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Company Car vs Car Allowance

  • 06-07-2006 7:44am
    #1
    trotter_inc
    Registered Users, Registered Users 2 Posts: 2,492 ✭✭✭


    Hey guys,

    I currently have a company car and am paying approx €300 benefit in kind on it per month.

    My employer said that they are going to look into getting rid of the company car and pay me an allowance on my own car instead. This would involve me buying my own car and having my employer pay me an allowance for using it for company use.

    Has anyone any experience in this way? Would it work out better for me to stick with the company car? Would my insurance costs increase because I would be using it for 8 hours + a day? My employer has given me the choice, I can stick with the company car if I like.

    Any opinions or own experiences welcome.

    Thanks!


Comments

  • #2
    imalegend
    Closed Accounts Posts: 269 ✭✭imalegend


    it depends on wheter you are getting a fuel allowance also. You will recieve a lump some payment which you are heavly taxed on if you are to buy your own car. In my experience if you have a company car and have the company paying the insurance too i would stick with it and if you have a fuel charge card too even better.The main reason people take an allowance instead of a car is so they can actually choice exactly the car they want to drive even though it costs them more in the long run.


  • #3
    trotter_inc
    Registered Users, Registered Users 2 Posts: 2,492 ✭✭✭trotter_inc


    imalegend wrote:
    it depends on wheter you are getting a fuel allowance also. You will recieve a lump some payment which you are heavly taxed on if you are to buy your own car. In my experience if you have a company car and have the company paying the insurance too i would stick with it and if you have a fuel charge card too even better.The main reason people take an allowance instead of a car is so they can actually choice exactly the car they want to drive even though it costs them more in the long run.

    afaik my employer will be paying the fuel costs, he still has to get back to me with an allowance offer, just thought Id check out other peoples situations...

    thanks for the reply...

    in most cases what would the employer pay for? insurance? petrol? wear and tear? etc...


  • #4
    imalegend
    Closed Accounts Posts: 269 ✭✭imalegend


    not 100 per cent on this part of it but i think you get an allowance and you have to insure it yourself as it is a private car but the employer can still pay the fuel charges as a benefit in kind which you can lay off against the figure of the car...its a complictaed area and it really boils down to do you want an exact car...if your not to bothered about the make and model then i believe for value for money take what your given as it works out better for you in the long run even with the changes that have been made in company law in regards to benefit in kind...i.e.tax has gone up on it...another point is you dont lose money on the car the company do but if you buy your own you take the hit on it de-valuing.


  • #5
    trotter_inc
    Registered Users, Registered Users 2 Posts: 2,492 ✭✭✭trotter_inc


    imalegend wrote:
    not 100 per cent on this part of it but i think you get an allowance and you have to insure it yourself as it is a private car but the employer can still pay the fuel charges as a benefit in kind which you can lay off against the figure of the car...its a complictaed area and it really boils down to do you want an exact car...if your not to bothered about the make and model then i believe for value for money take what your given as it works out better for you in the long run even with the changes that have been made in company law in regards to benefit in kind...i.e.tax has gone up on it...another point is you dont lose money on the car the company do but if you buy your own you take the hit on it de-valuing.

    cheers for that...


  • #6
    MrPudding
    Registered Users, Registered Users 2 Posts: 9,788 ✭✭✭MrPudding


    I got an allowance in a company I used to work for. The way it worked was the allowance was for a fixed amount, €620 ish per month. Each month I had to submit a mileage claim at the agreed rate, the mileage had to be such that the claim was around the 620 mark. I then received a payment for 620.

    This was very good as I got the same money regardless of the mileage I did and I never ever did all the miles claimed for. The allowance was also tax free as it is simply the company returning out of pocket expenses.

    it sounds a bit dodgy but apparently quite a few companies do this, one of my friends called the revenue to see what they thought but they didn't care.

    MrP


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