Company Car Or Company Car Allowance – Which Should I Choose

If you have the choice of a Company Car or Company Car Allowance, you should check out how much Company Car Tax (or Benefit In Kind Tax as it is also known) that you would pay if you accept a company vehicle, and then decide whether to go for the Company Car or cash. You could be better off taking the car allowance and leasing a car yourself, even though the allowance is taxable.

The Cash for Car scheme has become increasingly popular with both employers and employees in recent years. Employers save time and money in not having to source, maintain and administer a fleet, although they must always be aware of their Duty of Care and Health & Safety responsibilities. And as an employee, you have more freedom to choose the car you drive, and you could even be better off if you dont spend all of the company car allowance you receive. However, some employers do stipulate the type and age of vehicle that is acceptable, according to the job you are doing.

If you choose to accept a Company Car Allowance, its worth considering Car Leasing vs Buying. Car Leasing (also known as Contract Hire) is simply the hiring of a vehicle for an agreed period of time for a fixed monthly rental. Unlike Short Term Rental or daily rental, a car lease is usually for 2-5 years, after which you can simply hand the car back with no further commitment or, in some case, you may be able to purchase the vehicle if you wish. Car Leasing is a convenient, cost-effective and hassle-free way of financing a new vehicle, and there are many benefits of leasing a car. It enables easy budgeting of your motoring costs, and the fixed monthly payments can even include servicing and maintenance. Also, theres no need to worry about depreciation or disposing of the vehicle at the end of the contract.

Dont forget that if you choose the company car instead of the company car allowance, all your motoring costs (except private fuel) will be taken care of by your employer including insurance, road tax, servicing and repairs. If you choose the company car allowance, you will have to pay for these things yourself.

If you choose a company car allowance and lease a vehicle which you use in the course of your job, youre entitled to claim from your employer a mileage allowance for each business mile travelled. H.M. Revenue & Customs approves certain mileage rates that employees can claim for business travel, and the current rate is 40p per mile. Check the HMRC website for the latest information.

Part way between the company car and a company car allowance is something called Employee Car Ownership. This is where your employer gives you a car allowance, but the company organizes the finance deal and takes care of insurance and running costs. This may also be worth considering if your employer offers such a scheme.

Car Servicing And What’s Involved

Car servicing is an important aspect of car maintenance that will enable you car to be safe. Whether you own a Mercedes, Audi, BMW or Volkswagen for example, it is good practice to keep to your manufacturer’s servicing schedule. This will result in the car being less likely to breakdown.

A service will often cover the following aspects; engine oil and oil filter change, checks on the levels of coolant/brake fluid/power steering fluid, checks on lighting /signalling/brakes/clutch, reading of onboard auto diagnostics, air filter/spark plug replacements. These checks will generally cover MOT and safety requirements and because of the complexity of today’s cars are best carried out by manufacturer trained mechanics. A further breakdown of service detail will outline the benefits of some of these areas.

Engine oil and filter change lifecycle will vary according to the oil type used. Modern oils have moved from mineral to semi-synthetic to fully synthetic. Synthetic based oils will generally last longer than the old mineral type and offer a greater range of protection to the engine, an example of which is Castrol GTX Magnatec that can protect the engine from the start due to magnetic properties built into the oil. A professional car servicing garage will use the oil recommended by the vehicle manufacturer.

Fluid levels for the brake, steering and coolant systems should be checked and topped up as necessary as part of a service, but these should also be checked by the owner from time to time. Lack of engine coolant may result in substantial engine damage to anything from the head gasket to the big ends (this will require engine replacement!). Lack of brake or power steering fluid will also cause problems with control systems which are obviously paramount for driver safety.

Almost all modern vehicles will have onboard electronics which may include auto diagnostic functionality. A properly equipped service garage will be able to link into these systems and gain information of any intermittent or impending problems that may have occurred since the last service thus giving an extra layer of security and oversight.

Air filter replacements are necessary at anything from 25,000 to 50,000 miles and are also dependent on environmental conditions. A clogged air filter will restrict air flow to the engine thus reducing power and fuel consumption. Spark plugs are amongst the least expensive parts of the engine and probably one of the most critical for engine tuning. Some spark plugs are claimed to have life spans of 100,000 miles, general manufacturer service recommendations will specify replacement every 30,000 to 50,000 miles. Even if longlife spark plugs are fitted they will require removal and regular cleaning to make sure they don’t seize in the engine.

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Car Rental Charges Explained By Industry Insider…

Prevent additional credit card charges on car rental.

First of all, you must understand how the total price you pay is calculated. Everything starts with the daily base rate this is the rate you pay for the daily use of the car excluding all other charges. It doesnt mean that this is the price you pay!

Instead, you may find your total bill is double of that of the base rate. Extra mandatory charges like GST, airport location surcharges, administration fees, vehicle registration fees are all part of the total bill given to you at the rental counter. I cant stress enough the importance of getting a bill at the end of your rental, but this is another story. So, by the time all the extra charges are added onto your bill, you may find yourself paying almost double that seductive base rate.

To give you an example, a friend of mine rented a car in Australia with a base rate around $177 for four days. The final total? Including a vehicle registration fee, admin fee, airport location surcharge, a surcharge for not filling the gas tank, and a GST on top of all those other charges, my friend paid about $358 – more than a 100 percent increase over the base rate.

So how can you avoid nasty surprises? Below you can find a list of standard surcharges you’re most likely to find at most car rental locations in Australia, as well as some tips for your next trip to the car rental counter.

Airport and GST Surcharges

The majority of car rental transactions happen at the airports around the country. Airport surcharge is something that car rental supplier has no control over and it varies considerably from one airport to another. Therefore, when you pick the car up from the airport you should expect to pay between 3 and 18 percent extra on top of other charges. Unfortunately, you can’t avoid paying GST, which can will add 10 percent. However, if your car rental bill amounts to over $300 and you leave the country within 30 days after returning the car, you may claim GST component of your car rental at the airport.

However, you can avoid the airport charges – such as airport location surcharge fees by picking up and dropping off your car at an off-airport location. Be sure to weigh the possible inconvenience and the price of any additional transportation against the concession fees charged by the airport location – which can be between 3 and 18 percent of your total price.

The bottom line? If you don’t want to pay the airport location surcharge, check out your rental options downtown.

Insurance

Your rental car comes with a standard insurance liability of between $2900 and $3300 depending on a car rental supplier. This liability can be further reduced by paying an extra daily charge of between $25 and $27. However, since the price of insurance is almost half of what you pay for you car, I recommend that you check your credit card/travel/car insurance to make sure it doesnt cover you in a rental car.

Gasoline Charges

For your convenience most car rental companies provide cars with a full tank of fuel, however, be assured that if you dont return the car with a full tank you will pay a higher price for petrol used to fill up the empty tank. However, most car rental companies now offer the option of purchasing a full tank of gas when you first take the car, enabling you to return the car with as much or as little fuel as you wish.

Please note that there is no refund for unused fuel, so its likely youll be paying a little extra for the convenience of skipping the trip to the gas station.

Drop-Off Charges

An extra fee is usually charged if a car is returned to a different location than where it was picked up. This fee varies by location; in some instances there is no charge, while you could pay $300 or more for cross-country drop-offs. However, some companies do not require a charge when dropping off in-state at many Queensland and New South Wales locations.

The 24-Hour Clock

Car rental industry operates on a 24-hour clock rate. However, there is also a 59-minute grace period before hourly charges apply. To give you an example, if you rent a car at 12:00pm on Tuesday and return it by 12:59pm on Wednesday, you will be charged for one day only. However, if you return the car after 27 hours (in this case after 15:00) you’ll then be charged for the full extra day. Hourly charges apply between 25-27 hours.

Early Returns

When you rent a car for a particular number of days, you sign a sale contract for that period. So, just like with any other contracts out there, if you break your contract you must pay cancellation fees. Since, car rental companies set their rates based on the rental period, the longer you keep the car the cheaper the daily base rate. If you managed to reserve a car for 7 days using one of these hot weekly specials and then decide to bring the car two days earlier, you might get charged at a default daily rate and your total car rental charge for 5 days might end up costing you more than if you kept the car for 7 days. Therefore, please dont forget to ask a car rental agent if you pay different daily rate for earlier returns.

Mileage

Most car rental companies offer unlimited mileage in metropolitan areas, including all major capital cities (with an exception of Northern Territory) and some tourist destinations. I would suggest checking your contract prior to signing it as it clearly displays whether you get unlimited kilometres or not. Keep in mind though that smaller car rental companies usually charge mileage if you exceed a given daily km quota. In addition some “hot” special rates may not include unlimited mileage, so be sure to check before you sign a rental agreement.

Vehicle Registration Fees

Varying Rates and Peak Season Surcharges

Here is a tip that will potentially can save you hundreds of dollars. Book in advance!
Rental car companies’ rates vary a great deal from city to city, and sometimes even within the same city. Make sure to shop around. Be aware that you may pay a specific surcharge for traveling at a “peak” time, e.g. School and Public Holidays, Major events in your city, etc.

Age Penalties

Due to the insurance limitations, if you’re under 25, you may have to pay an additional fee, usually about $25 per day. Those companies who will rent to drivers under 21 often charge much steeper surcharges. Internationally, you’ll not only see penalties for underage drivers but also for older ones — those over 70 may have to pay extra (if they’re able to rent at all).

Additional Drivers

Adding more than one driver to your rental agreement often carries a surcharge, anywhere between $7 and $25 per day. Note that some companies, like Avis and Budget, will allow the renter’s spouse or life partner to drive the vehicle for no extra charge — so if both partners are planning to take the wheel, consider renting from one of these providers.

Frequent Flier Fees

Car rental companies often charge a small fee when you request frequent flier miles for your rental. The fee varies by airline, and can range anywhere from a few cents to $2 a day.

Extras

There may also be additional charges for things you had not considered, like infant and child seat rentals, roof racks and other extras. These could run you anywhere from $5 to $25 or more per day, depending on where you rent.

A Car Salesman Career Can Be A Great Choice

Have you given some thought to a car salesman career. The current state of the auto industry shows us that this is an ideal time to enter into a car sales career. Today the car makers are taking more responsibility for the satisfaction of the car buyer and their car buying experience. In order to improve and clean up the image of the car salesman the dealer, sales people and the manufacturers are making change and improvements. The less than desirable car salesman image from the past is hard to change, but things are getting better as the car salesman is learning to be a true car sales professional.

As the business of selling cars grows as predicted the opportunities for those thinking about a car sales career will also increase. The myth that a car salesman should be a smooth talker and outgoing is false, they old need to communicate. There are many very good car sales people that are shy and introverted. Selling cars for a living is not about you, it is about dealing with people. Man or woman a career in car sales is only right for a few just like any career.

Even if you never consider being a car salesman before this might be a good time to reconsider. Not everyone has a day at work that consists of fun, making money and enjoy a number of other benefits. If you meet an ex-automobile salesman that speaks poorly of selling cars they almost always have a reason for their failure. Selling cars is much more than going for a ride with customers and that is why the turnover rate can be higher than other careers. Sorry, but that is not the case when it comes to selling cars. It takes a little more than driving people in cars to be a successful car salesman.

A career in car sales might be a great alternative for the person that can’t afford or desire to go to college. Going to college and having a degree is not a requirement to be a car salesman. Selling cars for a living doesn’t require college and it still has the potential to create an annual income of 100K or more. No experience needed at most dealers because they will teach you how to sell cars with their method. One great feature of selling cars is that your dealership will train and mentor you so that you can start making a very good sales income.

The perks that go along with a car salesman career can include a new car demo, first crack at all fresh trade-ins, an unstructured workday and a chance to have some fun with your fellow car sales people. One of the greatest things about selling cars for a living is being able to control your own income, you can make as much or little as you want. Now you decide, if you like making money, having great benefits and no chance of being bored think about a car sales career.