Company provided vehicle vs a vehicle allowance

[arcticcat522]

Thinking about approaching my employer about the possibility of providing me a vehicle allowance rather than me use a company truck. Is that silly? I currently have a truck that sits at home all day, everyday and my work truck I drive for work. This option would allow me to get rid of 1 of them. My personal truck is very rarely used. I just don't know if I suggest this, would it end up costing me much more than the insurance/registration/maintenance on the truck sitting at home.

Anyone have some insight.

Other info in point form because writing is hard

-construction industry
-work truck not allowed to be used for personal use
-have company fuel card
-company truck repair dealt with and paid for
-2 kids and a wife that use the personal truck at times
-wife has her own suv
-drive 45000km per year-ish for work
-drive personal truck 2000km ish per year

[ExtraSlow]

Your insurance on your personal truck will be astronomical once you admit to using it primarily for work. Get a quote on that first.

[killramos]

While wasteful it seems unlikely that you will come out ahead by going to an allowance, it will seem like a good idea for a few months before things start going wrong and you factor in massively accelerated depreciation on the vehicle.

Not to mention the allowance will be almost certainly be taxable, and you are the one left holding the bag if your employment is terminated.

[SKR]

You need to get them to cover the entire cost, or else you're paying them to kick the shit out of your truck.

What does your company mile their trucks out at? We do 150,000km, so say it's the same for you. If your truck is worth $50,000, by the time your truck hits 150,000km, they need to have paid you $50,000, plus all the fuel, plus all the maintenance. That's probably not going to be a deal they go for.

Edit: Plus insurance.

Edit: See if the vehicle allowance is taxable income, if it is, add 35-40% on top of the total cost.

[jwslam]

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Your insurance on your personal truck will be astronomical once you admit to using it primarily for work. Get a quote on that first.

Also IF you are in a collision, your personal rates would go up vs. you are hands clean in the company vehicle.

[ExtraSlow]

Vehicle allowance is usually taxable, right?

I seem to Remeber something about parking too. If you get paid parking for a personal vehicle it's taxable. But company paid parking for a company vehicle is not taxable. Maybe that only applies to the downtown crowd.... Or nobody these days.

[mzdspd]

I had this option in 2013 when I started at my job. I decided to take the company truck and I am happy with this decision. However, my company does allow personal use so that made it easy.

With our company, when the downturn hit in 2016, most people that had vehicle allowances all lost the allowance. Very few have gotten it back unless it was absolutely essential that they use their truck for work. Most get stuck with using a shop truck.

My brother is also dealing with this now at his company. He is a contractor for a big oil and gas company and everyone took the option to buy/lease their own trucks and now the company is pulling in the reins and buying one truck for him and another employee to share (cross shift).

[dirtsniffer]

Allowance is taxable. Mileage is not. If you're getting 50c a km it could work out slightly in your favor.

[SKR]

You're probably on your own if your truck ever shits itself too. I don't know if they'd let you expense a rental if you're getting an allowance.

[killramos]

The real way to win here is to take care of and buy out the company truck for peanuts at the end of the service life and use that as your personal truck, selling your current one, and keep rotating through every few years.

At least that’s how we used to do things with company vehicles, the guys loved that deal as they could usually flip them for a nice profit. Good way to incentivize guys to take care of their trucks too.

Doubt you will be driving around a duramax Denali, but at least you aren’t paying stupid money for a truck that never gets used.

[Pacman]

Is your company vehicle currently considered a taxable benefit? It was for me when I had them.

[cloud7]

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Is your company vehicle currently considered a taxable benefit? It was for me when I had them.

Only taxable if you put personal mileage on it.

[arcticcat522]

Thanks for all the good info guys, I'm going to figure some numbers when I have some time. Work has been insane lately. Currently, truck is not a taxable benefit, but the km I drive from home to first site and last site to home should be. I'm not saying anything if they don't. I would love to have the option to buy the work truck after some time, but for some reason, the boss doesn't seem interested in selling employees anything. Would it be crazy to think if my truck was down for repair, I would use a company truck while mine is down? I'm sure there insurance covers national drivers. The govt says how much per km you can get paid and not have it taxed as income. So let's do some marth

.59c/km for 5000km then .53c/km after. (rates from Gov.ca) =24000/year
Insurance - 6000$/yr (is that reasonable? I got some tickets)
Vehicle finance - 12500/year (new f150 with some options)
Maintenance - 3000/yr
Fuel - 8500/yr

End up paying 6000/yr then factor in the savings from getting rid of my current truck, still ends up costing around 5000/yr

That check out? It seems to confirm what I suspected and what you guys are saying. Keep the company vehicle.

[Xtrema]

not worth it. you won't be ahead for the amount of tires and repair that piles on your own truck at 45k/yr. And it's tougher for the company to deal with your one off case than a fleet. If your company truck goes out, they just give you another one. If you own truck goes out, if they just give you another one, then what's the point.

If you want to save $, sell your own truck and find alternate method for those 2000km.

[ShermanEF9]

Put the mileage on something you don't need to worry about. Its never worth getting a vehicle allowance over being handed a vehicle.

As said above one of the biggest things is insurance. I was involved in an accident a few years ago in a company vehicle. I was not at fault, but I was able to essentially "walk away" and get all the benefit (accident paid for the time off due to injury) and I didn't have to deal with the replacement of the vehicle itself.

[ExtraSlow]

Always take the company vehicle. I am hoping to negotiate one for myself later this year.

[arcticcat522]

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not worth it. you won't be ahead for the amount of tires and repair that piles on your own truck at 45k/yr. And it's tougher for the company to deal with your one off case than a fleet. If your company truck goes out, they just give you another one. If you own truck goes out, if they just give you another one, then what's the point.

If you want to save $, sell your own truck and find alternate method for those 2000km.

Not looking to save, just not be out extra and have 1 less vehicle in front of the house.

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Put the mileage on something you don't need to worry about. Its never worth getting a vehicle allowance over being handed a vehicle.

As said above one of the biggest things is insurance. I was involved in an accident a few years ago in a company vehicle. I was not at fault, but I was able to essentially "walk away" and get all the benefit (accident paid for the time off due to injury) and I didn't have to deal with the replacement of the vehicle itself.

Yep. No dealing with insurance or any of that would be great

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Always take the company vehicle. I am hoping to negotiate one for myself later this year.

Well shit, status quo for me then. Can't complain for sure.

[Twin_Cam_Turbo]

Definitely take the company vehicle. You will also be paying the extra depreciation when you dispose of the vehicle of high mileage use, higher wear and tear from going to site (assume gravel roads etc), running out of warranty quickly and the vehicle being much less desirable when it’s time to sell.

[arcticcat522]

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Allowance is taxable. Mileage is not. If you're getting 50c a km it could work out slightly in your favor.

@dirtsniffer Can you run some numbers showing .50c may work out for me? I don't see it based on the per km rate the govt allows. Witch is more than .50c.

[dirtsniffer]

Not a slam dunk by any means.