In an ideal world, accepting a company car from your employer is a no-brainer. However, if you know about them beforehand, there are various reasons that will make you question accepting the offer. As with most incentives, there are pros and cons to accepting and the receiver should be wholly confident and happy with their decision.
To be or not to be?
With all serious musings set aside, a company car is a considerable incentive and there are a number of advantages to accepting a company car from your employer.
The winning argument usually lies with the fact that insurance, road tax, repairs, car servicing and fuel costs are all covered by the company. Indeed, this is all within reason. You won’t be so lucky if you’re prone to driving recklessly or performing donuts in the work car park. Nonetheless, these are reasonable costs that would be taken care of by your employer and will no longer a concern for yourself. This enables you to spend the money elsewhere or save if you’re a practical thinker.
For others, the most convincing factor will be the idea of driving the newest version of the chosen car model every three to four years. Admittedly, this is purely a vanity aspect, but if you’re going to drive a car owned by the company, it may as well be an aesthetically pleasing, environmentally conscious, and powerful vehicle.
For further reasons to accept a company car, the OSV have compiled a convincing argument for and against: https://www.osv.ltd.uk/company-car-worth-it/.
Are some things too good to be true?
On the other hand, when you get deeper into the finer details and small print, the idea of having your own company car may not seem as good as it was made out to be.
When talking about driving the newest model above, you may have noticed that it says “the” chosen car model, not “your” chosen car model. In most cases, your company or employer will choose which car model you get to drive as they will be covering all costs associated with said car. Therefore, they’ll most likely choose a model that is cheap to run and won’t cost a fortune to replace any necessary parts. Be mindful that whilst you could be driving a new model, the chances of you driving your dream car are slim.
Following on from this point, the car will never fully be yours as you don’t own it. As mentioned previously, the costs are being covered by the company and for that reason, the car is owned by the company. As a result of this, there are complications to driving a car owned by someone else. For example, the employee is restricted to how often they can use the car for their own personal use. This means you may need to pay and run a second car to use on the weekends or after work. For most employees, the option to use their own car for work and claim back miles through the company will be more appealing as it’s less hassle, easier to track, and takes up less space on the driveway.
In conclusion, there are advantages and disadvantages to both sides of the argument. Essentially, the easiest way to decide will be to look into how often you use your car outside of work. If it’s often, then consider approaching the option of claiming the business miles acquired in your personal vehicle through the company. However, if you decide you only really drive when you’re commuting and for business appointments, then why not save yourself some extra pennies and accept a company car.