Company car or my own?

November 11, 2012 3:23 PM

Should I keep the company car or choose to purchase my own car and receive a monthly allowance?

I work for an educational publishing company that has provided me with a company car for the past 6 years, a Dodge Caravan. Currently, all insurance, gas, and maintenance is paid by the company. I submit a monthly report detailing total miles driven and specifying how many are personal miles. We're supposed to keep personal miles to approximately 10%. The company has put out a poll asking if employees would prefer to keep their company car or choose to use their own car and receive a Fixed and Variable Rate (FAVR) monthly allowance. It is described this way:

IRS FAVR: Fixed and Variable Rate
• IRS accountable plan that is accurate, fair, and defensible
• Geographic and mileage sensitive
• Allows non taxed reimbursements, no W-2 reporting, no federal, state or FICA withholdings
• Continually updated to meet changing market conditions
IRS Mileage Rate: $.55 per mile for 2012
• Standardized across the entire US
• Not always fair for people with different driving patterns or who live in higher cost of living areas
• Only updated annually and does not consider current market conditions (i.e. gas prices)

The Caravan is not a car I would ever choose myself - it has been gutless and rattley since day one, and time and miles haven't improved it any. However, I do like the space, and every time I fill it up or have maintenance done, I appreciate that it's not coming out of my pocket.

If I was to choose my own car, I would need one that have space in the back to easily get heavy bins of books in and out of (up to 6 bins at a time), take the best advantage of the gas mileage reimbursement, have flexible space for up to 5 adults, and if I'm dreaming, have all wheel drive or 4-wheel drive for the occasional trip over the mountains when chain controls are in effect. I like SUV's way better than vans.

So...keep the company car, or choose my own, and which one?

posted by ms_rasclark to work & money (6 answers total)

I haven't a clue as to how it would shake down, but I do have a friend that declined the company car because of the way the company handled an accident a fellow employee had. Not sure that would be a consideration in your case.
Hope you get some good answers.
(from the way your post is worded, sounds like you're really drooling over the idea of your own vehicle)
posted by BlueHorse at 3:47 PM on November 11, 2012

In general, I prefer to have my own car/phone/etc. rather than use a company one. I don't want to be left scrambling in case my employment situation changes suddenly.
posted by snickerdoodle at 5:06 PM on November 11, 2012 [1 favorite]

I've always driven a fair amount at work and for the most part have driven my own vehicle. I'd go for the mileage reimbursement deal. Just be careful buying a vehicle, because you WILL spend the .555 a mile, pretty much. The expense check may seem like a lot of money, but if you buy an expensive new vehicle you can easily get upside down in it unless you pay cash or pay it off quickly.
posted by randomkeystrike at 6:40 PM on November 11, 2012

Depending on how often you need to load the bins into your car a minivan may suit your needs better than an SUV because of their much lower floors and larger volume. Also you'll probably get better gas mileage with a minivan rather than a SUV. Even mini SUVs like RAV-4s have crazy high load heights compared to a Caravan.

Usually the IRS mileage rate will about cover your expenses (fuel, depreciation, maintenance, insurance) of a mid range, mid fuel economy vehicle. Usually the additional cost of an new SUV along with it's increased thirst for fuel will mean the mileage rate won't cover everything. However buying a vehicle a few years old will mean taking a smaller depreciation hit and can allow for a more expensive class of vehicle or allow you to put money in your pocket. For example on the odd occasion where I get paid mileage on my car it almost all goes into my pocket because I drive a 20 year old car with a tiny engine.
posted by Mitheral at 7:12 PM on November 11, 2012

Buy your own Honda Odyssey. Think of it as your spaceship.
posted by oceanjesse at 11:50 PM on November 11, 2012

If I buy a car, and it might not be my choice when all is said and done, I'd ideally like a hybrid. I'm totally open to buying a used car, with relatively low mileage. At this point, I just have to figure out how to answer the survey today. I would love to hear more from people who have had to make this choice, or have bought a car under similar circumstances. This question is now a bit stale so this may be all I get :) Thanks to those of you who replied.
posted by ms_rasclark at 11:06 AM on November 12, 2012