Company cars are used as an incentive by employers – they’re a way of giving you a nicer vehicle, boosting your status, and even saving you money.
But it’s not all plus points with company cars and accepting the wrong offer could end up costing you money. In this article, I look at the key reasons you should and shouldn’t take a company car from your employer.
You can then decide for yourself whether it’s a good deal for you.
Why you should accept a company car from your employer
There are some persuasive reasons to accept a company car from your employer and the three key ones are:
- It’s a status symbol
- You get a nice car
- They save you money
You might be persuaded by all of these reasons, perhaps one or two stand out, or maybe you’re yet to be convinced. Below I explain why each of these three points matters to you.
Get a nice car
It’s pretty simple: many company cars are really nice and that means you can often get a better car than you could normally afford.
While this is in part to make you feel valued, it’s another status symbol thing – your company car represents your employer, so it must look befitting.
In many industries, it’s a mark of your success and seniority to have a company car – every journey you take in it advertises that your employers think you’re an asset, one that needs to be treated well.
Saves you money
Once you’ve looked past, well, how having a company car makes you look, there are some great money-saving reasons to get one.
The obvious example is that you no longer need your own family car, but that’s not all. For instance, you can save money on diesel and petrol. This is because many company cars come with fuel cards, and your employer may even consider using UK supermarket fuel cards (which give you access to fuel discounts).
This is great because not only do you get a free car, but you also get to fill it up for less and you can do so while doing your weekly shop.
Why you shouldn’t accept a company car from your employer
You’re now convinced that getting a company car is a great idea, but there are a few things you need to know before accepting an offer:
- You have to take out the finance for the car in your own name
- You’ll need to pay for the road tax, insurance, and upkeep of the vehicle
- If you rack up the miles then it can quickly make company cars expensive to run
- The allowance you get for the car is based on your personal income tax rate
These are all super important things to consider when you’re deciding if you’re going to accept a company car from your employer.
Why? Because it means that you may not be able to get as good a car as you expect, while it also demonstrates that getting a vehicle from the business is far from free – there are still plenty of day-to-day costs that you need to cover.
In addition to this, some employers use company cars as a way of offering you a lower salary. This means that accepting one could hit you in the pocket, leaving you worse off than if you’d turned down the offer and carried on driving your own car.
Summary: it depends on the deal you get from your employer
There are some great plus points to getting a company car. Equally, there are also some important downsides that make it less appealing than you might initially think it is.
Ultimately, the decision on whether you accept a company car from your employer boils down to one thing – the deal that’s on offer.
So, read through the offer in detail, think it over, and then make the best decision for you.
Recommended further reading: 5 TIPS FOR CREATING A HOLIDAY BUDGET