Conference terri::cars_uk

    I've had a few e-mails about the stories I've heard and that I hadn't
    posted them here :-)
    
    Well the sensible ideas are that new-hires take over existing lease
    cars and that we may get a discount on cars for takeover.
    
    The thing that worries me is that the allowance may drop.
    This however is not a rumour it is just a worry. 
    This was mentioned to me but later I found out that it was a wind-up.
    
    There we are my cards are on the table.
    
    Roy

	What are notes for, if not to discuss rumours ?? :-)

    
    The rumours I heard are.....
    
    When your existing lease expires you can either;
    
    i -  take over an existing lease at 30% discount
    
    ii - take over an existing lease for three months at 20% discount
    
    I don't know if this is going to be compulsary
    
    Paul
                                        

A few other computer companies that I know of all give 'old' leasemobiles to new hires, 
and they don't seem to mind. Seems a much better idea than leaving them all lying around.

BUT the reason this works is that they have set levels of cars, and not the huge and 
varied choice Digital gets.

ie
So at A.N. OTHER company they didn't want new hires driving around in a brand new car for 
their level, if someone else at the same level has a worse car, 'cos the levels were 
reviwed recently
.
..but my boss has a new hire starting Monday and he has not received anything official 
about this.

Greg

================================================================================
Note 1913.4           1992 changes to the car lease scheme.               4 of 4
BAHTAT::FORCE6::hilton                               15 lines   9-OCT-1992 16:02
                           -< Nothing official yet >-
--------------------------------------------------------------------------------
A few other computer companies that I know of all give 'old' leasemobiles to
new hires,  and they don't seem to mind. Seems a much better idea than leaving
them all lying around.

BUT the reason this works is that they have set levels of cars, and not the
huge and  varied choice Digital gets.

ie
So at A.N. OTHER company they didn't want new hires driving around in a brand
new car for  their level, if someone else at the same level has a worse car,
'cos the levels were  reviwed recently.

...but my boss has a new hire starting Monday and he has not received anything
official  about this.

Greg

    	New-hires taking existing cars was one of the points in the
    	"Return to profitabilty" mail from Alistair Wright on 25-Sept:
    =======================================================================
         To:	   All UK Employees
         From:	   Alastair Wright
         
         Subject:  Getting back to profitability
				.
       				.
				.
         Car Scheme
         ~~~~~~~~~~
         This costs the Company �26 million a year.  To achieve major 
         savings will require a radical overhaul of the scheme which 
         takes time.  In the interim we are introducing some short 
         term changes, such as insisting that new hires should take an 
         existing lease car. 

    ======================================================================
    
    	Ian.

    Who is this Greg Wegg :-)
    
    Thanks Ian.
    
    Roy

.14>BUT the reason this works is that they have set levels of cars, and not 
.14>the huge and varied choice Digital gets.
    
    I believe that Digital ( and other companys ) ought to restrict the 
    choice of company cars to just Sierras and Cavaliers ( for example ).
    
    By doing so, the company would be able to save a lot of money by being
    able to negotiate better deals for bulk purchases and maybe servicing.
    There would be no need for the employee to pay anything towards the
    cost of the lease, thus reducing the administration. Thirdly, it would
    present a corporate image, particularly if all the cars had to have the
    "Freedom in Computing" stickers. Finally, it would stop all the
    bickering about "my cars better than yours" siince all the company car
    owners would have the same car !
    
    Simple, eh ?
    
    	Terry
    

    Mr Wright may be correct in stating that the car scheme costs the
    company �26M per annum but what he doesn't say is how much the
    employees contribute in additional payments to offset this.
    
    I suggest that the major cost is the basic car amount that all
    supplement holders are eligible for.  I think I would like to see some
    more detailed accounts before we all get carried away on a wave of
    hysteria.
    
    As for .8, I think we have been round this bouy before, all with
    tongues firmly in cheek!

    
    Perhaps we should be told how much of these costs are incurred 
    because of the bloody inefficient way it is run!
    
    Richard.

Re .10

Well said!

Alistair Wright talks about a "radical overhaul", but isn't that what we
did a year or so ago, and look at the even bigger mess that fleet got
into (cancelled quotes, delays ordering new cars, upset employees), which
ends up costing a packet.

Whatever we do, lets keep it simple, keep it in place for long enough
for benefits to show, and JUST DO IT.

mb

p.s.

Having a "good car scheme" is, IMHO, part of my compensations and benefits,
so to make it less attractive is equivalent to having a pay cut!

    
>    I suggest that the major cost is the basic car amount that all
>    supplement holders are eligible for. 

	Don't forget, when I brought up the fact that, as a person who takes the
	cash, I get 3,000, whilst people who take cars get 3995, I was told

	"you are not undercompensated, but less overcompensated"

	They gave me figures to show that both sets of people were paid too 
	much, so they just didn't increase my renumeration in line with people
	who had the car.

	I have been tackling this for a year and a half.........I am still told
	I am less OVERcompensated

	...........that means people who take the car are MORE OVERcompensated.


	It wouldn't surprise me to see a cut in both, to what fleet believe
	the compensation should be.

	According to the figures they gave me, I was overcompensated by about 
	100, and car-takers were overcompensated by 550.

	This is NOT an announcement

	Heather

something I've never been sure about...

This �3000 cash, doesn't it just get added to your salary and then taxed as
part of your salary, so in effect you get at most �2250, not including national 
insurance and all the other things subtracted from one's salary ?

    All this talk about OVER or Less Over-compensated is a bit confusing,
    as it all has to be related to the Company's tax bill at the end of the
    day.
    
    It may all change again when the Gov't review the Tax benefits of
    company cars due I believe next month....(or was due until the current
    Sterling devaluation issue!)
    
    Surely the simplest method is to tax on the Capital value of the car
    when supplied...then who gives a fig what cc the car is, or whether
    it's Diesel or Petrol fuelled.
    
    I just hope the company is quick to assess the tax implications as and when
    they are brought onto the statute books, but I suspect we will all need
    to be tax experts to to understand it, and the impact on the Company!.
    
    I have to agree with the idea of simplifying/reducing the options
    available for drivers, even though I personnaly would not like it.
    
    Tim
    
    

Digital can do what it likes. Who amongst us as the resources to take on a
large corporation? You either take it or leave.

Dave.

>This �3000 cash, doesn't it just get added to your salary and then taxed as
>part of your salary, so in effect you get at most �2250, not including national 
>insurance and all the other things subtracted from one's salary ?

	Yup, but figures are iffy, at most it would be 1,800 if you're on 40% 
	rate.

	However, I have put numerous comparisons in here around what the
	bottom line is if you take the money, vs what you get if you take the 
	car, so I won't add them here.

	I'm not NI'd on it as I already pay maximum NI.

	It's not pensionable (I wish it was), so no deduction for that.

	Heather
	

    I was stunned by the 26million figure as well. As I drive around I've
    been musing on it and can't believe it. I can only think that this is
    the total figure paid to PHH & Hertz per annum. Level 8 and above
    employees pay the full cost of their car (as far as I can tell, a clear
    statement is rare), Level 7 and below Digital pays for the standard
    car. I suppose one should roll in insurance department, admin and a few
    other bits but I can't believ that _Digital_ pays out 26m per annum.
    
    Andrew

    Re .8
    
    OK then, I'll rise to the bait :-)
    
    Are you serious ?
    The company might be able to get away with such a cavalier (or should
    that be sierra !) attitude during the recession but personally I
    consider the car scheme as part of my pay package (So does the Inland
    Revenue - they tax it accordingly !!) and would be very unhappy at
    being told what I had to drive (as I pay tax on it).  Remember, company 
    cars are not a free gift, they are salary (even if a tax efficient way
    of being paid :-)  ).  When the recession is over (if ever ?) digital
    will need to compete with other companies for skilled people and I
    consider a decent car scheme as another weapon in the armoury
    
    If the company offered a realistic amount of cash/expenses as an
    alternative enabling me to buy a secondhand car I really wanted then I
    would definitely take it.
    
    Stevie,
    
    (how do you make "half a smiley" ?)

    Re .17
    
    Not a difficult calculation really Andrew.
    
    Cost Centre cost per car - about �5,300 pa x 4,000 cars = �21M +
    Add in the L8 and above supplements (paid by DEC), it isn't difficult
    to get to �26M.
    
    Doug

    	I've avoided contributing my own tale of woe to this topic
    	(there's been plenty of those already); or adding to the rumours.
    
    	HOWEVER, the next reply is a command procedure that formats the
    	cars-for-takeover pages of VTX into a form that is typeable and/or
    	printable.  I'll await official announcements as to who might
    	(apart from me) find this useful.
    
    	Ian.

$!	Instructions:
$!	Extract the cars for takeover pages from VTX to a file
$!	called CARS.INP 
$!		e.g. from VMS VTX press 
$!			<PF1><KP5>
$!			 Command: SAVE/ALL CARS.INP
$!
$!	Execute this procedure to create a readable file CARS.TXT
$!	
$ open/read in cars.inp
$ open/write out cars.txt
$ esc[0,7] = 27
$loop:
$ read/end=read_end in line
$ len = f$length(line)
$ if f$locate("TAKEN-OVER",line) .ne. len then goto loop
$ if f$extract(0,6,line) .eqs. "''esc'[4;1H" 
$ then 
$	write out " "
$	line = f$extract(6,len-6,line)
$	len = len - 6
$ endif
$ if f$locate(esc,line) .ne. len then goto loop
$ write out line
$ goto loop
$read_end:
$ close in
$ close out

>    If the company offered a realistic amount of cash/expenses as an
>    alternative enabling me to buy a secondhand car I really wanted then I
>    would definitely take it.
    
    Stevie,
 
	I have done the sums - on numerous occaisions, and the cost of running
	a 2.0l gti, new (well, ex-demo) every 3 years, is much cheaper than 
	getting it through the lease scheme

	so is a peugot 1.3 GR.

	Heather

    Nah, you must be joking. It is probably cheaper to buy yourself IFF you
    don't ket your company car paid for by the company, i.e. you pay the
    whole lease cost.
    
    I pay 542 pa (gross) towards mine. This means about 400 net, i.e. 34
    per month. The CCT is I guess around 45 per month, so I pay a total of
    probably 80 per month, or 1000ish per year, for a brand new GTi every
    60,000 miles.
    
    When I last ran my own car (a second hand MG Metro) it cost around
    2,000 per year net, i.e. bank loan, insurance, maintenance. On top of
    that you could add depreciation.
    
    There ain't no way running your own car is cheaper under these
    circumstances !
    
    Colin

>    I pay 542 pa (gross) towards mine. This means about 400 net, i.e. 34
>    per month. The CCT is I guess around 45 per month, so I pay a total of
>    probably 80 per month, or 1000ish per year, for a brand new GTi every
>    60,000 miles.
>    
>    When I last ran my own car (a second hand MG Metro) it cost around
>    2,000 per year net, i.e. bank loan, insurance, maintenance. On top of
>    that you could add depreciation.
>    
>    There ain't no way running your own car is cheaper under these
>    circumstances !
    
        Colin, 

	You pay 542 +3400      			   3942
	you pay tax on 2550 of this benefit       637.5
	(assume less 18,000 miles, 25%)	---------------	
					        4579.5
	Digital give you		        3400.0
					---------------
	Total cost to you		       1179.5
	(thats fairly close to the 1,000 you estimate)
	
	However, if you took the money instead

	you get					3000
	less tax (assume 25% again)		 750
					------------
	you would get an extra			2250
	and you wouldn't pay the                1179.5
					---------------
						3429.5

	therefore if you took the cash rather than the car, you would get an 
	extra 3429.5 a year net in your fist, if you only need 2,000 a year
	for the car you want, you would be much better off taking the money.
			
	Heather

�    I pay 542 pa (gross) towards mine. This means about 400 net, i.e. 34
�    per month. The CCT is I guess around 45 per month, so I pay a total of
�    probably 80 per month, or 1000ish per year, for a brand new GTi every
�    60,000 miles.
    
�    When I last ran my own car (a second hand MG Metro) it cost around
�    2,000 per year net, i.e. bank loan, insurance, maintenance.
    
    Don't know how correct your figures may be, but you have missed out
    that you would be paid 'a couple of grand' if you choose not to
    take the car (if entitled to the car allowance).
    
    So, to work out comparisons, you would have to allow for the lease car
    costing (from your figures) about �1000 per year, but losing you [say]
    �2000 per year.  That makes a 3000 pound difference.  Depends how the
    other costs come out (and which vehicle you could be considering), but
    your Metro example is cheaper.  I am sure it can be worked out that for
    some people it is better to take the money and fund your own car.
    For others (particularly for those with higher mileages, perhaps), it
    may be cheaper to take the company-funded option.
    
    Other points you should consider are the convenience of having a car
    provided for you in the case of accident/breakdown, as against the
    chance of you not having a car at all if you change jobs...
    
    J.R.

    re:24
    
    OK, H, let's pursue this a bit. Le's say that by opting out of the
    lease I am better off by ~3,400 (your figures). Now, to run my own
    car, I reckon the costs would be as follows (assuming we are comparing
    apples with GTis)
    
    First, I propose to own the car for 60,000 mile, approx 2.5 years.
    
    Initial purchase cost 12,000 (this is probably optimistic, depending on
    the car).
    
    Depreciation of, say, 5,000 (again, probably optimistic). Therefore,
    every 2.5 years I need to fund 5,000 + inflation to get me back to the
    starting point. I'm not sure of the cost of money, but let's say that a
    personal loan for 5,000 is around 200 per month, not including
    redundancy protection etc. So, over the period the bank loan will cost
    me 200 x 12 = 2,400 per year.
    
    Now, insurance. 1.8 GTi, no no claims, any driver, business and
    pleasure, 700 is probably near enough. Total cost now 3,100.
    
    Now, servicing. Four services per year at around 100 pounds (actually,
    they're a bit more than this, but I'm being generous). Servicing = 400.
    total so far = 3,500. Add to this car hire for each service, say 60 per
    year. Total now 3,560.
    
    Next, Road Fund Licence of 110. Total now 3,670.
    
    Next, tyres. Three front sets plus one rear set over 60,000 miles is 8
    tyres. 100 pounds each = 800 pounds, around 320 per year. Toal so far
    3,990.
    
    Next, National Breakdown. Cover per year at say 100, total now 4,090.
    
    So, where are we, total costs per year are
    
    Cash         2,400
    Insurance      700
    Servicing      400
    Car hire        60
    Road tax       110
    Tyres          320
    Nat. Breakdown 100
    
    Grand Total  4,090
    
    So far, by taking the cash equivalent I'm 700 down per year net, for
    which I have to earn 930 per year. I have not included things like
    exhausts, which I don't typically need to replace in that period
    (though that's debatable with the CAT on the Renault). I have also not
    included the Digital Difference, i.e. peace of mind if anything goes
    wrong.
    
    Whilst each case is very different, I think you'll agree that I've been
    generous with some of the figures, and I'm still significantly better
    off by taking the lease car.
    
    Now, for my next thesis .....
    
    Colin

    Sorry if I'm being a bit thick here (though I did spot the missing 3
    grand from your previous note), but aren't you ignoring the fact that
    in your example you've still got the car at the end of it?
    
    Joe.

    Without going into excessive calculations, I can't help feeling that
    the cost of a bank loan, 3 years depreciation and 3 years fully comp
    insurance, as well as servicing and repairs on, say, a new Cavalier
    GL would come to somewhat more than the couple of thousand + lack of
    tax paid.
    
    An example is my last car, which I just sold after a year of
    ownership... this was an F reg (I couldn't afford new!), which
    depreciated by �2000, insurance (�500 for third party), + various
    services etc.  I would estimate that the cost for a new car + fully
    comp insurance would easily be twice this, so would be a figure in
    the range �5500 - �6000 (and no it wasn't a sports car!)
    
    Chris.

    re .27
    
    yes, but one which may be 100000+ miles!

    re:27
    
    >Sorry if I'm being a bit thick here (though I did spot the missing 3
    
    That's OK. Don't worry about it ! ;-)
    
    >grand from your previous note), but aren't you ignoring the fact that
    >in your example you've still got the car at the end of it?
    
    No, I'm not. What I've costed is the depreciation, i.e. I'm assuming
    that a 12,000 car depreciates by 5,000 to 7,000 over 60,000 miles and
    2.5 years. Therefore, I will have a 7,000 asset to put towards the new
    car, and will require a further 5,000 loan.
    
    This in fact looks at life thro' rose tinted gogs, i.e. the cost of an
    equivalent new car will be much greater than 12,000 in 2.5 years, and
    it is very unlikely that a garage would be me the full 7,000 for the
    old vehicle.
    
    'Nuff said. End of rathole ?
    
    Colin

    Plus your missing the fact that you pay interest on THE WHOLE VALUE
    during the period (who's got the cash value of a new car stashed away?)
    
    So what you really have to cover is:
    		Interest on Capital over whole period
    		loosing depreciation value over period
    		Tax and insurance over whole period
    		Service and running costs over whole period
    		Support services (relief car/breakdown cover)
    Plus managing it all yourself, and all out of the measly figure DECpays
    you, no wonder you need a rise!
    
    It's amazing that everytime this argument comes up the protagonists of
    take-the-money always underestimate all this.
    
    Richard

�    Plus your missing the fact that you pay interest on THE WHOLE VALUE
�    during the period (who's got the cash value of a new car stashed away?)
    
    Not a straight answer, but if you had bought your own car, you would
    have a proportion of the money for your next car right there.
    
    If you had a lease car, you have nothing at all towards your next car.
    
    The extra money you would receive (in lieu of company car) would be
    another part of this funding.  Not the same as having the cash at hand.
    
�    So what you really have to cover is:
�    		Interest on Capital over whole period
�    		loosing depreciation value over period
    
    These are the two awkward variables in the equation.  It would all
    depend on how you funded the purchase of your replacement car.
    
    You are correct in stating that interest is to be accounted for,
    but not on the whole value of the car.  The depreciation is also
    debatable, since that only shows when purchasing the next car.
    (but should still be shown somewhere/somehow in the equation).
    
    J.R.

Several years ago I calculated that if you *need* a new car the lease scheme
is probably cheaper.  If you are happy to buy a car that is a couple of years
old then that will almost certainly be cheaper than the lease (assuming in
both cases that you keep the car for about 3 years).

The tax changes in the intervening years help tilt the balance point away
from the leased car.

jb

    	Sorry if this sounds a bit simplistic, but if leasing works out
    	cheaper than owning your own, how do PHH and Hertz make any money?
    
    	Everybody's situation is different, of course, but for me the tax
    	advantage dissapeared long ago. I have a zero cost car (which therefore
    	costs �3400), and my tax hit is over �4100 I can't see where my
    	benefit is.
    
    	Ian.

>    	Sorry if this sounds a bit simplistic, but if leasing works out
>    	cheaper than owning your own, how do PHH and Hertz make any money?
    

Because they get the cars considerably cheaper than a private 
customer...by �1000's

    Re. 34 & 35.
    
    And... Digital Pay PHH/Hertz the value of the car over 3 years, then
    they sell it to make their profit.
    
    A friend in the know, told me that they both make about 25-30% nett
    profit on each car.
    
    They are a business, just like us .!!!! ????
    
    Andy

    
    I think you'll find that the allowance is more the �3400.
    That figure is 80% (or slightly less now) of the real allowance 
    should you decide to take the cash instead of a car.
    
    Please correct me if I am wrong.
    
    JN.
    

    The allowance, I believe, is still �3400 but the figure paid to lease
    company includes VAT (which DEC claims back) is around �4000.
    
    Roy

    The lease vs buy decision is greatly based upon the sort of driving you
    do.  Someone who gets the car allowance but does less than, say 5000
    business miles per year may be better off buy thier own.
    
    If you do 25,000 business miles per year, the depreciation, servicing
    costs etc become huge.  I suggest in this case leasing is better.

I don't think business miles has anything to do with it. Depreciation, servicing,
etc are to do with mileage whether it's business or not.


	Ian

>>>I don't think business miles has anything to do with it. Depreciation, servicing,
>>>etc are to do with mileage whether it's business or not.
    
    True, I guess most high mileage users will do most of those miles on
    business, but I do accept there will be some who do 25,000 private
    miles and 5,000 business miles.
    
    Serves me right for nit picking in a different note.

The reason I joined the lease scheme 5 years ago, was that after being without 
a car for 3 months after a Viva had performed an interesting manoeuvre in front 
of me....I decided that the "free" hire car bit of the lease scheme was very 
attractive....

Now with this extra tax stuff, I'm not so sure !

    Once and for all, lets put this to bed....
    
This is a per annum ready reckoner. you start with the same net base salary
in both cases. It calulates how much you pay from your pocket. Just fill in
the 'x's with what you anticipate to pay.


				LEASED			OWN
				 �			 �

depreciation			0			x,000
interest on total loan		0			x00
cash supplement (net @25%)	0			-(2,550)
insurance			0			x00
servicing			0			x00
tyres				0			x00
road fund licence		0			x00
any other running cost		0			x00
National breakdown		0			50
company car tax		(25% of lost allowance)		-
lease contribution      (67% of gross amount)		-
			--------------------------------------
money out of pocket  	        ?   			 ?

so for example if I was comparing a brand new cavalier 1.6L for 3 years.

				LEASED			OWN
				 �			 �

depreciation			0			2,000
interest on total loan		0			1800
cash supplement (net @25%)	0			-(2,550)
insurance			0			500
servicing			0			400
tyres				0			300
road fund licence		0			110
any other running cost		0			-
National breakdown		0			50
company car tax			1025 (25% of 4100)	-
lease contribution      	0			-
			--------------------------------------
money out of pocket  	        � 1025   		� 2610

So, If you buy secondhand (for a smaller depreciation), and get interest free 
credit then it's cheaper to buy.

Huw.                                 

    As a bean-counter, I feel obliged to put some logic into this
    discussion:-
    
    How do PHH/Hertz make money?
    	- Big discounts
    	- Cheap borrowing
    	- Depreciation (or equivalent) deductible for Tax
    
    Lease or Buy?
    	There are some variables person to person
    	 - Individual Tax rate (affects cost of tax bene and net salary)
    	 - Car - affects tax bene
    	 - Business miles - affects tax bene
    	 - Personal cost of borrowing and/or opportunity cost of spare cash
    used
        Having got the above you need to do a NPV or Discounted Cash Flow
    calculation since the cash flows are completely different in each case.
    	Take a 3 year period and list all your net (after tax/ money in the
    hand) cash flows in and out by month for the 2 scenarios.
    	Plug them all into a 20/20 or 1-2-3 s/s or an HP calculator.
    	Enter your cost of capital (borrowed everything = rate of interest,
    used spare cash= opportunity cost eg Deposit acct rate or can be a
    combo)
    	Request NPV for each scenario (ie discount all your cash flows to a
    "day 0" value.
    
    You now have 2 comparable "day 0" values or Net Present Values - the
    lowest is therefore the cheapest deal.
    
    'course, here in Portugal it's easy - there's no taxable benefit on
    company cars!
    
    Rgds John
    (who will probably face this decision on my return next year)

    
    500 to insure a Cavalier 1.6?
    
    400 to service?
    
    300 for tyres?
    
    Inflated figures help the leasing side of the table, but don't convince 
    many.
    
    I'll give you insurance (But I wouldn't pay anything like that
    myself!), but 400 will buy you 4 services for a Cavalier and it only
    needs servicing every 9000 miles! 300 will buy a full set of tyres
    (although if you've had 4 services in a year, you'll need 'em! :^) ).
    
    Mark

    Mark,
    
    They are example figures!  The reckoner is there for people to
    substitute their own figures, and make their own judgement!
    
    Huw.

    
    Apologies Huw, I thought you were trying to make a point. 
    
    As a ready reckoner your table is excellent.
    
    Mark

    re:44 see .26 !
    
    Note - I was comparing like for like. If I was prepared/able to buy a
    10 year old Cortina, then I'd be quids in. With my mileage
    (25,000-30,000) per year, and spending a lot of time with customers (in
    my car even), this is not an option.
    
    Plus, I imagine it would be very difficult to get an interest free loan
    on a second-hand car.
    
    Colin

    One big thing persuading me I ought to comeout is the fact that once
    you've got a lease car you have it for 3 years. If it's a lemon you
    can't do anything about it and you quickly get fed up. 
    
    If you buy it you can always trade in for another.
    
    Richard

>    OK, H, let's pursue this a bit. Le's say that by opting out of the
>    lease I am better off by ~3,400 (your figures). Now, to run my own
>    car, I reckon the costs would be as follows (assuming we are comparing
>    apples with GTis)
>    
>    First, I propose to own the car for 60,000 mile, approx 2.5 years.
 
				etc..........


	Colin, my figures said you'd be 3,400 better off taking the money, 
	rather than taking the lease car you currently have.

	You said you needed 2,000 a year to run the car you wanted, therefore 
	you would be better off out of the scheme.

	You are now saying you need loads more - well it depends on what you
	want and your personal circumstances.

	I can tell you I put 200 quid a month away to a Building Society, and 
	fund everything for my car from this, the tax/insurance/wheels/AA/
	upgrade to new car/valet etc.......

	I run a 2.0l GTI, I buy at 3 months old, and replace at 3 years old.

	When I started I put 100 a month in, I've gradually increased it to
	200 over the 8+ years.
	
	Heather

    re .44, .46
    
    The insurance for a 1.6 Cavalier L would be a rather more than �500 for
    me... at 24 years I get really screwed by insurance companies, who
    would ask for around �1000 or more for comprehensive.
    
    Depreciation in the first year on a new car is 30-40% at the moment,
    so add another �1500 on to that!
    
    Chris.
    

>>>    Depreciation in the first year on a new car is 30-40% at the moment,
>>>    so add another �1500 on to that!
    
    It's high, but not that high.  Maybe 30% of list price, but not 30% of
    what most people actually pay.  (ie discount of 12%-17% for "commodity
    makes")
    

    
    If, like me, you like motor cars that take you over the �19,250 limit,
    & if you get hit for >25% tax, most efficient options for the
    mechanically aware seem to be :-
    
    	a. take the money
    
    	b. nip down to Blackbushe & buy ex-fleet 18 month-24 month
           motorcar. Easily bought with under 20k on clock for well under 
           50% of new price -- may be nearer 30% on foreign exotica that
           frighten the trade.
    
        c. even smarter alternative is to buy nice, old, M635CSi or
           similar, & run as limited-mileage classic. No depreciation,
           low cost insurance. Not as easy if you do 30k miles p.a ...
    
        d. if you can afford it, stuff the money into AVC's so that it is
           untaxed. 
    
    
        Seems logical to me. What do the accountants think?
      
        Colin
                                                           

    Just seen a memo, which states you get:
    
    30% discount  on current lease price if you take over a car from the
    VTX list
    
    20% discount if you take one over for 3 months before ordering your car
    
    
    BARGAIN!! All cars will be valeted and serviced  before hand
    
    Greg

    This topic is also being discussed in UK_DIGITAL note 647.
    
    Roy

           <<< ROCKS::DISK$APPL01:[NOTES$LIBRARY]UK_DIGITAL.NOTE;1 >>>
         -< Matters pertaining to DIGITAL and its employees in the UK >-
================================================================================
Note 647.7                    Car policy too soft?                       7 of 13
CHEFS::NICKOLLSM "Marina Nickolls"                  162 lines  16-OCT-1992 16:55
                    -< Original memo from Alastair Wright >-
--------------------------------------------------------------------------------
                  I N T E R O F F I C E   M E M O R A N D U M

                                        Date:     14-Oct-1992 06:34pm BST
                                        From:     Alastair WRIGHT @RES          
                                                  WRIGHTA AT A1_CHEFS at SUBURB at REO
                                        Dept:     BOM
                                        Tel No:   (7)830-3012
                                        Doc No:   010141

TO: See Below

Subject: I/A: RE. "GETTING BACK TO PROFITABILITY"

To : Management Forum
     (For onward Distribution)

cc : HRO


In my memo of 25th September, "Getting Back To Profitability", I mentioned that 
the Car Scheme costs Digital �26 million a year and that a radical overhaul of 
the scheme would be needed if we were to achieve major savings.  I also 
mentioned that we would be introducing some short-term changes.  This memo 
explains one of these.  

Please ensure that you pass this information on within your organisation.  

As a consequence of the recent restructuring, there has been an increase in the 
number of lease cars returned to Fleet.  We could return these cars to the Lease 
Companies but we would incur substantial lease severance charges but to have the 
cars lying idle while still paying the lease costs also costs us money.  It 
makes sense to reduce the expense incurred on these cars but to do so we need 
your help.    

Towards the end of your existing car lease, you should look on VTX at the list 
of cars that have been returned to Fleet mid-lease.  You can then choose to : 

either 

a)	  take advantage of a 30% discount on the lease price of 
          a mid-lease car which you will run until its natural 
          lease expires 

or

b)	  take advantage of a 20% discount on the lease price of 
          a mid-lease car which you run for three months before 
          ordering the new car of your choice.  


This will save Digital �150,000 per annum and could save you money too.   

This opportunity is being introduced on a voluntary basis.  However, if these 
cars are not taken over by willing individuals, we will have little choice but 
to insist that all employees, without exception, take on a returned car for at 
least a 3 month period.  

You will find a full list of cars available for take-over on VTX under the "Car 
Fleet" heading.  Anybody ordering a new car similar to one that is available for 
take-over, will be prompted by Fleet Administration to reconsider their order.  

On the following pages there is a set of Questions and Answers on this subject 
which you may find helpful.  If you have any further questions, please contact 
Fleet Administration.  

Regards,


                             QUESTIONS AND ANSWERS


Q    Why can't I keep my current lease car for longer than its current lease 
     period?  Won't this cost less than leasing a new one?

A    Cars are priced for a lease period and number of miles, currently 36 
     months/60k miles.  If we extend beyond this period or exceed the mileage, 
     the leasing companies impose a heavy charge.  


Q    The last time I was asked to take over a mid-lease car, it was filthy and 
     the brakes did not work.

A    All mid-lease cars will be valeted and serviced within a week of being 
     returned to Digital.


Q    I tried to get a test drive in one of the take-over cars, but Fleet could 
     not find the car.  

A    One of the problems that Fleet Admin has been experiencing recently is that 
     people take a car for a test drive and then don't return the car or let 
     Fleet know where it is.  

     We will be encouraging people to return their cars to the office in which 
     they work and hand the keys to their manager.  There will be a process in 
     place which will help Fleet control the returned cars which are lent out 
     for a test drive.


Q    When I looked at the lease price of the take-over cars they were more 
     expensive than those on the current Preferred Car List.  Why should I pay 
     more for a second-hand car?

A    Whilst this is true in some cases, in most cases the 'old' price reflects 
     the addition of several options.  A similar car with the same options would 
     have a comparable cost today.  


Q    With this discount scheme, will I be able to select a car from a supplement 
     band other than that to which I am entitled?

     Yes, so long as you do not spend more than 20% of your base salary in doing 
     so.  


Q    How will I be affected if there is a manufacturer's increase in the price 
     of the car I select during the three months I lease the take-over car?

     Currently, the driver price you are quoted is the price you will pay.  Any 
     increase is picked up by Digital.  This is something we will be looking at 
     as part of the major overhaul of the scheme.  



Q    Will the Inland Revenue be informed that the company is further discounting 
     the lease cost of the car?  Will I be liable for tax on the amount 
     discounted as this is a clear benefit to me?

A    If as a consequence of the discount you pay less than your car supplement, 
     you will pay tax and NI at the normal rate on that money which you do not 
     spend.  There is no reason for us to communicate this discounting to the 
     Inland Revenue.  Normal Inland Revenue Scale Charges would of course apply.  
     


Q    If I choose the option to take a car until its natural lease expires, can I 
     return it after three months?

A    No.  This is an either/or decision.  
 

Q    Alastair Wright's memo mentioned that "new hires should take an existing 
     lease car".  Will they also receive the 30% discount?

A    No.  There will be an up-to-date list of available cars together with their 
     prices in the relevant supplement band on VTX.  They can make their choice 
     from this list.  


Q    I took over a mid-lease car last month for the duration of the lease.  Can 
     I have the discount until the end of the lease?

A    No.  


Q    I am a non-supplement holder and currently lease a company car.  Will I be 
     expected to take a mid-lease car at the end of my current lease?  If I 
     choose to take a mid-lease car, will I be eligible to receive a discount?

A    The answer to both questions is No.

>>>a)	  take advantage of a 30% discount on the lease price of 
>>>       a mid-lease car which you will run until its natural 
>>>       lease expires 
    
    Is that 30% off the entire lease price, or just the part above the
    qualified users amount?

    	The Fleet page of VTX has been inaccessible since last Friday,
    	which makes taking over an existing car that much more difficult!
    
    	Ian (whose been attempting to take over a lease since August).

>    
>        Ian (whose been attempting to take over a lease since August).

Silly question: have you tried phoning?

I took over a lease two years back. Spoke with a very nice lady who told me 
where the car was parked. To have a drive and to take it home if I liked it.

We sorted the paper out during the following week.


I hope it is that simple this January when I must change again.

Re: .60

>I took over a lease two years back. Spoke with a very nice lady who told me 
>where the car was parked. To have a drive and to take it home if I liked it.


are you *SURE* this was at Digital ?


if it was, someone forgot about all that red-tape !!!!

    
    I've taken over the lease on cars on two seperate occasions.
    Both times were without hassle.
    
    JN.

    If you take over a car that has been unused for a while, make sure 
    the tax disc is valid as car fleet hold onto them if it is due for
    renewal (a colleague got a surprise after collecting a car that she
    had arranged to take over to find the tax disc had run out at the end
    of August!)
    
    Roy

                  I N T E R O F F I C E   M E M O R A N D U M

                                        Date:     21-Oct-1992 12:02 BST
                                        From:     GINA ELBOTH
                                                  ELBOTHG AT A1_CHEFS at SUBURB at REO
                                        Dept:     PERSONNEL
                                        Tel No:   7830-6448

TO:  RICHARD H DAVIES @ REO


Subject: CARS

Further to your note to Alastair Wright regarding the discount on 
mid-lease cars.  I have agreed to answer the question and will be 
happy for you to put it into Notes.

1	The discount is on the driver price.

	eg
		Vaux Calibra 8v	Driver price 1000
		Discounted price 1000 - 30% = 700.

2	Where the car is a zero cost car there is no discount.

	Let me try to explain this.

	Digital's Compensation and Benefits programme is such
	that we give employees who are eligible, a car in order
	to do their job (a minimum standard car).  Where 
	employees move further up the organisation we give them 
	the same minimum car in addition  to a supplement, a
	different sum at the various levels.  

	Individuals then have the choice to take a minimum car
	at no cost to themselves, or elect to pay the extra for
	a car of their choice.  How they pay for this extra is
	up to them.  If they are eligible for a minimum standard
	car, then they can commute up to 20% of their salary to
	up-grade their car.  If they are eligible for a 
	supplement, they can spend some or all of their 
	supplement on the car of their choice and, if they so
	wish, up to 20% of their salary.



	
	

    re: Taking over a car
    
    
    It is no longer that simple.  You first have to organise a teest drive. 
    Fleet must know exactly what TIME you will arrive to test drive the
    car,  you cannot test drive over a weekend - as cars are at Digital
    offices and my nearest Digital office is 1.5hrs from the customer site
    where I am currently based this is impossible for me.
    
    As fleet no longer has any permamnent employees and the longest serving
    temp has been there 2 months there is no-one who can make a decision or
    'bend' the rules - even a little bit.  This is why you can't use an
    existing lease car even if its sitting in a car park, you ahve to get a
    hire car.
    
    As far as I can see there are very few cars for take over that are
    low-cost.  I test drove a 205GTI - I had to arrange for my other half
    to collect it from Reading - it took him 1.5 hrs to get it started and
    keep it going and he had a 2 hr drive without any radio/tape as the
    coded radio wouldn't work following the battery being flat.
    
    I am plannign to go to the Motor Show this weekend, and I for one am
    giving up on taking over a car from the list.
    
    
    
    Xtine

    Another problem is finding a car available for takeover. Even though
    the Fleet section is back in VTX, almost all the cars in the 34 pages
    of the take-over list have gone, as have many others that never even
    made it onto the list. Apparantly business has been booming sincethe
    discountswere introduced.
    
    Re -.1 
    Ironically my own Peugeot 205GTi 1.6 (lease cost zero, starts every
    time) has been available since August - if only Fleet would accept it!
    
    Ian.

    According to the car info bit of VTX, the minimum mileage that must
    be completed before the company will pay for replacement tyres is
    16000 for PHH and 10000 for Hertz (does PHH fit more durable tyres
    or something?? :-) )  Question is, how long can tyres usually be
    relied on to stay above the legal minimum tread?  I KNOW this is a
    stupid question, but I honestly can't remember!
    
    Chris.

    
    Toyota quote 9000 miles for their Bridgestone Potenza tyres which are
    the only ones they recommend for the 'older' style new shape MR2's
    
    Hertz have been made aware of this.
    
    POL.

    
    My Cavalier SRi can manage about 12000 on the fronts... and its from
    PHH 
    
    :-(

    Come on, the tyres question has been done to death elsewhere 1614.8
    onwards (found by dir/title=tyre and pick the biggest one)
    
    Can we keep this discussion on the feasability of taking over an
    existing lease car please)
    
    Richard

    Back on the subject of take over, a colleague was dicussing yesterday:
    From Fleet VTX:
    
    -----------------------TAKEOVER-----------------------------------
    397.
    RENAULT 21 GTX       H             5            1118     UNLEADED
    SAVANNA                            (FEB 93)              FAMILY PACK
    (IN READING)            NOT AVAILABLE UNTIL 30/10/92
     
    Minus discount = 782.6
    -------------------------------------------------------------------
    
    -------------------------NEW---------------------------------------
      057      21 2.0 GTX SAVANNA EST             519       5
      FAMILY PACK                                 251         SAVANNA
                                                  ---
    -------------------------------------------------------------------
                                                  760
    So where's the incentive?
    
    I think fleet should look at this type of situation and make the
    discount based on the lower of existing lease, OR NEW LEASE COST for an
    equivalent.
    
    i.e. offer the takeover at 70% of the 760.
    
    Richard

    re .71
    
    BUT you don't know if the takeover Savanna has lots of extra's or not,
    maybe meetaliic paint, CD, leather seats, who knows!
    
    Greg

    RE 1913.72 Oh yes you do
    
>>           <<< Note 1913.71 by TIMMII::RDAVIES "An expert Amateur" >>>
>>                     -< When is a bargain not a bargain? >-

>>    Back on the subject of take over, a colleague was dicussing yesterday:
>>    From Fleet VTX:
>>    
>>    -----------------------TAKEOVER-----------------------------------
>>    397.
>>    RENAULT 21 GTX       H             5            1118     UNLEADED
>>    SAVANNA                            (FEB 93)              FAMILY PACK
>>    (IN READING)            NOT AVAILABLE UNTIL 30/10/92
    
    This column is extra's!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!^^^^^^^^^^^^^
        

    I'd like to know how you find out about the cars that never make it to
    VTX.  I asked fleet to let me know if they got a Cavalier 2.0L... I was
    told in a most snotty (polite, but snotty) mail that I could read VTX
    like everyone else!
    
    
    Oh well... car show tomorrow...
    
    
    
    Xtine

    	The system has completely collapsed.  VTX hasn't been updated
    	since 16th October, very few (if any) of the cars in it are 
    	still available. There is only one person dealing with cars for 
    	take-over and on the rare occasions his phone isn't engaged, there
    	is a pretty good chance that it will be answered by somebody else,
    	who won't be able to help (I've phoned about 15 times this week and
    	managed to get through to the right person only once).
    
    	For various reasons, I *have* to take an existing car. As I stated
    	earlier, I've been trying since August!
    
    	Ian.
    
    
    	
    

    sorry to come back to the lease v buy (opt out) discussion, but I have
    read through all the notes and there has been some serious omissions,
    namely in the tax benefits.
    
    If you purchase a car which you then use for business purposes, you can
    claim tax back on the following :-
    
    Depreciation of 25% pa, for a maximum car value of �10k
    Servicing costs ..as receipted
    Tyres etc         "      "
    Hire car costs  if ever needed
    Interest on loan..again up to �10k
    Insurance
    
    All the above depends on what tax bracket you are on and the % of
    private v business miles that you claim  ie 30k miles pa 15k of which
    are business, as claimed through expenses = an entitlement to 50% of
    your current tax bracket ie if youre on 40% then you get 20% rebate on
    all of the above.
    
    I estimated that for 30k per annum mileage on a 50/50 private/business
    ratio, taking out a �10K loan, allowing �700 for insurance, �300 for
    tyres, Miantenance of �450 pa, that I would benefit by about �1000 per
    year cash in hand.  The main drawback to this is that you claim yor tax
    back at the end of the tax year, and so you have to be able to bear the
    burden of increased outgoings, until you get the tax back. 
    Additionally at the end of the period you still have an asset value for
    the car. 
    
    One person who opted out and who uses the car totally for business,
    reckons hes pocketing �2000 per year, as well as having the market
    value of his car.
    
    Having said all that I cant afford to opt out cos I dont have enough
    cash to fund the extra outgoings prior to claiming the tax rebate..oh
    well....  I have a copy of the tax claim form for info should anyone
    require more info..or ring your local friendly tax office.
    
    Cheers
    Paul

    re .76
    
    That surprises me greatly. If you were using your own car for business
    and only getting 8p for mile (fuel costs) and NOT getting a car
    allowance, then I could understand that claiming against tax would
    be viable. 
    
    However, the fact that the company gives extra money to fund your
    own car to cover the running costs other than fuel rules out the need
    to offset it against tax.
    
    But I guess if what your saying is ok with the tax people then great.
    It just doesn't make sense to me.
    
    Roy

>    However, the fact that the company gives extra money to fund your
>    own car to cover the running costs other than fuel rules out the need
>    to offset it against tax.
 
	Because this money that the company gives you is taxed at your 
	highest rate.

	Heather
	

    I am a new starter to Digital and have just discovered that I may not
    be able to get a new car on the scheme. I have been told by Fleet (...I
    believe that is what they are called) that I must take a Take-over car.
    
    	However all the cars on that list are currently taken and even then
    I do not wish to end up with (...carefull what I say here) an estate
    etc.
    
    	I would appreciate any help as to wether this rule is cast in stone
    and if there are any other options available to me. 
    
    P.S. This is my first Note so I hope its in the right place!
    

    
    I suggest you contact Sally Fountaine @REO (Car Fleet, Reading) who
    recently mailed me details of discounts to EXISTING employees on these
    cars (I am due to replace my car).
    
    Up until now(ish) enployees had no obligation to take on existing cars
    and I don't think there was any formal mechanism to do it (but it could
    be done). Because of the level of leavers in the last 6 months there
    are obviously many cars that have long leases to run. Returning these
    to PHH would cost DEC a fortune so a new scheme was introduced.
    
    For existing employees:
    
    At the end of your current lease you can choose to take an existing
    lease car although you don't have to. What's in it for us? Well you get
    20% off the stated employee cost or 30% off if you keep the car till
    its lease runs out. This can be very attractive depending on what's
    available.
    
    I understood that for new employees they were expected to take on
    existing cars (with no discounts etc) but you should check this.
    
    Richard

    �	However all the cars on that list are currently taken and even then
    � I do not wish to end up with (...carefull what I say here) an estate
    
    	Huhhh!!!  I tried for MONTHS to get an estate off the take-over
    	list, and ended up with a Rover 214!
    
    	The rule that new starters must take a car from the list was set
    	last year at a time when there was a large number of cars without
    	a home. Since then, largely because of the discount being offered,
    	the pool of cars has gone.
    
    	I guess nobody has recinded the rule, but I suggest you speak to
    	your manager about it. In any case, you are only obliged to take
    	a car for 3 months - and it could take that long to get a new one
    	anyway.
    
    	There are several topics in here about our car fleet department, a
    	browse through some recent replies may give you a flavour of how
    	the department operates. :-)
    
    	Ian.

    No rules are ever cast in stone, they're always open to negotiation. If
    all the cars ARE gone obviously that's the easiest let out clause.
    
    Otherwise you'd probably need to show that none of the cars on offer
    are suitable. (I don't know about arguing non-estate could claim too
    big or inadequate handling) but certainly too big, too small, too
    expensive, too powerfull, too underpowered, could all count.
    
    What sort af car would you like/have you been driving?. there may be a
    close equivalent coming up.
    
    The main reason for this rule was that we had several dozen (or
    hundred) surrendered cars, on our books being paid for, but people were
    still able to order another car to go on the expenses. They made the
    discount option for take-overs by existing drivers, with the sugestion
    it may be mandatory if there we insufficient takers. In the event it
    seems to have been so well taken up that they've either run out of
    cars, or been unable to keep the list up to date. So the process has
    achieved it's aim, to reduce unnecessary costs!.
    
    Richard
    
    P.S. You could do Notes> dir/title=word to see if a similar topic exists
    allready. Then reply to that. Don't worry about it being out of date.
    If you do Notes> set seen , then you see each new unseen note automatically by
    using the enter key.
    
    1913 seems to fit the bill, I'll move your's and this reply there.

re .79

I was a newly-qualified user on the car scheme last October (when there were
still some cars available for take-over) and I was told by someone in fleet at
the time that I had to take an existing car. This was before the 3-month option
was announced, but I managed to find a takeover car with only 4 months left to
run and so took over that. I don't get a discount on the user price. Happily 
I've only got another two weeks of driving a Ford before I get back to a proper
car 8^).

Paul.

I've just recieved my PHH fleet card for the new car that came a couple of
weeks ago, and the expiry date is 02/97....

Has the lease scheme been extended to four years now?

Peter.

    �Has the lease scheme been extended to four years now?
    
    I don't know if your question is serious or whether you ommitted a
    smiley, but no the lease are not currently 4 years, they are based on
    36 months but maybe shorter if you expressed a high mileage on the
    order form (>20,000 miles ?).
    
    I don't know if this is a one off but it will save a lot of overheads
    on producing new cards if the leases are extended to 4 years for low
    mileage vehicles.
    
    Roy