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Company cars

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  • 16-10-2006 2:06am
    #1
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 51,687 Mod ✭✭✭✭


    Hi

    I've just been offered a new job which includes a company car or an allowance.

    Now at the moment I have a fairly old car and my insurance/tax is about €110 a month and petrol bills are very low as I only use it for local driving at the weekends as I take public transport into work.

    With my new job I will have to drive as there is no public transport and whilst I don't yet know if the car allowance will mean that there are rules in terms of what type of car in terms of age/make etc we should drive, I do know that if I am working offsite in my new job or travelling for any work purpose I will not be able to use my own car for some insurance reason.

    I've done up what my earnings/costs would be in both scenarios, and from what I am working out, and making the assumption that I would need a newer car and have higher repayments and higher petrol/insurance costs due to travel for work, it appears to me that I would be better off taking the car rather than the allowance (with the car, we also get fuel cards).

    I know it means that if I left the job I have no car, but that's not a huge issue for me.

    Has anyone else got a company car, and if so have they found it financially more viable than taking an allowance? I have worked out the figures based on BIK on band one (less than 15k business miles per year).

    thanks
    theresa


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    #2
    Sandwich
    Closed Accounts Posts: 1,253 ✭✭✭Sandwich


    In a similar situation and have the company car at the moment but thinking of changing.

    It depends what you want but basically the two extreme options are :

    If you are not really concerned about cars or having the latest model, then go for the allowance. You will save money by buying second hand and owning it yourself.

    or

    if you are someone who would be paying finance on a new car and changing it every few years anyway, then go for the company car, it will save you a bit, and also you carry no risk on insurance rises or repairs.

    In general the tax man tries to make sure that you cannot gain by having a company car - so he assumes you will have a new car and change it every 3 years, and taxes BIK you accordingly. You will pay tax on an allowance also, but are free to save yourself some cash if you are happy having a cheaper/older car. Its up to you.


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