Newspaper article Evening Gazette (Middlesbrough, England)

How to Find the Right Road over Car Dilemma

Newspaper article Evening Gazette (Middlesbrough, England)

How to Find the Right Road over Car Dilemma

Article excerpt

As companies increasingly offer employees a choice between a company car or hard cash, it can be confusing for business executives to find the best solution for their pockets

Martin Burke, head of Skoda business sales, said: "I am often asked by people faced by company car drivers the benefits of both the company car and the cash alternative.

"There is no right or wrong answer to this dilemma; each case should be considered on its own merits.

"However, we have pooled our knowledge and produced the following guidelines for each individual to consider and come to the conclusion that best suits their situation."

THE CASE FOR A COMPANY CAR

LET'S start with the obvious. For those who don't have money to burn, a company car is an excellent proposition.

Despite paying tax, you are relieved of the worry of unexpected bills, and the expense of regular road tax, insurance, service and MOT payments not to mention the cost of ongoing maintenance.

Cash, at first glance, can often be a more enticing offer - however, the cash allowance is taxable, so careful thought needs to be given as to the car you would buy with the allocated allowance.

Bear in mind that many companies stipulate the type of car you must choose, and if you cannot afford a vehicle to the standard of the equivalent company car, you would be foolish to resist - after all, in business many first impressions are made by our cars.

Consideration should also be given to the industry in which you work.

In a field such as sales where company cars are the norm, opting for a cash allowance could leave you in a sticky situation when changing companies.

You can get stuck with a car if the new business has an enforced company car policy - a potential difficulty if you have entered into a personal contract hire arrangement.

Finally, for the increasing numbers of us commuting significant distances to work, the financial benefits of a company car will far outweigh any mileage allowance.

THE CASE FOR CASH

THE lifestyle benefits for choosing a cash allowance and therefore your own car are multiple; not only can you choose the type of vehicle that you want to drive and that best suits your lifestyle, exchange it for something new as and when you wish but, above all, the car is yours - so you can alter or modify it as you wish. …

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