which one better? company car or car allowance?

Answer 1

Depends what car you want/are offered and what the allowance will be.

If you want something which will be expensive to buy and high on running costs, such as insurance and servicing, you may be better off with a company car because then you will only have the tax on the benefit in kind to pay each month.

If you receive an allowance, your employer will possibly have an expectation of the level of car you would expect to own as you will be representing their business and they won't want you rolling up in some beaten up old wreck, which might be tempting and pocket you some extra cash each month.

An allowance might give you a greater choice of car and you might be able to get some really good deals on PCPs, but you will also have to pay for insuring and servicing the car. You may also be faced with having unexpected costs if something goes wrong, which would be covered by the company if it were their car.

Also check out if you're bound to stick with your choice or cash or car for a determined period - probably for as long as you would be expected to keep a company car. Think what happens if you chose one option, only to find out it was the wrong one but not being able to change it for a couple of years?

Answer 2

Company car is better. As one answer stated you have to report income for the personal use but the tax on that amount is less than the cost of buying and operating a car.
If you take the car allowane you end up is worse shape tax wsie. This is because the car allowance is included in income on your W-2 and you have to itemize deductions to be able to write off the expenses. Most people don't itemize and of those that do most don't get a write-off on car expenses because they are treated as miscelleanous deductions and have to exceed 2% of your adjustted gross income before you get a tax benefit..
If you really want to buy a car then have your employer adopt a reportable car expense plan. You tell them how much you spent on the car each month, they give you a check and it is not in you W-2 income and it is not an itemized deduction on your tax return.

Answer 3

For me, the deal breaker would be if they gave me a car that was unattractive or totally plastered with the company's logo and contact information. A banner in the back window is tolerable or a small stick-on advertisement on the side, but not totally painted. I really LOVE cars so this would be a tough decision for me. The good thing about having the company car is that there should be no expense but gasoline...no regular maintenance costs, no car payment, etc.

Answer 4

Company car. I worked as a claims adjuster and experienced both.
Companies who give car allowances never allow enough to cover expenses. They can figure it all out in advance.
If you have to buy your own liability insurance and the ins. company knows you will be using the car for business, you are going to get charged top dollar for the coverage.

Answer 5

depends what car you want
you will probably have your tax allowance, so if you have a god car that is relabel you will be quids in with the spare money from your allowance, or you can have a great car that will be services via the company when needed and you will probably get a new one every 3 years.

Answer 6

Car allowance.

Answer 7

Car allowance. No questions. You'll get taxed through your nose on a company car...

At least that's what its like at my work.

Answer 8

The biggest benefit of a company car is that in case of mechanical problems, you need to call someone, and it gets fixed, or you get a new set of wheels.

However, as one user said, if you get a dumpy car - you`d be better of sticking to your own.

I chose the company car, and got an unmarked VW Polo.
Quite neat ;)

Answer 9

Car allowance. You get clobbered on tax for car. You only pay 25% (or 40% if you earn that much) on car allowance

Answer 10

Company car. Their car, your company gas card, their maintenance plus your mileage reimbursement of using your car if their car ever needs maintenance.