Companies often provide vehicle and transport benefits, these benefits differ depending on your position, job requirement and specific company policy. Some companies offer pool cars, which is more of a shared vehicle situation and often the vehicle is driven by multiple employees instead of just one. Company cars are usually bought for employees that do a lot of driving annually, like sales reps or site inspectors. Some companies choose to only ever buy one specific make and model of vehicle, whilst others give their employees more freedom to choose their own. If your company has offered you the chance to open a dialogue regarding your choice of a company vehicle, you need to consider the below factors before making your decision.
- Fuel Economy
After having watched a few documentaries (which naturally now makes me an expert on the subject…) I am far less inclined to punt eco-friendly vehicles as emphatically as I have before because it seems that the jury is still out on just how environmentally friendly they truly are. The theory is there but it appears things have worked out rather differently in practice. What I will still recommend wholeheartedly is buying a car that has impressive fuel economy. Read a Volvo XC60 review and be sure to check for things like fuel economy and running costs, you’ll be surprised at how affordable some of the big-name brands work out to be.
This one is a no-brainer for me but many people don’t consider the size of the vehicle before they buy it. If you are going to be driving along narrow country lanes and parking in small spaces, then a large vehicle probably isn’t going to be too practical for you. Take some time to think about how the size of your new vehicle is going to impact your life and choose carefully afterwards. One of my friends’ zips around in a compact car and she couldn’t be happier but she doesn’t have children so she can do things like that. Factor in maintenance and cleaning costs too because these will change depending on the size of your vehicle.
Once you know what size car you are looking for and how fuel-economic you need it to be, you can then look at important things like what budget you must work with. Most companies have a cap of around £35 000 but that is for company heads only. For an average sales professional, that figure drops by about 50%. Another reason to carefully consider how much you want to spend on your company car is that approximately 40% of all organisations in the U.K allow their employees to purchase the car at the end of its replacement period, so it’s not just about how much the car will cost your company, it’s also about how much you’re prepared to pay at the end if you want to buy it.
Your choice of company car should largely be based on what you require from it. If you’re in a building trade then you’ll need a bigger vehicle, like a van, to help you go about your daily duties. If you’re a salesperson and you don’t have big items to haul around, you can consider a smaller saloon type but then you may want to opt for a more comfortable vehicle if you spend a lot of time travelling. This can make your decision more difficult because if you are going to use the vehicle for dirty work then you may be far less inclined to buy a brand-new company vehicle. Buying a pre-owned vehicle has its perks but it also has its downsides, so you need to consider both.
Although it may be very tempting to buy a cheaper make of vehicle, remember to do your homework beforehand. Often the cheaper vehicles have higher maintenance costs or where they lack the impressive safety ratings of the trusted brands. The make you opt for will have an impact on the overall cost of the vehicle so choose wisely. Most car brands have entry-level models that are more affordable but lack the added extras like heated leather seats – which isn’t the end of the world, depending on your priorities.
Safety ratings can be confusing so be sure to consult with someone in the know before you try and understanding the various safety rating systems. Some of the safety features you should want are things like antilock brakes, airbags, and traction control, which a lot of new cars come with as a standard. There is a massive difference between basic safety features and the more high-tech ones, like the high-tech pothole detection systems which allow the car to automatically adjust the shock absorbers to reduce the impact caused by hitting a pothole.
Finding a suitable insurance for a company car can be a hassle but there are reputable insurance companies in the U.K that provide a wide range of comprehensive business car insurance options. Be sure to check that the business car insurance option you choose provides you with sufficient coverage to make sure you’re not underinsured. Even if you end up buying the car from your company at the end of the period, you still require business car insurance if you use the vehicle for work purposes.
Remember that even though it’s a company car you will still need to pay tax if you are your family use the vehicle in a private capacity, which includes commuting. Tax is paid by working out what the value of the vehicle is to you, which includes the overall cost of the vehicle as well as what type of fuel it uses. This value can be reduced (so you end up paying less in taxes) provided that you meet a specific set of criteria. Tax costs are lower if you drive a hybrid that has CO2 emissions of 1 to 50g/km. There are tax calculators available online to help you estimate the amount of tax you will need to pay.