Company Car vs. Own Vehicle reimbursement for Emplyement

[arthur06]

Boy have I come to a crossroads with this decision.

I work for a company that provides you with a company car. I pay $150 per month for the vehicle and I can/do use it for personal use as well. They are now offering an alternative of we provide our own vehicle with reimbursement.

The options are:

#1. Stay with the current program. I pay $150 per month, have a fleet card, maintenance tickets, company provided insurance, license. Basically, I pay $150 per month for my car, nothing more ever.

#2. Provide my own vehicle. There are some stipulations that go with the vehicles that we are allowed to have. It has to be within 5 model years is the biggest one. They will pay me $329.63 per month for "fixed" vehicle payment. $107.64 per month for "maintenance and tires". And $299.59 per month for fuel. Total of $736.86 per month for reimbursement.

Background. Last month I drove 2090 business miles, and I have to submit and track those every month. So, If I drive more the "fuel" and "maintenance and tires" would go up/down depending on the number of miles I travel.

I have been told (but not really by an expert) that there is never a way that taking option #2 comes out to my benefit. Option #1 is always the best option. I know its not a deal to make money, but I want to make a wise choice.

they way I figure it is

Total of $736.86 total / 2090 business miles = 35.25 cents per mile
"fixed" of $329.63 / 2090 business miles = 15.77 cents per mile
"variable" of $407.23 / 2090 business miles = 19.48 cents per mile

Also, my company car is our families 3rd vehicle. We drive it for personal use anywhere from 200-400 miles per month.

 

[ilovemk76]

Boy have I come to a crossroads with this decision.

I work for a company that provides you with a company car. I pay $150 per month for the vehicle and I can/do use it for personal use as well. They are now offering an alternative of we provide our own vehicle with reimbursement.

The options are:

#1. Stay with the current program. I pay $150 per month, have a fleet card, maintenance tickets, company provided insurance, license. Basically, I pay $150 per month for my car, nothing more ever.

#2. Provide my own vehicle. There are some stipulations that go with the vehicles that we are allowed to have. It has to be within 5 model years is the biggest one. They will pay me $329.63 per month for "fixed" vehicle payment. $107.64 per month for "maintenance and tires". And $299.59 per month for fuel. Total of $736.86 per month for reimbursement.

Background. Last month I drove 2090 business miles, and I have to submit and track those every month. So, If I drive more the "fuel" and "maintenance and tires" would go up/down depending on the number of miles I travel.

I have been told (but not really by an expert) that there is never a way that taking option #2 comes out to my benefit. Option #1 is always the best option. I know its not a deal to make money, but I want to make a wise choice.

they way I figure it is

Total of $736.86 total / 2090 business miles = 35.25 cents per mile
"fixed" of $329.63 / 2090 business miles = 15.77 cents per mile
"variable" of $407.23 / 2090 business miles = 19.48 cents per mile

Also, my company car is our families 3rd vehicle. We drive it for personal use anywhere from 200-400 miles per month.

The IRS allows about 50 cents (check the 2012 number) per mile on your taxes as that is what it costs in upkeep, depreciation, insurance and gas to drive a car.

If your insurance company finds out you took option #2 they could up your insurance rate.

I would go with option #1 and think of selling the second car.

 

[arthur06]

The IRS allows about 50 cents (check the 2012 number) per mile on your taxes as that is what it costs in upkeep, depreciation, insurance and gas to drive a car.

If your insurance company finds out you took option #2 they could up your insurance rate.

I would go with option #1 and think of selling the second car.

The sheet I got yesterday said it is 55.5 cents per mile.

We were given a sheet of the minimum standards of what insurance we have to keep as well.

 

[arihillfarm]

I would stick with option one. I understand wanting to get into a program where your co. will essentially "buy" a car for you, but with the number of miles you drive a month, you likely will not have much car left at the end of a loan making only $329 monthly payments. You will be responsible for any maintenance issues above and beyond what your co. has said they will cover. I would JUMP at the chance to drive a car that only cost me $150 a month and was on someone else's dime for the rest and I would be driving it more for personal use as well.

-Astrid

 

[Gumbo4x4]

I would stick with option one. I understand wanting to get into a program where your co. will essentially "buy" a car for you, but with the number of miles you drive a month, you likely will not have much car left at the end of a loan making only $329 monthly payments. You will be responsible for any maintenance issues above and beyond what your co. has said they will cover. I would JUMP at the chance to drive a car that only cost me $150 a month and was on someone else's dime for the rest and I would be driving it more for personal use as well.

-Astrid

^^^This. And I'd be using it as my primary car on the weekends, not my "3rd" car

 

[arthur06]

^^^This. And I'd be using it as my primary car on the weekends, not my "3rd" car

I have a 2010 Ford Escape at the moment for my company car.

DW has a 2002 Ford Escape for her company car. (hers has no restrictions)

And we have 3 children. So, on the weekends we tend to take the van (with TV's) out, instead of cramming everyone into the work car.

When I go golfing on the weekends or stuff like that, when all the kids don't go, I take the work car.

 

[scrapquitler]

Boy have I come to a crossroads with this decision.

I work for a company that provides you with a company car. I pay $150 per month for the vehicle and I can/do use it for personal use as well. They are now offering an alternative of we provide our own vehicle with reimbursement.

The options are:

#1. Stay with the current program. I pay $150 per month, have a fleet card, maintenance tickets, company provided insurance, license. Basically, I pay $150 per month for my car, nothing more ever.

#2. Provide my own vehicle. There are some stipulations that go with the vehicles that we are allowed to have. It has to be within 5 model years is the biggest one. They will pay me $329.63 per month for "fixed" vehicle payment. $107.64 per month for "maintenance and tires". And $299.59 per month for fuel. Total of $736.86 per month for reimbursement.

Background. Last month I drove 2090 business miles, and I have to submit and track those every month. So, If I drive more the "fuel" and "maintenance and tires" would go up/down depending on the number of miles I travel.

I have been told (but not really by an expert) that there is never a way that taking option #2 comes out to my benefit. Option #1 is always the best option. I know its not a deal to make money, but I want to make a wise choice.

they way I figure it is

Total of $736.86 total / 2090 business miles = 35.25 cents per mile
"fixed" of $329.63 / 2090 business miles = 15.77 cents per mile
"variable" of $407.23 / 2090 business miles = 19.48 cents per mile

Also, my company car is our families 3rd vehicle. We drive it for personal use anywhere from 200-400 miles per month.

Are there tax implications for one or both options? I know that when my FIL had his company car, part of the 'cost' of the car was considered payment and it was considered part of his taxable income. If that $736 counts as income rather than a reimbursement, it might be a big difference and cost you more than the $150 you are currently paying.