-grant - the scheme that gives a discount of £5000 of list price when buying the car (already factored into Tesla's advertised pricing). The current scheme does end in Feb2016, but funding has been announced for it to continue in some form until 2020. I thought the new rules were meant to be announced around now but unless I missed it they haven't yet. The draft proposals split the grant into three categories, aiming to favour large-battery vehicles over hybrids with small electric range (while reducing the overall level of grant support), so there's hope that Tesla will be largely unaffected - but certainly some uncertainty if you expect to be buying after Feb 2016.

    Another gotcha with this grant is that the BIK figure is based on the price BEFORE taking off the £5K grant, so this year's BIK is 5% of (price you pay + £5K) - a nasty surprise if you weren't expecting it.

    The charging installation grant is OLEV's "Electric Vehicle Homecharge Scheme", which appears to run from year-to-year (ie. each scheme has a fixed duration, but they've several times now announced a new scheme with slightly different rules each time the previous scheme ran out). Sometimes causes trouble if you happen to be buying at the time between two schemes.

    It has been rumoured that this will end with the introduction of the Tesla wall charger (though that itself should in theory qualify for the OLEV grant).

    That's the one discussed above.

    Unfortunately, not quite true - to get the exemption from the CC, you have to register every year (on paper!) and pay a £10(?) registration fee. Although they obviously access the DVLA database to enforce the charge and could easily have waived it automatically for EVs, they have chosen not to.

    So, if you live in London it's reasonably OK, but for people who only visit London occasionally, in effect you still have to pay the CC.
     
  5. mcmcmc

    mcmcmc Member

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    That's stellar information!

    I hadn't realised both (although living in London £10 per year is totally fine). CC do tend to make things so complicated on purpose, it's almost as if they're hoping you'll forget to register and then catch you out. Questionable practices in my view. If it was a TV commercial, ASA would have been all over it...

    Anyway......... I too am in the position of deciding whether to buy (Model X) outright via my company and benefit from 100% year 1 write-off, or to lease via company...

    Done some comparisons with total cost of ownership and this is still mighty confusing. It also depends on how much you drive and given I do like 5-6k miles per year I'm not so sure if it's worth the ~1 year wait and more importantly the potential extra cost involved. Yes, I care for the environment but for my wallet too!

    Insurance is also a fair bit higher on Tesla (given lack of track record and not known with many insurance firms). Yes, Autopilot would be fun but am not going to use it every day as I enjoy driving myself. Tech wise I think XC90 may actually be more advanced with options and so on (although it doesn't get the OTA updates from Volvo, like Tesla provides).

    I've been considering Q7 (bleh, tiny 3rd row seats), Merc GLE (overrated), Touareg (no longer hybrid, no 3rd row seats either), Cayenne SE (not bad, although bit OTT once you add all options) and XC90 T8 R-design (quite impressed after test drive, although 50 litre petrol tank and if electricity motor empty you end up with 2WD plus 2 liter petrol are turn-offs), Ranger Rover hybrid (more on paper a hybrid, hardly any efficiencies!)...

    For me, speed 0-60 is all good and well, but it's like buying a sports car in Manhattan - you probably won't get to enjoy it that much.

    Buying via the company felt like a good option, but it has to make financial sense. I sort of feel that the grants and 100% 1 year write-off are taken back over the years via massively increasing BIK (5% now, but in 5 years it's 16%!) and luxury vehicle charges being introduced... not sure if going 100% "luxury EV" is still sufficient incentive. Might actually cost more for those that don't drive so much!

    Surely I'm not the only one who's facing this kind of dilemma?
     
  6. tonyj01

    tonyj01 Member

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    #6 tonyj01, Nov 16, 2015
    Last edited: Nov 16, 2015
    I don't have such a dilemma, but I am in a fortunate position of being a sole trader - self employed and have a separate limited company. Up to now, I bought cars under my own name, then lately have leased for three year terms. I bill the limited company for business miles done in my personally owned car.

    I have some idea of keeping the Model S to be delivered next March [16 reg] for a bit longer, am planning to buy the car for the limited company for me to use [100% first year write down]. But the idea above from @xborg of buying the car myself from the limited company seems clever, when the BIK bites back.

    But . . . I know myself, I will want the next version of the car when it is developed, who knows in 2-3-4 years??

    In other words I'm thinking of trying to keep a Model S for longer, but know I will be tempted by the latest new developments in a few years].

    And @mcmcmc you feel we will not enjoy the performance but there are always places you can enjoy rapid acceleration, a quick safe overtake.

    Regards,

    Tony
     
  7. Wooski

    Wooski New Member

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    Hi - remember that Tesla is raising prices next week as well. This is why I ordered mine yesterday. It's almost a perfect storm.

    The Chancellor is expected to announce the new EV grant scheme in the Autumn statement which is imminent. I think some fear that he will lower the grant for high price EVs. What IS crazy is that a Porsche Panamera Plug In Hybrid gets the SAME grant as a Tesla Model S (which is a total EV). We shall see.
     
  8. WannabeOwner

    WannabeOwner Member

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    Having now actually had a look at the book keeping it turns out that in the past Company has bought the vehicle, but because daily commute is high (40 miles each way) [all] fuel has been bought by the driver, and that includes business mileage - not sure if that is an accounting oversight, or to avoid some extra "benefit in kind" type stuff.

    Anyway, at 25K miles p.a. it means that any fuel saving is directly in my pocket, "after tax". With Economy-7 charging at home, and charging also at work (at worst that will be 50:50, at best I'll not bother to charge at home when I will be back-at-work-tomorrow) that means that I will save £250 per month, and company will pay that (i.e. as part of the higher vehicle price, and thus higher monthly HP payments).

    By my sums I can replace a £30K VW with a £60K MS and pay the same, per month. I've assumed financing over a 5 year useful life, instead of 3 years (at I start to worry about mechanical issues at 75K+ miles with ICE), and added in the £250 high-mileage fuel saving per month, and then there is the first year writeoff which at circa £20K will cover the deposit (with a bit of accounting-cashflow-lag).

    Only real problem is getting out of existing HP on the 1-year-old VW which is way more than the vehicle is worth in current market.

    My inclination is to place order, this week on old price list, for a 9-month delivery date which would make the VW 2 years old and more tolerable loss. Long wait though ...

    - - - Updated - - -

    I had another thought as well:

    P85D (and maybe even the plain "D"?) hasn't been out for long in the UK I think?

    My guess is price rise will be circa 6% net Monday

    Other incentives will go away between now and May next year

    So when I come to sell my vehicle my purchase price, and those of anyone else who has bought the recently available models, will be less / significantly less that someone who will have bought the vehicle from mid 2016 onwards. So my second hand value might be insulated somewhat, compared with if I delay a purchase.

    Its all Man Maths, as my accountant calls it!, though.
     
  9. chetalien

    chetalien Member

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    It might be worth to look at guaranteed resale value- which tesla provides for all their cars bought through finance available at 37th month. get a quote- u may be surprised.
    Should settle doubts re resale values
     
  10. WannabeOwner

    WannabeOwner Member

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    The Tesla "resale guarantee offer" I have seen is based on max 15K miles per year and a 17p "Overs" charge per mile, so over 3 years (@ 25K miles p.a.) that would be a further price reduction of £5,100. (The offer I have seems to be for any size battery, so the 17p might work out "more worthwhile" the higher the spec of the car), so open-market might work out better for a high mileage vehicle if a buyer thinks that the motor has plenty of maintenance-free life left - particularly given the unlimited mileage guarantee.

    From what I've read on the forums the servicing requirements are a bit uncertain. The T&C's say that the Resale Value Guarantee requires servicing "according to Tesla's recommended service schedule" which is quite onerous for a 25K mile p.a. driver, but there are posts saying that they have a letter from Tesla saying "once a year is fine" or somesuch, and that would be great.

    I'm inclined to finance with Tesla just to have that optional bail-out at the 3 year point, but expect to keep the vehicle for 5 years if there isn't some dramatic marketplace change ... getting a second Tesla in the family in 3 year's time, and shifting the high-mileage one to a lower mileage family member, might well be just the ticket :)
     
  11. arg

    arg Member

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    I view the resale value guarantee as being of rather limited value. It's hedged around with conditions and is a relatively low figure - if Tesla are still doing well, you probably won't want to exercise it as you will get a better value just reselling it normally. If something really bad has happened to Tesla such as to seriously drop the resale values, then Tesla will probably be broke and unable to honour the guarantee. So it's only of use in the middle sort of case - the resale values are coming out poor but not so bad as to stop Tesla selling new cars at a profit.

    Of course, if Tesla's finance offer is already a good fit to what you wanted, then the resale guarantee is a nice bonus, but IMO not worth taking it just for the guarantee if you would otherwise have financed the purchase in some other way.
     
  12. chetalien

    chetalien Member

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    I have opted for GRVP, whether I exercise or not depends on market conditions but me here hoping Tesla would still be here in 3yrs and M3 would be out and I can p/x for it or go to new deal etc. Also its something to bargain for if someone else comes along with a BEV range in excess of 150miles.
    Re tesla flopping and going bust- unsure and its a risk.
    I've tried selling high end cars and its such a hassle that sometime its easier and more convenient to sell it back to dealer.
    Anyway we all go about cars in a different way and its always a liability than an asset.
     
  13. arg

    arg Member

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    Sure - I agree with everything you say, my point was simply that it's only a fairly narrow range of circumstances where the guarantee will actually help.

    Certainly I don't expect Tesla to go bust, and I expect that many people will trade in their cars with Tesla, and that for some of them doing so after exactly 3 years will be what they want to do - but even those people probably won't use the guaranteed value: they will get a trade-in price in the normal way that comes out greater than the guaranteed value and everybody is happy.

    Of course resale values might workout a little worse than we expect, in which case you'll get your trade-in price that's not so good and you'll say "what about the guaranteed trade-in?" and get it bumped up a bit - assuming you didn't accidentally let the critical date pass by, or need to trade sooner than the 3 years.

    So I'm not saying the guarantee is worthless - it could be worth a couple of thousand pounds under a not-expected-but-plausible scenario. But it isn't a real game-changer that solves the risks of being an early adopter of this technology. OTOH, those risks are now much smaller than they were (say) 3 years ago.

    I suppose you can concoct unlikely scenarios where the guarantee might pay out more - maybe UK government goes rabidly anti-EV while the rest of the world carries on as usual, so our right-hand-drive cars are unsaleable but Tesla is still doing well in other territories and can afford to pay out on the guarantee in the UK.
     
  14. chetalien

    chetalien Member

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    well said arg, i've struggled to keep any car beyond 2yrs and hoping with this i can keep atlas 3yrs with some GRSP(man maths of course)- best way to convince other half too. end of the day- bought cars to enjoy them and first time it may actually make some financial sense
     
  15. grahamsimmonds

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    A lot of man maths going on here. If you are buying privately, I think the economic benefits are tenuous. You buy it because you want it. It's a great car.

    if you are buying through a profitable company, it's fantastic. For me, I get to drive around in an amazing £100k car, all expenses paid, for £53 per month BIK + roughly £40 per month in electricity (I am driving 2000 miles a month). It's good for my company as it takes advantage of the temporary tax saving that FYA gives plus it does not have to pay me 45p per mile expenses. Plus it has a very happy Director/Owner!

    My plan is to get the L upgrade after Xmas, paid for by the company who can claim the VAT back. Then buy the 100/110kwh battery when it is released sometime in the next 3 years under maintenance so the VAT can be claimed back (assuming it can be retrofitted). Then look at buying the car off the company when the BIK rises. I am hoping it will be worth peanuts by that time! Or replace it in 3 years before the FYA runs out in 2018. Knowing me probably the latter!
     
  16. chetalien

    chetalien Member

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    yes am buying through company too which if u have a ltd comp is the best way to go. i probably won't be buying the car as the future maybe a m3 with p90dl is what i would be after
     

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