Topic: Whats a Great Car allowance

[ven]

I am getting ready to  Start a new job.. The Company has mentioned a car allowance.  i live up north in Ontario and will be doing a fair bit of km's. I saw and read the post  about the best cars and SUV to look at and really enjoyed all the ideas..

But what I don't know is about the actual allowance.

What should be included.
Ie, Amount, Km's, insurance, Gas Cards..

I want to know what an average deal or what a fair deal is.  I don't want to be greedy.

What are some of the deals you all struck up and please be honest Im not looking for the dream deal, I would prefer actuals.

Thank you
BTW awsome site

Steve

[wing]

Depends on the type of job I would suspect....

[Mitlov]

Demand the best.  If they won't spring for a Bentley Continental for you, they don't respect you.  Look your boss straight in the eye and tell his cheap ass to go to hell.

[ven]

would be a District manager type position

[ArticSteve]

For Walmart     

[mrthompson]

Be content that you have a job.

[dash]

Ven,

Car allowance is income. I suppose the more you can get the better for you. Please note, maximum tax deductible allowable monthly lease is $800, if purchasing capital cost is 30K, amounts exceeding are not tax deductible.
Try to get an allowance that covers your estimated gas, repairs, insurance, and lease maximum. If purchasing factor in Km's as part of depreciation.
Remember to keep good records (operating expenses and km's traveled for business vs personal), it is tax wise to make sure the ratio of business travel is greater than personal.
Make sure employer will provide a T2200E form (declaration of conditions of employement0

[Trainman]

Of course you asked for a great car allowance, so this would be it (although I would get a Jag rather than a Bentley) 

Demand the best.  If they won't spring for a Bentley Continental for you, they don't respect you.  Look your boss straight in the eye and tell his cheap ass to go to hell.

As for real life, I would go for a km rate, at least $0.50 per right now, with a clause that will open it up when gas prices start to climb again.  I run my own company and know exactly how much it costs me to run my vehicle and right now the .50 is an OK rate for a car based on about 30,000 km/yr.  Different if you will be driving a SUV or pickup, will need to bump it up.

And as noted, it will be income as well if you are an employee (been there too), so take that into consideration.  For you, best bet may be to talk with a good tax accountant.

And welcome to the forum, hope you stay   

[vdk]

Where I worked they paid $.55/KM..

[johngenx]

It's been about 10 years since I had a company car allowance.  We had the following choice:

1. Take a company Neon, gas card, and pay nothing out of pocket.

or

2. Be paid (taxable benefit) the maximum lease payment allowed by CCRA and get $0.35/km.  That would be close to $0.60 in today's money.  You had to pay for your own insurance, etc out of the per-km charge.

Most of my colleagues either leased a car at the max payment allowed under tax laws, or went higher.  I was an odd duck as my Mercedes was less than the max and I used the difference for insurance, etc. and then the per-km went much further.

I also went weird and instead of the "$399 payment" that MB was running for the C230, I upped the payment and had them lower the residual (possible then, probably not now, as they don't seem to do stuff on an individual basis) and then at the end of the lease, I bought the car for well below the market value.

Overall, I paid surprisingly little for my car, even after the taxable benefits were claimed.

What most did:  The max at that time was about $650-700 for the payment under CCRA, so that's what the company paid.  They would lease a Navigator or other $$$ SUV for $1000 and pronounce how they were driving something so expensive for only $300 or so out of pocket.

I'm cheap.

[ArticSteve]

Currently Revenue Canada will allow 46 cents per km as a non taxable benefit.  Wife has choice between 46 cents non taxable or 55 cents taxable.  For her its a no brainer to take the 46 cents.

The best situation is to receive the full monty and take a company "car" with all it's associated costs assigned to you but as a taxable benefit.  But of course a lot depends on what kind of vehicle it is.  Usually they're econo boxes.  For the more fortunate it's something one actually enjoys driving. 

[Sir Osis of Liver]

My employer also pays $0.55/km mileage.

I almost always rent and bill the project/client directly, so I'm not is the same situation as you.

Congrats on the new job!

[Brig]

When I was a rep, I worked for two different companies in a row.  Company A only provided a company vehicle (Taurus), and you expensed your gas and repairs.  Company B provided a car allowance of ~$750/month IIRC, and you got a per km mileage reimbursement.

Given the choice, and having been through the situation, scenario B is better -- especially if you already own a car, or pay off whatever you buy very quickly.  If the axe comes down, and you're out of a job, at least you still have wheels. 

[initial_D]

I will change my job if had to drive a Taurus too. 

A monthly allowance + expenses & maintenance is a good deal.

[neil]

It's been about 10 years since I had a company car allowance.  We had the following choice:

1. Take a company Neon, gas card, and pay nothing out of pocket.

or

2. Be paid (taxable benefit) the maximum lease payment allowed by CCRA and get $0.35/km.  That would be close to $0.60 in today's money.  You had to pay for your own insurance, etc out of the per-km charge.

Most of my colleagues either leased a car at the max payment allowed under tax laws, or went higher.  I was an odd duck as my Mercedes was less than the max and I used the difference for insurance, etc. and then the per-km went much further.

I also went weird and instead of the "$399 payment" that MB was running for the C230, I upped the payment and had them lower the residual (possible then, probably not now, as they don't seem to do stuff on an individual basis) and then at the end of the lease, I bought the car for well below the market value.

Overall, I paid surprisingly little for my car, even after the taxable benefits were claimed.

What most did:  The max at that time was about $650-700 for the payment under CCRA, so that's what the company paid.  They would lease a Navigator or other $$$ SUV for $1000 and pronounce how they were driving something so expensive for only $300 or so out of pocket.

I'm cheap.

Smart way to do it John.  A plus to this as well, if you sold your car, for more than you had to pay for it, the "profit" is not taxable.  If you are able to write off the payments, or the company pays for it, those payments are tax deductable. It's like a mini-RRSP.  Win!

[Triple Bob]

If the axe comes down, and you're out of a job, at least you still have wheels. 

Good point.

[Ex-airbalancer]

If the axe comes down, and you're out of a job, at least you still have wheels. 

Good point.

Depend on what your monthly payments. If it is paid off great, if not and high kms, you are screwed
I have had to supply my own vehicle for the last 25 years, if I was working for someone else I rather have them supply the vehicle, one less thing to worry about

[davidy]

Personally, if I didn't already have a vehicle, I would use the monthly vehicle allowance as the lease payment target. I would definitely check out the details of your company's vehicle allowance policy. Mine is a fixed amount ($3xx) plus mileage which varies on the fuel price (taken at the middle of the month). Depending on how much you drive and the mileage rate, this would likely have a significant impact on your monthly vehicle expenses.

Also, in order to maximize your tax situation, just use the vehicle for business as much as possible. If you can afford it, get an inexpensive vehicle for personal use only.

Personally, I would not up the monthly lease payment like Johngenx in case the job doesn't work out while you on a lease. IMO, if you plan to own the vehicle after the lease ends, it makes more sense to possibly re-lease it at the end of the lease with a very low payout at the end of the re-lease.

Just my 2 cents.

Dave

[ven]

All amazing advice. I had no Idea that It could be used as a tax right off if the company provided the Allowance.
I would stay below or match the total amount.

we have our own personnel vehicles already, but would always entertain the idea of a new one.
 
So the allowance should for the most part be included with Km's  I'm thinking one is not good with out the other.
If the company includes km's. Is this where the fuel would come from (be included in the km)

Is having repairs included common..

Thank you for answering some of my questions. Im new to having an allowance and don't want to end up paying to go to work.

I know you people have answers to things I wouldn't even know to ask..

Steve

[wing]

Usually repairs aren't included.  When they give you 55cents a KM that is to cover gas and wear and tear on the car.