IN some respects, being offered a company car is an exciting development that is indicative of a progressive career. While this depends on how you measure career success, of course, it’s certainly not something that could ever be considered as a negative step.
Given this, and the much-publicised benefits of company car schemes, it seems like a no-brainer to make the most of such an offer. It may not make sense for everyone, however, particularly in instances when firms also present you with the offer of a cash sum as an alternative.
But which option is right for you? Here are some of the key considerations.
How much disposable income do you have each month?
One of the main benefits of a company car scheme is that it covers the cost of maintaining and fuelling a vehicle, including both scheduled and unscheduled repairs. This can minimise the financial outlay and stress levels experienced by motorists, as well as negating the need to sell vehicles at a loss in the future. Your only real consideration is the level of company car tax you pay.
So a company car scheme is alluring if you have lower levels of disposable income, as reducing your expenditure can translate into incremental, long-term savings that could prove crucial in the current economic climate, especially as you may have been considering a medium-term car loan.
Make no mistake; this is an extremely important consideration, and one that should heavily influence your decision when choosing between a company car and an alternative cash sum.
Do you want the autonomy to choose your own car?
When presenting with a choice such as this, it’s also important to consider your priorities. If you want the autonomy to select the precise make and model of vehicle that you drive, for example, the options available through a company car scheme may seem a little restrictive.
Sure, companies are required to invest in safe, modern and fuel-efficient fleets, while there’s also a growing emphasis on hybrid models that optimise performance and lower CO2 emissions and potentially BIK.
Still, any kind of restriction may serve as a deterrent to some, particularly car enthusiasts who have specific tastes and preferences.
Could the cash be used elsewhere in your household?
In all instances, your existing circumstances will also have a huge bearing on your eventual choice. These need to be given careful consideration, otherwise you’ll risk making a decision that is at odds with your requirements.
Let’s say that you’ve recently purchased a car, for example, or enjoy a relatively small commute to work. In this instance, the offer of a cash sum is not only the most logical choice, but this money can also be deployed to excellent effect elsewhere in your household.
This is well worthy of consideration, particularly if you have can use the cash to achieve a specific objective or settle an outstanding bill.
However, your cash allowance will be subject to benefit in kind tax and this should also form part of your considerations.