Company Car vs Car Allowance

[Warren]

Hi,

I have been offered the option of a company car and a fuel card or a car allowance and a fuel card. The figures I've worked out are as follows so Id appreciate if someone could validate them for me.


The car allowance is approxinately 12k per anum so after tax and prsi its approximately 6k into my hand (i will be paying tax at the higher rate).

The car is worth approximately 40k and I will be doing no business mileage so I will have to pay BIK on 30% of the original value of the car. So I would pay tax and prsi on 12k pa which (again approximately) is 6k is tax to be deducted from my wages.

So from what my figures above tell me it would be costing me approximately 12k per annum to have the company car - the lost of 6k extra in my wage packet plus the BIK I have to pay.

Do my figures look correct?

Thanks,
Warren

 

[vandriver]

If you already own a car that you are happy to keep driving them your figures look about right.If you need/want a new €40k car them go the company car route because these days the €6k allowance wouldn't even cover the depreciation on the car

 

[G123]

Yes, I'd agree. Depreciation on a €40k car is probably €6k p.a. at the moment.
Plus don't forget all of the other costs:

• Commercial Car Insurance - €1,000 p.a.
• Car Tax - say, €500
• Servicing - another €500?
• Tyres - if two tyres on average per year, €250

On balance, running your own car is probably cheaper provided nothing goes wrong....

 

[Domo]

One great advantage of a company car is that all is usually sorted out for you - you don't have to remember to tax it, pay insurance etc, and usually, if it does break down or anything like that - the leasing company sorts it all out and you get a replacement car delivered to your door!!!!

So, although a company car does cost - you can have this peace of mind as well.

However, you do have to weigh up the cash you can have in your hand instead, and opt to run a smaller cheaper car yourself.

 

[Warren]

If you already own a car that you are happy to keep driving them your figures look about right.If you need/want a new €40k car them go the company car route because these days the €6k allowance wouldn't even cover the depreciation on the car

Thanks for all your replies guys. So my figures being correct I have a car that I am happy driving and it doesnt come near costing 12k a year so I think I much better off with the cash allowance. Costs of my current car are in and around 4450 p.a. (loan replayments 2900, Insurance 400, Tax 500, Services and parts 500, tyres 150)

 

[ninsaga]

Thanks for all your replies guys. So my figures being correct I have a car that I am happy driving and it doesnt come near costing 12k a year so I think I much better off with the cash allowance. Costs of my current car are in and around 4450 p.a. (loan replayments 2900, Insurance 400, Tax 500, Services and parts 500, tyres 150)

Just factor in one more item related to when you would plan to change your current car & how much you will have to fork out for it... if you have planned to change in the next year or two then you should have a good estimate how much you'll have spent overall.