# Company car vs Allowance



## Introuble83 (4 Dec 2020)

Currently have a company car . Value 30k. Bik costs me about 150pm after tax.

I have an option of 8k allowance and 22c per km. My understanding is I can earn 5k of mileage tax free.

if I switch I will have to fund a car , fuel, tax ,insurance and maintenance. I would have to borrow 10k to purchase a reasonable car . I will be covering 40k km a year once Covid is sorted .
Any opinions are welcome . I think switching makes sense . By my calculations I would be circa 5k a year better off


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## Gordon Gekko (4 Dec 2020)

So 40,000 km @ 22c per km?

Pretty heavy-going on a car for starters.

That’s €8,800 tax-free.

Not sure where you’re getting the €5k cap, is that your company’s policy? It’s certainly not Revenue’s. The Civil Service Rates or anything less than that are fine, and your company’s rates are quite a bit lower.

Plus an €8k car allowance, so let’s call that €4k after tax.

So you have €12,800 per year to fund everything: The cost of the car/depreciation, fuel, tax, insurance, and maintenance?

What might diesel cost, maybe €2,000 for the year? Based on 60mpg for 40,000km.

Tax €200ish.

Insurance; what’s that for someone on the road?

Maintenance? Surely hefty enough with mileage like that?

Then you have to buy something decent.

It probably does make sense.


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## Introuble83 (5 Dec 2020)

Gordon Gekko said:


> So 40,000 km @ 22c per km?
> 
> Pretty heavy-going on a car for starters.
> 
> ...


Thank you for the reply Gordon .
The 5k seems to be a company rule . 
insurance I guess about 600
I think the car depreciation and maintenance is were I could loose out . 
Receiving a brand new car every 3 years is a nice perk though . I’m in two minds about switching


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## Gordon Gekko (5 Dec 2020)

The €5k seems a bit arbitrary and a bit mean.

And 22c is below the Civil Service rates anyway.

On that basis, I think I’d take the company car for an easier life as my sense is that any ‘profit’ would be marginal.

Plus you’re driving a new car.


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## torblednam (5 Dec 2020)

Gordon Gekko said:


> The €5k seems a bit arbitrary and a bit mean.
> 
> And 22c is below the Civil Service rates anyway.
> 
> ...



Agreed. The difference between the 5k and the 8k that should be tax free for mileage, coupled with the rate per km being relatively low, is probably the straw that breaks the camel's back.


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## Cervelo (5 Dec 2020)

Don't forget to factor in the €150 BIK that you would also be saving per month
Another thing to factor in is you have not held personal car insurance in your own name then this could be a lot higher the €600
Personally for me, a new car every 3 years and presumably all costs involved in running the car including personal mileage and all for €35 per week
sounds like the better deal compared to a car allowance of €8k and mileage allowance capped at €5k per annum


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## Zenith63 (5 Dec 2020)

Just FYI BIK is currently 0% on fully electric cars, so if one of the electrics out there might suit your needs it would make the company car option very compelling!


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## Introuble83 (5 Dec 2020)

Zenith63 said:


> Just FYI BIK is currently 0% on fully electric cars, so if one of the electrics out there might suit your needs it would make the company car option very compelling!


We only get a few options for company cars and electric is not one . We can travel up to 700km a day so I am not sure how practical it would be


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## Introuble83 (5 Dec 2020)

Cervelo said:


> Don't forget to factor in the €150 BIK that you would also be saving per month
> Another thing to factor in is you have not held personal car insurance in your own name then this could be a lot higher the €600
> Personally for me, a new car every 3 years and presumably all costs involved in running the car including personal mileage and all for €35 per week
> sounds like the better deal compared to a car allowance of €8k and mileage allowance capped at €5k per annum


I have my own policy with my wife as a named driver on our second car / her car . The 5k is just the tax free cap I can earn any amount but is 40% after 5k euro of miles


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## Zenith63 (5 Dec 2020)

Introuble83 said:


> We can travel up to 700km a day so I am not sure how practical it would be


Not very!


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## vandriver (5 Dec 2020)

You have been insulated from all the costs of running a highish mileage car for the princely fee of 35 quid a week.
It is instructive that the only way the figures work to make a 'profit' is by factoring in a second hand car worth a third of what your employer provides.
I'd leave as is,and have worry free driving in a new car paid by someone else.


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## Cervelo (6 Dec 2020)

Introuble83 said:


> I have my own policy with my wife as a named driver on our second car / her car . The 5k is just the tax free cap I can earn any amount but is 40% after 5k euro of miles


Just thinking about this this morning and there would be two other costs I would also factor in
Presumably you will get insurance cover for yourself on your work car but your wife will now need to be the principle policy holder on the second car
How much will the insurance be for both cars ??
Secondly I would presume if you are unfortunate to be involved in an accident in the company car there is no increase in the weekly BIK
but with an allowance you will have to pay for the increase in your insurance premium rather then your employer


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## Introuble83 (6 Dec 2020)

Cervelo said:


> Just thinking about this this morning and there would be two other costs I would also factor in
> Presumably you will get insurance cover for yourself on your work car but your wife will now need to be the principle policy holder on the second car
> How much will the insurance be for both cars ??
> Secondly I would presume if you are unfortunate to be involved in an accident in the company car there is no increase in the weekly BIK
> but with an allowance you will have to pay for the increase in your insurance premium rather then your employer


Very valid points thank you . I think based on the majority of opinion keeping the company car makes more sense


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