Which car is recommended for the self-employed person?

The Self-Employed Person

I became a self-employed optician in 2007; by accident more than choice. I was relocating at the time, and so to bridge the gap between being unemployed to finding a full-time job, I decided to locum.

Twelve years on, I continue to be a self-employed Dispensing Optician, living in West London. I provide cover for a variety of businesses, with the flexibility to choose my days and hours of work.

Although there are some plus sides to being your own boss, there are pitfalls to consider too. One of the biggest costs to consider as a locum is the cost of running a car.

I have discussed optical self-employment and tax details in another article, but for now, I will concentrate on the greatest expense; THE CAR.

What car should I buy if I am self-employed?

The reason I pose this question is that I, myself am on the market to buy a new car. I currently drive a Volkswagen, Golf 1.9 TDi that I purchased brand new in 2007. The car has done predominantly business mileage and clocked up in excess of 160k miles. The car still runs smoothly and has never let me down.

So why do I need to upgrade my car?

The answer is because I need to be ULEZ compliant.

Image Credit: ab247.co.uk – ULEZ Compliant

ULEZ stands for Ultra Low Emission Zone. It was introduced by the Mayor of London, in 2019 to manage traffic and carbon emissions in the Central London areas. However, this zone is to be extended by 2021 to include the inner London area bounded by the North and South Circular roads¹.

Towns across the UK, are reducing their carbon emissions to comply with the UK regulations under the ‘Climate Change Act 2008’². Public transport and private cars will all be subject to stringent penalties when used in many major towns and cities including Bath, Birmingham, Glasgow, Greater Manchester, Leeds, Sheffield and many more. Most restrictions go live from 2020.

                                                     Image Credit: Lexology

Since I live in West London, and I drive to businesses in Ealing, Chiswick and Hammersmith, the ULEZ zone will affect my cost of travel. Therefore, I am on the market for a new car since my current car is not ULEZ compliant.

How do you select which car to buy?

Whenever we make important purchases, we weigh up the cost of the product to its features.  It doesn’t matter if you’re buying a washing machine, a laptop or a watch.  In the latter case, a Rolex watch will tell you the time just like a Casio watch would do, but the two brands will vary considerably in price.  What a consumer buys will fundamentally depend on the buyer’s desire for a brand and affordability.  For this reason, I have compiled a list of the most common UK car brands and models in Table 1 to assist with the choice of car purchase.

USED CAR criteria: Midsize car, 5 doors, ease of parking, fuel efficiency & good-excellent condition

Data collection: Which? report, Auto Trader, BBC Top Gear, Car Giant and Honest John

TABLE 1:  (Date of Compilation: October 2019).  IF VIEWING THIS TABLE ON A PHONE, PLEASE VIEW IN LANDSCAPE

* Car Insurance: This is relative to the driver’s age, postcode & other criteria. For these quotes, the person is in their mid 40’s with no convictions and living in West London.

** The Which? Report has shown that BMW accepts AMEX, but when I rang BMW ‘Berry’s Heathrow’, they said that they don’t accept AMEX. It would be advisable to contact your local dealer to confirm if they accept AMEX or not.

When buying a car, we have to look at the cost of the original purchase, the running cost, aftercare/servicing and depreciation.  We also have to consider comfort and aesthetics.  Comfort is essential for daily long commutes.  Aesthetics are important for those that are image-conscious and meeting or travelling with clientele.   The cars of particular interest to me were Audi A3, Mercedes A-Class and VW Golf.  I thought that other self-employed people would benefit from this information so I compiled Table 1 for this article.

To obtain the content for Table 1, I had to scour pages of car magazines and websites to attain the relevant information.   I wanted the cars to have similar specifications, from the ‘used car market’.  Buying ‘brand new’ cars have their advantages such as freedom of options and enticing finance packages³ but they start to lose their value as soon as you drive them off the forecourt.  Brand new cars can drop in value by up to two-thirds of their original value in the first few years⁴.  Hence, for this reason, I will be exploring cars that are a few years old.

Diesel V’s Petrol:

I have only selected diesel cars in my new car search since they use approximately 20% – 25% less fuel than their petrol equivalents⁵.  I travel approximately 10k – 15k miles per annum, on the motorway and therefore the diesel car is more proficient.

          Table (2) courtesy of theautostore.co.uk

Diesel cars are the optimum choice for business milage since they are better for long-distance driving. The price difference between petrol and diesel fuel is getting closer but the diesel cars yield more energy and therefore, refuelling is required less often than the petrol cars.

For the most comprehensive information on diesel cars visit: dieselinformation.aecc.eu

Image Credit: Net Car Show, Mecedes A Class, Audi A3, Volkswagen Golf

Price

Of all 6 mid-size cars, of similar ages and mileage, the best price was from Vauxhall, Astra.  Checking prices at Car Giant, Vauxhall and Auto Trader, in this age group it was only possible to primarily source the 1.6CDTi model.  To quote the Which report, in view of the Astra cars, “Diesel motors are all 1.6 litres in size” with variations in ‘brake horsepower’ depending on the model type.  The Astra 2.0L diesels are available in much sportier variations such as the SRi.  All of the other car brands varied in price from £13,000 to £16,000 with the Mercedes, A-Class coming out as the most expensive.

Carbon Emission

The carbon dioxide gases emitted from the car exhaust are measured in grams.  The carbon emission is calculated as the amount of carbon dioxide produced for every kilometre that the car drives⁶. Each car will have its carbon emission recorded as grams/km of CO₂.  All 6 cars are ULEZ compliant and all of them have low carbon emissions.  The Vauxhall Astra and Mercedes A-Class were the lowest for carbon emissions.

Annual Road Tax

There are several eco-friendly cars on the market which are Road-Tax Free.  These will be the electric and hydrogen fuel-cell cars⁷.  The only reason I will not be purchasing these cars is that they are more expensive to buy, with the greatest depreciation and the electric charge points are not easily accessible at present.

The cars in Table 1 were all, on average within tax-bands B or C which subsequently account for a charge of £20-£30 per year.  When you compare the price of purchasing an electric car to the relatively low tax-bands of the listed cars, it works out much more cost-effective to buy a low tax-band car.

Car Insurance

The cheapest car insurance was for the Ford and Vauxhall options.  Audi, unfortunately, will cost a lot more to insure.  When compared to the other German contenders on the list, the insurance premium for the Audi was just a little bit too high.

Ford Focus. Image Credit: Net Car Show

Purchase Options

Wherever you buy a used car from, whether it is direct from a dealer or a car hypermarket, you have the option to pay outright or on a payment scheme.  However, it is always good to know if companies accept credit cards since some credit cards offer better interest rates on their credit card offers.  All of the listed dealers accepted credit cards for deposit payments.  Only Audi accept American Express.  If you are savvy at collecting reward points from credit card companies, it may be worth paying the car deposit with a credit card.  If you are in the market to buy an Audi, you will gain quite a few Avios points as a bonus reward by using your Amex.  Of course, this is only a bonus if you pay your credit card bills off immediately without incurring interest.  If you are buying from a car market or auction, perhaps check in advance how they take payment.  Also, shop around for car payment plans or speak to your bank about a low-interest loan towards a car.  Calculate which option suits you better. It is always advisable to do your calculations before viewing any cars.

Extra Car Features

Car ‘extras’ are custom selected when buying a brand new car, so in the used car market you get what is available at the time.  Second-hand cars with extra trims and features may cost a fraction more but they are still considerably cheaper than what you would be paying as a brand new vehicle.  All of the cars reviewed came with some brilliant extras.  From 2017 parking sensors were on all of the cars that I checked and most of them had a built-in Sat-Nav system.

Safety/Speed/ mpg

The ‘Which? Car Report’ gave all of these listed cars an impressive 5 out of 5 scores for safety standards⁸.

If you’re travelling at peak traffic hours, it’s important to have a car with a quick pick-up (torque power) and responsive speed (brake horsepower).  Having a sluggish car at a roundabout can be frustrating.  All of the cars gave an average speed of 8.3 seconds from 0-62mph.  The only exception was the Astra with a performance of 0-62mph in 9.2 seconds (due to the smaller engine).

In terms of engine size and fuel efficiency, the BMW 1-Series and the Vauxhall Astra came up top for the best results with scores of 70.6 combined mpg and 72.4 combined mpg, respectively.  The Mercedes A-Class was the least efficient of all the cars assessed.

Other

Since cars are used for business as well as personal use, it is good to know the boot capacity.  You may be carrying a lot of work-related goods in your car, or you may need a car boot that accommodates a pushchair.  Either way, the larger the boot cabin, the better.  In the mid-size car range, Audi and VW gave the best boot capacity and Mercedes was the smallest.  For people that cannot access the Which? Car reports (since you have to be a paying member), I have included the Which?  percentage rating for each vehicle.  Audi, Ford and Volkswagon all scored 70%+, with the others just slightly lower in the percentage ranking.  Nonetheless, these cars have all scored well in the Which? Report.

Conclusion

The final result for my personal best recommendation would go to Vauxhall, Astra.  From the reasonable purchase price, lowest car insurance, best miles per gallon to low carbon emissions and large boot space, this car ticked all the boxes required for a self-employed person.  Aftercare and servicing are also reasonable from Vauxhall.  Other impressive reviews worth reading are from Whatcar.com and Autocar.co.uk.

My 2nd choice is the Volkswagon, Golf.  I can speak from experience that this car is a joy to drive.  I have driven this car through the most testing country terrain and it has never failed me.  My VW Golf is 13 years old, 160k miles on the clock and it has never broken down.  But, with my own experience pushed to the side, the stats for this car are equally impressive.  ‘What Car?’ has given this car an outstanding score of 5/5, ‘Autocar’ has given this car a rating of 4.5/5, and the most critical car reviews are from ‘Top Gear’ who also gave the Golf an impressive 8/10.  All of the reviews give the Golf high-reliability scores.

My third choice from the list was BMW, 1-Series.  I am not a fan of the BMW manual gearboxes but the automatic is good.  The carbon emissions are low, with a cheap tax-band, reasonable car insurance group, nice boot space and an impressive combined mpg.  ‘What Car?’ rated the BMW 1-series as 4/5 rating, ‘Top Gear’ gave a rating of 7/10 and ‘Autocar’ also gave a score of 4/5.

Photography by Tom Waller for Oodo Optical

When a car is required predominantly for business miles, the main criteria becomes fuel efficiency.  A larger car is not only more tedious to park, but also exerts a greater fuel demand.  If you’re self-employed, the one car has to accommodate family needs also.  As mentioned previously, it’s the little things like space for a pushchair that requires consideration too.

It goes without saying that one’s choice depends on desirability and budget.  Therefore, a smaller car will reduce car-costs and a larger vehicle will increase it.  Nonetheless, it is worth using table 1 to draw up comparisons between various vehicles and expenses, before the actual purchase.  Car insurance, Tax and servicing charges are often running costs that get overlooked.

BMW 1 Series (2020). Image Credit: Net Car Show

Mercedes A-Class (2017). Image Credit: Net Car Show

Mercedes A-Class (2018). Image Credit: Net Car Show

Final thought

The Mercedes A-class has had a recent body change (new shape from 2018). This means that the previous spec will be cheaper and bargains are ready to be picked up. I am personally very excited about the New Volkswagen, Golf MkV111. The new model is due to be on the roads by March 2020, with the Volkswagen ID.3-electric, hot on its tails to be on the market by summer 2020⁹. I refuse to pay £30k+ for a new mid-spec Golf but I know from March, 2020 that the old shape (MkV11) will be available to purchase at bargain prices.

Volkswagen Golf Mk8 (2020). Image Credit: Volkswagen Cars

Volkswagen ID 3 (2020). Image Credit: Electrek

References

1. City of London 
2. The CCC
3. Cars.com
4. Parkers
5. Diesel Information Hub
6. Buy a Car
7. Car Buyer
8. Which?
9. Top Gear Issue 326

Blog Revised January 2020