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Company Car vs Monthly Car Allowance
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 2010-03-14 7:25 PM |
Master  1790     Tyler, TX |  Subject: Company Car vs Monthly Car AllowanceWhich do you prefer? I may have to make the decision soon. The options might be: 1) Monthly allowance for use of business use of personal vehicle. I'd have to buy a new car. The allownce would be taxable, but the amount would still likely cover all expenses, including bank payment. 2) Company car, but I'd have to keep track of business vs personal mileage and pay a certain amount for personal use. I don't know how they'd calculate personal use charges. What are your experiences? Which to you prefer? Brian |
| 2010-03-14 7:34 PM in reply to: #2725867 |
Pro 4909 Hailey, ID | Subject: RE: Company Car vs Monthly Car Allowance They make you buy a new car? Do you have other options? If you get a flat amount, I'd buy a cheap car (chevy aveo?) and take the payment. Or buy used. |
| 2010-03-14 8:09 PM in reply to: #2725867 |
Expert 632 Cornfields of Illinois | Subject: RE: Company Car vs Monthly Car Allowance famelec - 2010-03-14 7:25 PM Which do you prefer? I may have to make the decision soon. The options might be: 1) Monthly allowance for use of business use of personal vehicle. I'd have to buy a new car. The allownce would be taxable, but the amount would still likely cover all expenses, including bank payment. 2) Company car, but I'd have to keep track of business vs personal mileage and pay a certain amount for personal use. I don't know how they'd calculate personal use charges. What are your experiences? Which to you prefer? Brian Depends on if you need (or want) a newer car. I previously went this route and was forced to upgrade to a newer model in order to to the monthly allowance. The job didn't work out after about a year and I was stuck with a higher car payment than I would have desired and had wished i had gone the company car route where i could have just turned the car back in and went back to my older car that i had traded in. |
| 2010-03-14 8:15 PM in reply to: #2725881 |
Master 1790 Tyler, TX | Subject: RE: Company Car vs Monthly Car Allowance bradword - 2010-03-14 7:34 PM They make you buy a new car? Do you have other options? If you get a flat amount, I'd buy a cheap car (chevy aveo?) and take the payment. Or buy used. For the position the car would have to be fairly nice. My current car wouldn't qualify. I'd have to buy a new or slightly used car... Brian |
| 2010-03-14 8:17 PM in reply to: #2725881 |
Extreme Veteran 591 New Port Richey, FL | Subject: RE: Company Car vs Monthly Car Allowance bradword - 2010-03-14 8:34 PM They make you buy a new car? Do you have other options? If you get a flat amount, I'd buy a cheap car (chevy aveo?) and take the payment use the money to buy a new bike or three. Or buy used. |
| 2010-03-14 8:33 PM in reply to: #2725867 |
Pro 4909 Hailey, ID | Subject: RE: Company Car vs Monthly Car Allowance How stable is the job? It would suck to get into debt and have them "restructure" and you be stuck with a hefty car payment. If you do buy your own, get a used car. Even slightly used nice cars will save you tons of $$$ from new. And if you're saving 10k off what you pay for new, any lack of warranty or less time in warranty is well worth the 10k savings. |
| 2010-03-14 9:44 PM in reply to: #2725867 |
Veteran 204 | Subject: RE: Company Car vs Monthly Car Allowance Company car...they pay everything...never any surprises. For instance, that monthly allowance might pay your insurance, but if you crash it or otherwise have a claim, they won't chip in to help with your deductible. (I knew a girl who crashed, got her car fixed, and crashed again within a week of getting her repaired car back.) If your insurance goes up next year, there is no guarantee there will be a similar increase in your allowance. Same thing if gas goes up to $4 a gallon again. Etc, etc... Of course, find out the details of how/how much they will charge you for personal use of a company car...but it is hard to beat a company car, even when you have to put something towards it. |
| 2010-03-14 11:53 PM in reply to: #2725867 |
Master 1547 | Subject: RE: Company Car vs Monthly Car Allowance I 2nd the company car. I once got two flats at once. Called the fleet car # and had a wrecker in 30minutes, towed me directly to the dealer where I got brand new tires. Entire incident was over in about 2hrs and I had about $400 worth of new tires. Also with mine gas/oil changes are paid for so its a no brainer. Getting an allowance of say $600 may sound decent, but really it doesn't equal the value of the company car. Downside is you buy the car they want, not the one you want. For me it is a Sub outback which works just fine for me, and I get to pick a brand new one about every 50K miles. Regarding personal mileage usage...its a wash. The IRS allows 55 cents per mile so you make up for it there. The personal amount you pay is just for taxes. The way I expense mine is say 1200 miles/mo business and 300 personal...ends up costing me about $40-$60 a month out of paycheck. But like I said, you get the full mileage deduction at tax time so it makes up for it. Edited by sax 2010-03-14 11:53 PM |
| 2010-03-15 12:01 AM in reply to: #2725867 |
Extreme Veteran 667 Melbourne | Subject: RE: Company Car vs Monthly Car Allowance Having been in charge of a company fleet in the past, they generally have better buying power and will get a better deal. Thing to think of though is I've seen companies expect the car to be returned when you finish the job, no uncertain terms. Some former employees had the company car as their only family car, then resigned and found themselves without a means of transport in a very short while. Check what happens if you leave the organisation or no longer need the car in the future, what time frame do you get to use it for. |
| 2010-03-15 8:16 AM in reply to: #2725867 |
Extreme Veteran 446 Barrington, IL | Subject: RE: Company Car vs Monthly Car Allowance Well if it is a true company car they would take it off your hands if you leave the job. I would take the allowance, that way if you leave you still have a car that they helped pay for, with the company car if you leave you are stuck without a car. |
| 2010-03-15 8:41 AM in reply to: #2725867 |
Pro 6767 the Alabama part of Pennsylvania | Subject: RE: Company Car vs Monthly Car Allowance Do you already own a car outright? I'm not sure why (unless the insurance for the second car breaks the bank) it is an either/or situation. If you are still making payments on the current car, then I would also think about the company car. mrs gearboy travels a lot for her job using her own car and getting mileage reimbursed - which is now worth nothing, since even though it is only about 8 years old, has around 250k miles on it, the AC hasn't worked in 3 years (because she keeps saying it will not last the summer and the $2k repair it would need isn't worth it. If it was a company car, it would have been repaired or replaced by this point. Of course, if you keep your old car, you can continue to beat it into the ground for personal use, while having a "nice car" when the occasion called for it. No more funky smells from workout clothes that got stuck in the back for a day that the temperatures were in the 90's. |
 2010-03-15 9:29 AM in reply to: #2725867 |
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| 2010-03-15 9:56 AM in reply to: #2726149 |
| Member 169 | Subject: RE: Company Car vs Monthly Car Allowance sax - 2010-03-14 11:53 PM I 2nd the company car. I once got two flats at once. Called the fleet car # and had a wrecker in 30minutes, towed me directly to the dealer where I got brand new tires. Entire incident was over in about 2hrs and I had about $400 worth of new tires. Also with mine gas/oil changes are paid for so its a no brainer. Getting an allowance of say $600 may sound decent, but really it doesn't equal the value of the company car. Downside is you buy the car they want, not the one you want. For me it is a Sub outback which works just fine for me, and I get to pick a brand new one about every 50K miles. Regarding personal mileage usage...its a wash. The IRS allows 55 cents per mile so you make up for it there. The personal amount you pay is just for taxes. The way I expense mine is say 1200 miles/mo business and 300 personal...ends up costing me about $40-$60 a month out of paycheck. But like I said, you get the full mileage deduction at tax time so it makes up for it. Another one for company vehicle. I've had both. Although it is nice to choose exactly what car you drive, it's even better knowing that everything will be paid for with a company vehicle. Have a flat tire? Just call the number. Need an oil change? Just take it in and give them the paper work. My company even allows for 1 car wash per week in the winter and every two weeks in the summer. For the personal mileage you will probably get taxed, but the tax is minimal. Plus, you can "estimate" your personal use. Our company policy is that it is fine for personal use as long as it's reported and you're not using it an excessive amount. For all our weekend trips we use the company vehicle instead of my wife's vehicle so we are not putting the miles on her's. |
| 2010-03-15 10:54 AM in reply to: #2725867 |
| Elite 3972 Reno | Subject: RE: Company Car vs Monthly Car Allowance company car = company in your personal business. Beware. |
| 2010-03-15 11:15 AM in reply to: #2725867 |
| Extreme Veteran 451 Stoughton, WI | Subject: RE: Company Car vs Monthly Car Allowance I assume this means you will be on the road a lot. SO, that means any car you buy is going to drop its value like a rock. Normal usage, a new car loses 70% of its value in the first 4 years. If you are in sales or something that does a lot of driving, you will lose value substantially faster than that. a LOT. Second, being forced to buy a NEW new car is unfair. Talk to the boss, see if a newer used car that can be completely paid by the allowance (including any difference in insurance between current car and new car) is acceptable. Most 2-3 year old cars have already had the majority of their depreciation. Obviously, you don't want one with high miles. If that isn't acceptable, take on the company car. Let them worry about losing money on the car, and all you do is have to do a little math for their bean counters. In the meantime, any money you would have put towards a car payment, you save up and buy yourself a car when the time comes-not for business use!. |
| 2010-03-15 11:36 AM in reply to: #2725867 |
| Elite 5316 Alturas, California | Subject: RE: Company Car vs Monthly Car Allowance The company car will likely be less $$ in the long run. So I would go with that and worry about my own car separate from my job or whatever. |
| 2010-03-15 8:07 PM in reply to: #2725867 |
| Expert 1233 | Subject: RE: Company Car vs Monthly Car Allowance The record keeping for the company car is a pain, and if it's a company car leased directly to you, it's even worse. Reimbursement for mileage (.54/mile currently) is not taxable income. With reimbursement, get a late model used car with good gas mileage, the less money you put into the vehicle the better for you. The mileage reimbursement is the same regardless of vehicle. |
| 2010-03-16 5:52 AM in reply to: #2726753 |
| Veteran 738 | Subject: RE: Company Car vs Monthly Car Allowance bootygirl - 2010-03-15 11:54 AM company car = company in your personal business. Beware. Care to elaborate? Among many pro company car postings, you throw in this gem. Please enlighten me. |
| 2010-03-16 9:29 AM in reply to: #2725867 |
| Extreme Veteran 567 Kingwood, TX | Subject: RE: Company Car vs Monthly Car Allowance famelec - 2010-03-14 7:25 PM Which do you prefer? I may have to make the decision soon. The options might be: 1) Monthly allowance for use of business use of personal vehicle. I'd have to buy a new car. The allownce would be taxable, but the amount would still likely cover all expenses, including bank payment. 2) Company car, but I'd have to keep track of business vs personal mileage and pay a certain amount for personal use. I don't know how they'd calculate personal use charges. What are your experiences? Which to you prefer? Brian Brian - I have done it both ways and would take the company car everyday of the week and twice on Sundays!!! Especially if you are going to put on high mileage. I average about 3-4k a month driving. That is a lot of oil changes and replacement tires - that the company pays for. And if you ever have major repairs needed they pay for that as well. In my old company car I needed a new transmission - that would have sucked to pay for out of pocket. Also, If the job goes away then you are not stuck with a car payment. Just some things to consider. |
| 2010-03-16 10:42 AM in reply to: #2725867 |
| Master 1547 | Subject: RE: Company Car vs Monthly Car Allowance Some have mentioned the benefit of having your own car if you decide to leave the company. I look at that the other way...if I lose my job I don't want a car (car payment), in between jobs is a great time for a Vespa or my road bike. Edited by sax 2010-03-16 10:43 AM |
| 2010-03-16 10:50 AM in reply to: #2728920 |
| Champion 4835 Eat Cheese or Die | Subject: RE: Company Car vs Monthly Car Allowance sax - 2010-03-16 10:42 AM Some have mentioned the benefit of having your own car if you decide to leave the company. I look at that the other way...if I lose my job I don't want a car (car payment), in between jobs is a great time for a Vespa or my road bike. That's my stance. I don't currently get either a company car or allowance because most of my travel is air. When I do use my car I just get reimbursed for mileage. That being said, the option for a company car/car allowance has been discussed and may be on the table later this year. My plan is to take the company car and keep my personal car and just garage it for the time being in case I did lose my job or change jobs. We own the car outright, it's got a lot of miles so it's worth is very little and the insurance is very low. We have no reason to get rid of it. But I'd rather go back to driving my old car then be stuck with a car payment on a car I bought for work which would most likely be a big gas guzzling truck or large SUV. |
| 2010-03-16 12:55 PM in reply to: #2725867 |
| Master 1289 Franklin, TN | Subject: RE: Company Car vs Monthly Car Allowance Love my company car! They let us order from 4 choices and I took a Charger. I have to log every mile I put on it between business and personal (driving to and from the office is considered personal, but I only live 4 miles from the office). I have to report mileage every month and annually. I am supplied a little book to log daily and it fits in the console. My company calculates a deduction from my paycheck based on my annual personal usage and that is spread out over 12 months. Throw in that it is a 2006 model and I've put 86k miles on it, company gas card, service/maintenance free; it is well worth it. I generally drive 2000 to 4000 miles a month on business. |
| 2010-03-17 1:58 PM in reply to: #2725867 |
Champion 7547 Albuquerque, New Mexico Bronze member | Subject: RE: Company Car vs Monthly Car Allowance Company Car Pro's: Little financial impact to you for repairs/maintenance. Probably also has insurance from the company. Company Car Con's: Tracking mileage (IRS insists that at least 20% of your miles will be "personal" and taxable income), restrictions on who can drive it (for some, only the employee can drive the company car, not even a spouse). Not as much choice. Car Allowance Pro's: Chance for allowance to exceed expenses. You'll have the car job or not. Your insurance, so anyone you want can drive it. Car Allowance Con's: Generally required to maintain a late-model car in a way suitable for your position (so you may have to trade/lease every 2-3 years). You're on the hook for major repairs. Lease/loan may extend past the allowance if you lose/quit your job. Check with your insurance agent about the ramifications of a car allowance. Most insurance policies are for "private use" and you may find you need a different (more expensive) policy for "business use." |
| 2010-03-17 2:10 PM in reply to: #2731789 |
| Champion 4835 Eat Cheese or Die | Subject: RE: Company Car vs Monthly Car Allowance McFuzz - 2010-03-17 1:58 PM Check with your insurance agent about the ramifications of a car allowance. Most insurance policies are for "private use" and you may find you need a different (more expensive) policy for "business use." What if you just don't tell your insurance company you get an allowance? How is driving for work (like an outside sales person) different then commuting to and from an office? |
| 2010-03-17 2:57 PM in reply to: #2731820 |
| Extreme Veteran 861 Northbridge, Massachusetts | Subject: RE: Company Car vs Monthly Car Allowance graceful_dave - 2010-03-17 12:10 PM McFuzz - 2010-03-17 1:58 PM Check with your insurance agent about the ramifications of a car allowance. Most insurance policies are for "private use" and you may find you need a different (more expensive) policy for "business use." What if you just don't tell your insurance company you get an allowance? How is driving for work (like an outside sales person) different then commuting to and from an office?I know my insurance is based on miles driven annually. Typically, if you are in an accident on company business, the company policy will act as primary (usually the higher limits as well) but they can reach down and attach your personal policy as well. I vote on the company car, mileage is a big killer on trade in and resale value and you are putting all that mileage on for someone else's benefit. I also like that maintenance is on the company dime. |
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