A Company Car Is a Huge Savings Perk

company car

Not every job requires a company car.  For those of you who read about my life in sales, know that I am a sales representative and love it.  Don’t get me wrong, its not all peachy all the time.  There are plenty of frustrations with the role, but compared to other job disciplines it feels like I have it made both from a compensation and lifestyle perspective.  If any type of travel is required for a job, a company car may be needed or can be hopefully negotiated.

Why push a prospective employer for this if travel is needed?  Because a PERSONAL CAR IS A HUGE EXPENSE.

Between a lease, gas, insurance, maintenance, repairs, tolls (a lot in my HCOL area), and taxes, you might be paying a lot to commute to work as it is.

If you see this as part of the package of joining a new company in a new role, I would give this perk serious consideration.  Most companies will “tax” you for personal usage of the car by requiring a monthly log totaling business vs personal miles.  I rarely drive for personal usage since I live in a city where my gym, grocery store, shopping area, etc are all in walking distance.  The time where I do want to drive out of town result in a very very minimal expense that is really negligible compared to self-ownership of the vehicle.

Also – Don’t forget about taxes.  I used a 25% federal and 5% state tax to demonstrate the savings.  When you think about a person car as an out of pocket expense, you need to realize that this is an after tax expense.  That means Uncle Sam gets his cut.  When the company covers these costs for you, the value of the savings goes way up.

The table below breaks down my estimates of costs for owning a car given the amount of gas I use and tolls.

Month Year
Car Lease $200 $2,400
Gas $100 $1,200
Insurance $100 $1,200
Maitnence/Repairs $50 $600
Tolls $80 $960
Excise Tax (some states) $20 $240
Total Saved $550 $6,600
DONT FORGET TAXES
Total Saved (Pre-Tax at 25% Fed + 5% State)
$9,429