Repair my van or get rid of it?

[HandyRocker]

I have a dilema. I bought a new(ish) van a couple of years ago. Thought I would spend some money and get something fairly new and reliable and service it regularly, have some peace of mind. Nope! Its actually 7 seater a car, but I've boarded out the back so I don't have to run 2 vehicles. I'm a sole trader and I claim the actual costs rather than mileage, which has probably saved my current bad situation from being even worse. Since I work average 6 days/week I claim 80% of the running costs of the car for business, plus 80% of the capital allowance at special rate 6%.

I paid total of £14k including interest for it in 2023. Last year the timing belt failed, it cost me £3,300 to repair. It's running fine now, but guzzling oil, garage says piston rings are failing, that'll be another +/- £2500. It has a Puretech wet belt engine, which I discovered (at great cost) is notorious for the wet belt failing and piston rings wearing prematurely, I've now suffered both, despite keeping it properly serviced. I'm unsure what to do now..

If I sell it, I will get a fraction of what I paid for it and I'll have to buy something older and cheaper, which means the capital allowance will be next to nothing.
If I repair it, I'll have spent almost £6k on repairs, almost the current value of the car. Fortunately I can mitigate that somewhat, being able to claim 80% of the bill, and then have pretty much a completely new engine. Either way, many long days and aching limbs entirely for nothing. Better off to repair, or cut my losses?

 

[MyAccountantOnline]

I have a dilema. I bought a new(ish) van a couple of years ago. Thought I would spend some money and get something fairly new and reliable and service it regularly, have some peace of mind. Nope! Its actually 7 seater a car, but I've boarded out the back so I don't have to run 2 vehicles. I'm a sole trader and I claim the actual costs rather than mileage, which has probably saved my current bad situation from being even worse. Since I work average 6 days/week I claim 80% of the running costs of the car for business, plus 80% of the capital allowance at special rate 6%.

I paid total of £14k including interest for it in 2023. Last year the timing belt failed, it cost me £3,300 to repair. It's running fine now, but guzzling oil, garage says piston rings are failing, that'll be another +/- £2500. It has a Puretech wet belt engine, which I discovered (at great cost) is notorious for the wet belt failing and piston rings wearing prematurely, I've now suffered both, despite keeping it properly serviced. I'm unsure what to do now..

If I sell it, I will get a fraction of what I paid for it and I'll have to buy something older and cheaper, which means the capital allowance will be next to nothing.
If I repair it, I'll have spent almost £6k on repairs, almost the current value of the car. Fortunately I can mitigate that somewhat, being able to claim 80% of the bill, and then have pretty much a completely new engine. Either way, many long days and aching limbs entirely for nothing. Better off to repair, or cut my losses?

A very difficult question to answer. I think with £6k repairs needed I'd be considering cutting my losses. If you get it repaired what warranty will you have on the repaired engine?

Don't base any decision solely on tax.

Have you looked at leasing as an alternative?

 

[FreddyG]

There is so much you have failed to tell us, so giving you a meaningful answer is well-nigh impossible. £6k in repairs sounds as if you went to the dealership - if that really is the case, then you only have yourself to blame. (They put the defibrillator in the service department for a very good reason!)

A great deal of nonsense is written about wet-belt engines - there are good ones and bad ones, though most are to be avoided, simply because they often come from poor manufacturers who often cut corners.

You have not told us ANYTHING about the car - make, model, engine size, age or even what service schedule you adhered to. Certainly, wet-belt models should have their timing belts changed every 60,000 miles or sooner, and the cheaper ones from French and Italian makers every 50,000 miles. The higher service costs mean that they are often avoided by fleet managers who know what they are doing!

Ask your fellow sole traders who they go to for servicing. What you should be looking for is a "Stig-With-a-Spanner". A real expert running his own workshop and charging sensible prices. If nothing is forthcoming that looks good and honest, try a local independent garage/workshop. We go to a Stig-with-a-Spanner for nearly everything, but for more complicated stuff (aircon, engine remapping, that kind of thing) we go to an indi shop.

(And our vehicles have regular belts/chains!)

 

[HandyRocker]

Its a Vauxhall Combo Life XL, but I did say its the 1.2 Puretech engine. This is what Stelantis put in a lot of their Vauxhall, Peugeot and Citroën cars. There is currently an enormous class action law suit going on in France, some 8000+ claimants and another now started in Spain over this engine for exactly these symptoms. They have upgraded the spec of the belt twice and revised the maintenance recommendations to use different spec oil and change the belt 40,000 miles sooner.
None of this make much difference to me tho, its now 6 years old and yes I had it serviced and repaired at a garage i have been going to since the 90s.
Stelantis have created a portal now for people who bought cars with these engines, where you can upload the details, service history and repair bills where they will consider compensation. However it is so strict. If you miss a service interval or exceed the mileage even by a small margin, it'll be rejected.
Just type "Puretech" into YouTube and find an endless list of videos of mechanics seeing failures on fairly new, low mileage cars and mechanics and dealers telling you to avoid them like the plague. All too late for me I'm afraid.

It will have cost me £5,800 total if I fix the piston rings. I've already paid £3,300 to repair the top end. Its another £2,500 I'm looking at for the pistons.

 

[HandyRocker]

Ah apologies, I didn't say which enginenit was. I did try to post a link, but it was disallowed.

 

[WaveJumper]

With out going on for ever on this topic (I seem to have done nothing but read up on the topic of engines this year) I would say cut your losses and move on. If the wet belt had failed the crap thats going to be in the oil ways in your engine would have been a massive issues and unless completely striped down and cleaned up other issues will follow, which by the sound of it thats whats happened.

 

[HandyRocker]

Ha you and me both! Well, this particular godawful engine anyway.
I know my mechanic personally and whilst the tests didn't show any signs of piston wear, actually most likely stuck oil rings, he did clean out the oil ways very thoroughly, including to the brake servo which can also get clogged and leave you with no brake servo! New sump, new pickup strainer, which had actually got partially sucked up into the tube.

New rings would mean I practically got a new engine, but I think you're right anyway, maybe time to cut my losses. Will be around £12k - £13k I reckon. Is there any way to account for that loss as far as tax is concerned? I fear not, so I'll have spent a big chunk of this year working like a horse for 0.00

There is a guy in Milton Keynes who spends every day changing piston rings on these engines, but only the non-turbo ones. Good for him for spotting that market, cos hes really busy and making a lot of people happy! For the turbo version tho, the engine has to come out completely, that's why it'll cost so much more.

Thanks for your input, appreciated.

 

[DontAsk]

Sounds a bit like the problems with Ford EcoBoom engines, as they are sometimes known.

 

[HandyRocker]

Yes, both wet belt. The puretech it seems, just has more problems than just the belt. And dammit I had to go and buy one of those!

Shame, as a utility, its ideal. If only it didn't steal all my wages!

 

[JEREMY HAWKE]

This is the reality of running a modern vehicle.
A considerable amount of my time is dedicated to getting problems fixed that we never had before!
I can go into great detail on problems and what makes and models have specific problems but in my view it would be best to repair your existing vehicle as you will probably end up with another POS that will furnish you with all these problems again.

Did you know?
20 years ago I would have got 400K out of an engine Now they do t last 120K

 

[HandyRocker]

This is the reality of running a modern vehicle.
A considerable amount of my time is dedicated to getting problems fixed that we never had before!
I can go into great detail on problems and what makes and models have specific problems but in my view it would be best to repair your existing vehicle as you will probably end up with another POS that will furnish you with all these problems again.

Did you know?
20 years ago I would have got 400K out of an engine Now they do t last 120K

Cheers, I'm minded to either do that and "over service" it, or lob it and get something older. My brother has a 52 plate version of the same car and its still running perfectly at 145k.
I can totally believe your 400k car. I did too! Had old Peugeot 405 estate. My brother called it the Enterprise! Only scrapped it because the clutch went, it was still running.

 

[WaveJumper]

Agree with the above they dont make them like the used too. Without going off topic too much I started "looking" into the Porsche engine at the beginning of this year after, during a service the engine may have needed to be removed to replace the plugs.

Long story short a car brand that I held in high esteem for years (and was my pride and joy) left me wanting, suddenly a whole load of "possible" future issues could arise on a car that had only done 40k. I found myself questioning how on earth they could build an engine which had so many issues.

I follow the car scene to a point and know there are major issues with Audi, BMW, Mini and Ford. The list could be longer. Ford I have a family member working for them and when asked who thought it was a good idea to run a rubber belt in oil I was told Ford designers thought it was the best thing since sliced bread ......... really

My immediate neighbour works for Ford (at a very high level) I have never seen him look so stressed out to the point he's taking early retirement next year.

Back to me - ok my dream of Porsche ownership came to and end at the begging of this year as was so disillusioned with the brand. My eyes turned to R8's big issues, Lambo lucky if you get to 30k without an issue, dont get me on they are like kit cars made up from VW to Ford parts. Even the Ferrari don't come out to well.

Long story short for now my days of soft top motoring have come to an end, possible plan to go back to "vintage" motoring and something with a simple V8 and no bloody fancy electronics an d fancy cams.

Back on OP's topic this has been a big topic in the household this year, and it appears from conversations with my youngest who has been talking to the owners of companies he deals with they all (without exception) now lease vehicles be it van or car due to unreliability.

I know all can't do this but I would never buy out right for company use it would be lease and for the shortest possible time. Sorry doesn't really help OP but if there's a chance of bits of rubber logged some where in a channel ie main bearings you gonna overheat those pistons and be back to square one.

 

[DontAsk]

I follow the car scene to a point and know there are major issues with Audi, BMW, Mini and Ford. The list could be longer. Ford I have a family member working for them and when asked who thought it was a good idea to run a rubber belt in oil I was told Ford designers thought it was the best thing since sliced bread ......... really

My immediate neighbour works for Ford (at a very high level) I have never seen him look so stressed out to the point he's taking early retirement next year.

It's not just the wet belt. Ecoboost prior to around 2019 have too narrow cooling channels in the cylinder head. They get blocked. I think that's the correct description of the issue. The first symptom is a misfire in one cylinder due to the overheating. I had the plugs and coil packs replaced which seemed to fix it. I then noticed it was losing coolant (into the cylinder, presumably) and did some research. A new engine was potentially on the cards so it was traded in.

 

[HandyRocker]

Just been doing some reading up. HMRC says you can claim a balancing allowance for loss of value, but the info describes a van/lorry that's been written off and paid out by insurance. The difference between the original cost, minus capital allowances to date and the final sum received for the vehicle is the balancing allowance (tax loss).

However, this is a car that I use as a van and whilst the capital allowances are fine, I dont know if this balancing allowance applies, does it?

Just trying to find out if I can mitigate this loss as best as possible. Sods law I meet all but 1 criteria for compensation from Stellantis, that being it was diagnosed by RAC and repaired by my local garage rather than all being done at a main dealer.

 

[HandyRocker]

Otherwise just suck it up and expect to have to pay for a new engine every few years as a new normal ongoing business expense.

 

[WaveJumper]

It's not just the wet belt. Ecoboost prior to around 2019 have too narrow cooling channels in the cylinder head. They get blocked. I think that's the correct description of the issue. The first symptom is a misfire in one cylinder due to the overheating. I had the plugs and coil packs replaced which seemed to fix it. I then noticed it was losing coolant (into the cylinder, presumably) and did some research. A new engine was potentially on the cards so it was traded in.

Yep coolant into the cylinders appears to be very common and anyone who wants to see how big a problem, you just have to go to Youtube. And if you want to see some real stinkers check out REPerformane UK that guy knows what he's talking about

 

[GLAbusiness]

I know all can't do this but I would never buy out right for company use it would be lease and for the shortest possible time. Sorry doesn't really help OP but if there's a chance of bits of rubber logged some where in a channel ie main bearings you gonna overheat those pistons and be back to square one.

I have just replaced my car. My accountant did all the sums for various options. I followed his advice and took out a 3-year business lease on the new one.

Disclaimer: this was for my particular circumstances. Best to consult your own accountant

 

[DWS]

Just been doing some reading up. HMRC says you can claim a balancing allowance for loss of value, but the info describes a van/lorry that's been written off and paid out by insurance. The difference between the original cost, minus capital allowances to date and the final sum received for the vehicle is the balancing allowance (tax loss).

However, this is a car that I use as a van and whilst the capital allowances are fine, I dont know if this balancing allowance applies, does it?

Just trying to find out if I can mitigate this loss as best as possible. Sods law I meet all but 1 criteria for compensation from Stellantis, that being it was diagnosed by RAC and repaired by my local garage rather than all being done at a main dealer.

Have you actually claimed for the car on your tax return under Capital Allowances? because of the private use then it should be in the single asset pool and you would have claimed Written Down Allowances (WDA)
If so there should be no problem with claiming any balancing allowances on disposal

 

[MyAccountantOnline]

....HMRC says you can claim a balancing allowance for loss of value, ...

However, this is a car that I use as a van and whilst the capital allowances are fine, I dont know if this balancing allowance applies, does it?

...

It can apply.

What capital allowances have you claimed so far on the car?

 

[MyAccountantOnline]

To add to the above - a balancing allowance wont apply if you are a sole trader using the cash basis

 

[HandyRocker]

Ah ok thanks, yes I'm a sole trader using cash basis, so that doesn't work for me then.
I have only made one claim so far, for 23-24 tax year. I was claiming 70% of the car's expenses for business use, which was perhaps a bit too conservative, I'm doing 80% this year. I'm actually working 7 days/week right now to get back to where I was before it took me to the cleaners.

So the car cost £14k, so I calculated 14000 x 0.06 (£840). Then I calculated 840 x 0.7 since it was 70% business use, and and that gave me £588 to claim as single asset pool.

 

[JEREMY HAWKE]

Ah ok thanks, yes I'm a sole trader using cash basis, so that doesn't work for me then.
I have only made one claim so far, for 23-24 tax year. I was claiming 70% of the car's expenses for business use, which was perhaps a bit too conservative, I'm doing 80% this year. I'm actually working 7 days/week right now to get back to where I was before it took me to the cleaners.

So the car cost £14k, so I calculated 14000 x 0.06 (£840). Then I calculated 840 x 0.7 since it was 70% business use, and and that gave me £588 to claim as single asset pool.

This is one of the reasons why I have never liked mixing the two Modern repair bills are very frightening and if a vehicle is heavily used for business then all those expenses need to be put through
Some business ,some personal will soon see you out of pocket

That's why my personal car is a vehicle that can not be confused with business and I dont use business vehicles for person use
Who wants to turn up in a Transit van anyway!

 

[MyAccountantOnline]

Ah ok thanks, yes I'm a sole trader using cash basis, so that doesn't work for me then.
I have only made one claim so far, for 23-24 tax year. I was claiming 70% of the car's expenses for business use, which was perhaps a bit too conservative, I'm doing 80% this year. I'm actually working 7 days/week right now to get back to where I was before it took me to the cleaners.

So the car cost £14k, so I calculated 14000 x 0.06 (£840). Then I calculated 840 x 0.7 since it was 70% business use, and and that gave me £588 to claim as single asset pool.

As you claimed capital allowances on the car you will have a balancing allowance or charge when you sell/dispose of the car. It'll be the difference between the written down value (ie cost less allowances claimed) and the sale value.

 

[HandyRocker]

Thanks so much! Wow, so that'll be quite a big figure then. I expect to get around £5k for it as it is. So I calculate £14k, minus £5k, minus the £588 that I already claimed?
Final figure is £8,412, so I then do x0.8 of that because its 80%business use? Leaves £6729

 

[DWS]

As you claimed capital allowances on the car you will have a balancing allowance or charge when you sell/dispose of the car. It'll be the difference between the written down value (ie cost less allowances claimed) and the sale value.

But the OP said they use the Cash Basis which would mean that Capital Allowances would have been claimed incorrectly on the tax return and so no balancing charges.

 

[HandyRocker]

From what I researched at the time, is said that cars are allowable when using cash basis, but not if you're using simplified expenses. Since I'm recording the actual expenses, it should be allowable? I really do hope I got that right anyway!
For the mileage that I do, I would actually have been better off claiming simplified expenses if I'd known I could do that.
However, now that I'm now clobbered with such a whopping repair bill and a big loss in value to go with it, and as long as I can indeed claim it, then hopefully this does at least mitigate it somewhat.

 

[MyAccountantOnline]

But the OP said they use the Cash Basis which would mean that Capital Allowances would have been claimed incorrectly on the tax return and so no balancing charges.

But it was a car and 2023-24.

 

[HandyRocker]

Sorry, yes even tho I did explain it's actually a very big car in the op, i probably should have said that in the title.
So if I sell it now, I can claim the loss for 24-25?

 

[DWS]

But it was a car and 2023-24.

Yes apologies, I keep seeing the title and ‘van’

 

[DWS]

Sorry, yes even tho I did explain it's actually a very big car in the op, i probably should have said that in the title.
So if I sell it now, I can claim the loss for 24-25?

If you sell it now the disposal will be in the 2025/2026 tax year

 

[HandyRocker]

Duh of course! Whilst I'd rather not have to lose the car, it's quite a relief to know at least I can do that. Thank you so much, I really appreciate this.

 

[MyAccountantOnline]

Sorry, yes even tho I did explain it's actually a very big car in the op, i probably should have said that in the title.
So if I sell it now, I can claim the loss for 24-25?

We're in 25-26 now so the loss will be for 25-26 but you may be able to carry some loss relief back to 24-25.

 

[HandyRocker]

I'm guessing I just do the capital allowance as normal for 24-25, then calculate the loss for 25-26? Of now course minus what I've already claimed 23-24 and 24-25?

 

[MyAccountantOnline]

I'm guessing I just do the capital allowance as normal for 24-25, then calculate the loss for 25-26? Of now course minus what I've already claimed 23-24 and 24-25?

Yes - when you sell the car you calculate a balancing charge or allowance (its a balancing charge if its a profit and allowance if its a loss).

The balancing allowance/charge is the tax written down value (ie original cost price less allowances claimed) minus the sale proceeds.

You dont adjust any earlier years capital allowances.

 

[HandyRocker]

Thank you!

 

[Byzantium]

If you do under 20k miles a year, buy a new Nissan van and get 100k or 5 years warranty.

It is the safest thing you can do, trust me, after years of going from one make to another but be prepared to chop it at say 3 years and get good value with 2 years warranty remaining or take a punt at 5 years or a bigger risk after 5 years.

 

[adam thompson1981]

Generally speaking running and repairing an older car or van will always be a better financial move than buying a new one, even more so if you are getting it on finance

For example my mate bought a brand new van in 2022 24k plus vat so 29k cost as hes not vat reg, plus the finance insterest. 3 years later the van is valued at 12k

so 17k hes lost in 3 years plus the finance interest and it will only deprecate more.

meanwhile my van was 3k. i could change the engine 5 times and still would be better off. In fact ive had it 3 years and its had a starter motor and some brake pads lol

Youve been really unlucky with your car (partly due to the awfull wet belt engine) ive drove older cars all my life, probably had more than 20 of them and the biggest expense ive ever had was a new clutch

 

[HandyRocker]

Generally speaking running and repairing an older car or van will always be a better financial move than buying a new one, even more so if you are getting it on finance

Ironically that's what I have always done until now. For years I would always buy a 10 year old Mondeo Estate and fix it if it was worth it, or scrap it and get another one. Most often, I could service & fix it myself. In 10 years I think I spent less on those than I did just for the damn repairs on this thing!

 

[robertsnuffle5]

Dont spend that much on a repair. Just get rid and take it as a learning experience. Look at streamline car finance, i got a 3 year old Audi A3 and it works an absolute treat, no issues at all.

 

[MikeJ]

I'm going to guess that he's not waited four months before deciding what to do...