# Car allowance vs company car



## BIG (18 Nov 2018)

Hi,
Lucky enough to get a job with a company car option (as long as I don’t get fired..)
Have option of car allowance of 16k gross or Audi A6 (fuel, servicing, insurance covered).
Don’t do much business mileage (1K), claimable at 25c/mile and about 10k personal mileage.
Seems to me allowance is the obvious choice.
BIK would be 7.5k  tax per year.
Allowance  be 8k  net per year.
Any thoughts on best option?


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## Gordon Gekko (18 Nov 2018)

The allowance I would say


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## thos (19 Nov 2018)

Have you got a car already? Is it fit for purpose? Is it paid or finance due?


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## BIG (19 Nov 2018)

Have a decent car (2014) already with no finance due which costs me around 7k per year (3.5k dep, 2k fuel, 1.5 k tax/ins/service).
So for 7.5k I get a newer car  so not much between them.
Expense Mileage is small as it’s only minimal (1k euros per year) which makes the allowance  maybe 8.5k (after fuel)


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## Purple (21 Nov 2018)

Take the allowance.


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## Frank (24 Nov 2018)

cost of your own car

New car 
depreciation 5000
Fuel to do lets say 6 liters per 100 k  11k (1.45 * 6 * 11k/100) near as 1000
Fuel prices only going one way despite recent drops in oil prices.
servicing 1 per year lets say 350 
Tyre's 2 per year 250
Tax 280
Insurance 600
tolls for me in Dublin m50 twice a day lets say another 1000

All in looking at 8500 ish per year so need to earn 17k a year to cover that 

The allowance and the company car look pretty close.
Hopefully this makes some sense.
Probably missing something 

I drive a company van for work and any time there is a problem the peace of mind of not having to worry about the costs is worth it IMHO

I would be tempted by the Company car.


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## Gordon Gekko (25 Nov 2018)

Why would you be tempted by the company car?

The OP has two choices:

- A €7,500 tax bill for the privilege of driving an Audi A6

- €8,000 a year into his/her hand to arrange his/her own car

The trick is not to buy a new car; then you can actually make money on the second option.


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## thos (26 Nov 2018)

Frank said:


> any time there is a problem the peace of mind of not having to worry about the costs is worth it IMHO



From GG's above sums, you can put a price of €500 for this peace of mind.

If going the second-hand route, this means finding suitable car, visiting dealers, getting a deal, arranging finance (if needed). Taking a certain amount of risk on a second-hand car in terms of it's history and level of servicing done / maintenance required.
That figure helps look after any unexpected servicing issues (balanced against above, in terms of level of warranty / guarantee available), or general increase in running costs over time.

I've gone car allowance in the past when available to me, but on those 2 occasions I already had a nice car which was fit for purpose, and secondly I was unsure of staying with the job long term, and in my role a company car wasn't always a given if I were to move.

I think motoring at present is a little uncertain, lots of talk of increased carbon taxes which will mean increased costs for the motorist, a tide turning against diesels but people not fully convinced by EV's yet. I'll through Brexit into the mix for second-hand car values, as this has caused issues in the market before.

I would be very tempted by company car for that peace of mind - if the car on offer was suitable, and the job had long term prospects.


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## Gordon Gekko (27 Nov 2018)

The point is that it should be possible to keep your total motoring costs below €8,000 a year, thus making money on the overall arrangement.


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## stantheman (22 Jan 2019)

With Zero BIK for the next 3 years, I think the company car becomes a more interesting choice versus car allowance if an electric car is an option & your mileage is low.


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