Choosing the cash

Before you opt to take a cash alternative and buy yourself a car independently, consider all the costs involved.

Like-for-like, it will probably cost more than a company car, but it does give greater freedom of choice - your firm is likely to restrict you to certain makes or models.

If you take the cash, you won't be paying company car tax any more, but you will have to pay income tax on any allowance in lieu of your car.

Once you know exactly how much is left to fund your purchase, consider the costs you have to cover - deposits and loan payments, road tax, insurance, servicing and wear-and-tear items such as tyres.

There are also personal contract finance plans (PCPs) to consider, which can cover the cost of standard maintenance.

You'll also suffer the sting of depreciation, although the car will be yours so you can sell it on.

A company car is likely to be much cheaper than taking the cash and going it alone, but cash options do often give greater freedom of choice.

You could get an older car and pocket the difference, or buy a bike and really be quids-in.