What would be a reasonable car allowance please?

[GinG]

Hi All,

Starting a new job a week Monday (hoorar!)

Part of the package was a company car, however as I will initially be on a 5 month probation the option of cars were somewhat a little poor (fiesta for example).

I told the MD I would much prefer to run my Audi A4 initially that way no one is tied in and then when we come to review the contract I can look at a better lease deal.

In the mean time what would you say is a reasonable car allowance to ask for? So far all fuel is paid for, just wonder what I should be asking on top for maintenance and running my own car please?

 

[[TW]Fox]

This depends entirely on the role surely, a car allowance for a director on the board of an FTSE 100 firm will be many times larger than a car allowance for a junior tech or similar.

 

[GinG]

This depends entirely on the role surely, a car allowance for a director on the board of an FTSE 100 firm will be many times larger than a car allowance for a junior tech or similar.

I understand where you are coming from.

It is a new role, I will be working for an Irish firm heading up UK sales working from home.

Not a bad salary (above UK average) + good commission payment, however I am wanting to try keep costs for them down as it does take away a lot of pressure on me as I will be developing the business from nothing here in the UK, however I will be bringing some of my customer on board.

Thanks

 

[Mike1983]

As Fox says, entirely dependent on role and company / industry norms for what you do.

For personal cash allowance I get £545 month, registered on companies insurance (inc my wife), no private mileage or fuel card but business mileage can naturally be claimed back.

Hope that helps?

Mike

 

[GinG]

As Fox says, entirely dependent on role and company / industry norms for what you do.

For personal cash allowance I get £545 month, registered on companies insurance (inc my wife), no private mileage or fuel card but business mileage can naturally be claimed back.

Hope that helps?

Mike

Thanks Mike,

I work within the plastics industry. My last role was a higher salary, no bonuses and office based so no cars required, not had any experience in my own company car. I must say though before things changed our sales rep had an Audi A4 3.2 Quattro fully spec'd as a car.

I would like to think that once settled and all being well with the contract the usual cars you see people drive are the typical BMW/Audi.

How does that work then with the allowance, is it just shown on the payslip as £545 and then the usual tax taken off?

 

[Mike1983]

Yes, it's effectively treated as an increase in your base salary so tax / NI is taken off. It does not however form part of your pension figures.

 

[GinG]

Yes, it's effectively treated as an increase in your base salary so tax / NI is taken off. It does not however form part of your pension figures.

Ok thanks for that.

I was thinking of asking for say £300 per month + Fuel...

The car in question is an Audi A4 56 reg. This should cover maintenance and give a nice little bonus.

 

[Housey]

however I am wanting to try keep costs for them down as it does take away a lot of pressure on me

No, no no no no no!

You have a value and they have taken you on because of that. Saving them a few quid each month will have no effect on your own success or their view of you if you fail. My first piece of advice is change that mindset as you are also taking a risk, don't undervalue yourself because of that risk or seek to make their life easier at your cost.

In terms of money I have no idea, but being first in country I would think their budget for you is higher than number 2 onwards. Maybe £600 a month is fair, but I have zero idea what your package is (or need to know!).

 

[Mike1983]

Ok thanks for that.

I was thinking of asking for say £300 per month + Fuel...

The car in question is an Audi A4 56 reg. This should cover maintenance and give a nice little bonus.

You may have an issue there. Most (all?) companies will have regulations concerning the the age and suitability of the car. Usually this means a car that is no more than 4 years old and must have 4 doors for example. Where I currently work, they allow up to 6 year old cars, my last place was 4 (and did not pay insurance)

Mike

 

[GinG]

No, no no no no no!

You have a value and they have taken you on because of that. Saving them a few quid each month will have no effect on your own success or their view of you if you fail. My first piece of advice is change that mindset as you are also taking a risk, don't undervalue yourself because of that risk or seek to make their life easier at your cost.

In terms of money I have no idea, but being first in country I would think their budget for you is higher than number 2 onwards. Maybe £600 a month is fair, but I have zero idea what your package is (or need to know!).

Thanks Housey,

Appreciate the reply.

The situation is, the company I used to work for went into liquidation. I was looking for a new job and I had around 4 or 5 different options available to me without sending out any CV so I was in demand, however I chose this company as I really liked the guys who own it and also the potential earnings are pretty impressive.

When I took this job on I have dropped £10k on the basic salary, but the car + commission packaging would mean in year 1 I would be on track to earn £15k above what I was on previously.

 

[iaind]

Remember the car allowance is taxable so you'll have the respective tax deducted from it. If you earn more than 40k then you're going to only take home 60% of the allowance

 

[Housey]

Thanks Housey,

Appreciate the reply.

The situation is, the company I used to work for went into liquidation. I was looking for a new job and I had around 4 or 5 different options available to me without sending out any CV so I was in demand, however I chose this company as I really liked the guys who own it and also the potential earnings are pretty impressive.

When I took this job on I have dropped £10k on the basic salary, but the car + commission packaging would mean in year 1 I would be on track to earn £15k above what I was on previously.

As I said they see your value and that is great and they have got you cheap, which is less great. You have a good commission and that is good but again it's a low risk for any employer when they are not having to commit up front, so you have already done your bit. You are right to chose people over money, but my advice is don't devalue yourself as nice people will still take advantage of paying what they can get away with.

Good luck!

 

[GinG]

You may have an issue there. Most (all?) companies will have regulations concerning the the age and suitability of the car. Usually this means a car that is no more than 4 years old and must have 4 doors for example. Where I currently work, they allow up to 6 year old cars, my last place was 4 (and did not pay insurance)

Mike

The guy didn't seem too bothered. The cars he was being offered by the finance company for a short term, immediate delivery was a focus van & fiesta so the Audi on image is a little better!

 

[GinG]

As I said they see your value and that is great and they have got you cheap, which is less great. You have a good commission and that is good but again it's a low risk for any employer when they are not having to commit up front, so you have already done your bit. You are right to chose people over money, but my advice is don't devalue yourself as nice people will still take advantage of paying what they can get away with.

Good luck!

Thanks very much! Yes to be honest for what I am bringing on board I am cheap but these guys seem to be fair and will review in 5 month time.

Will send an email to the MD and see what he says to between £500 & £600 per month. End of day it is giving them a none commitment deal for the first 5 months which must be worth something also.

 

[Housey]

Thanks very much! Yes to be honest for what I am bringing on board I am cheap but these guys seem to be fair and will review in 5 month time.

Will send an email to the MD and see what he says to between £500 & £600 per month. End of day it is giving them a none commitment deal for the first 5 months which must be worth something also.

Good stuff, be prepared to negotiate and don't be embarrassed in asking for this as it's not a significant amount. You are after all there to make business happen, and negotiate so show them that is part of your DNA and ensure you have a rationale behind your request. If they come back with £300 I'd push back and say we are here to do this right and professionally. Let's do that and let's get on with it and are we going to quibble over £200 a month?

 

[rodenal]

Absolutely - it's always worth remembering that you are a very small cost in a big pool, so a couple of £k is going to make little to no difference to them.

Whilst your thought process is genuinely commendable it's also vital to look out for number 1(within reasonable bounds) as business is incredibly fickle, plus you'll ultimately want to aim for an x%/£k increase over the next few years - why handicap yourself?

 

[roadie]

I hope GinG doesn't mind me jumping in on this thread, as it is somewhat related and I don't want to start a new one.

I've been offered a job where I would need to provide a vehicle and insure it for business use. I'm yet to receive the contract but am told that they pay out on work mileage at between 25-40p per mile.

How does this sound?

 

[Havana_UK]

I hope GinG doesn't mind me jumping in on this thread, as it is somewhat related and I don't want to start a new one.

I've been offered a job where I would need to provide a vehicle and insure it for business use. I'm yet to receive the contract but am told that they pay out on work mileage at between 25-40p per mile.

How does this sound?

You need to get more information about the how they work the mileage payments.

The Inland Revenue says that you can be paid 45ppm (for the first 10,000 miles) and then 25ppm thereafter for running your own vehicle for business purposes without it being considered a taxable benefit.

If you're being paid less than that then you can claim tax relief on the difference between what you're paid and the HMRC approved rates, but with no monthly cash allowance to back this up it might not be a good deal.

 

[Kenai]

I hope GinG doesn't mind me jumping in on this thread, as it is somewhat related and I don't want to start a new one.

I've been offered a job where I would need to provide a vehicle and insure it for business use. I'm yet to receive the contract but am told that they pay out on work mileage at between 25-40p per mile.

How does this sound?

If it's the odd trip here and there it's not too bad but I would expect an allowance if you're using it regularly. 45p doesn't go very far when you think about fuel, tyres, servicing, insurance, repairs etc. that come with significant extra mileage.

 

[roadie]

The job is for a Borough Council if that makes any difference?

I have no idea about mileage. When I get the contract I will have a lot of questions for my manager and the HR department of which this is one.

I have made it to the age of 32 without a car so there is the fun process of buying and insuring one to get into if I accept the job offer.