I got a promotion and have the option to choose a company car. I'm trying to determine if it is beneficial. If I chose the company car I am inclined to keep my current car for the reasons below:

1. My boss will know if I get a ticket.
2. My boss will know if I get into a fender bender.
3. If god forbid I get into an accident, I have to find the nearest blood lab and get tested within a couple of hours to make sure that I am not drunk or on drugs. If you don't go, it's an automatic fail.

I don't do drugs or drink and drive but I'd rather stay under the radar if possible. The last thing I want to do is have to find a blood lab if I'm on vacation etc. Worst case scenario is I have a beer at dinner get into an accident, test positive for alcohol and then its a career ending event.

If I chose the company car they take $150 out of my paycheck every month. They pay for all gas, insurance, and repairs. Total of $1800 salary loss per year.

Working Situation:

- Drive 25k-30k miles a year.

Current Car:

- 2009 Honda - paid off
- 125k miles

If I choose to drive my current car for work I get reimbursed .50c per mile. In their eyes that covers everything including gas, insurance, depreciation, and maintenance. However, I highly doubt that this reimbursement covers all these expenses.

Obviously getting the company car and selling the Honda is the best financial decision, however I am trying to evaluate the following options.

1. Keep Honda, don't get company car.
2. Keep Honda, get company car and drive it only for work.

Out these options, which do you feel is best?

Having a beer at dinner and getting into an accident is your career ending event? I know you say you don't do drugs or drive drunk, but it sounds like you do exactly this. You either don't do this kind of stuff, and thus you aren't worried and this isn't even a decision in the first place, or you do and thus need to weigh the pros and cons. Answer is don't do it, and stop doing the things you're worried about in the first place.

Lol, a blood lab on vacation, with your company car.

LOL..

But seriously, get the company car and enjoy a nice ride to/from and when you need for work. Keep the Honda for all other things and the future.

Yeah getting a DUI in a company car will not be a career ending event if you're actually valuable to the company. It might mean you don't get to have a company car anymore though. Killing someone while driving drunk is going to be a major life event in a company car or not.

OP even if you're a serious addict the company car is probably the way to go. If you have a job good enough to give you a company car you can afford the uber home after a night of drinking.

If you're driving 25k-30k miles per year just for work and you don't think 50 cents per mile will cover your own vehicle cost then the company car is a no-brainer because the $1800 they are deducting from your pay is a lot less than the $12.5k-$15k+ you expect to spend on commuting to work.

50 cents per mile will cover the cost of owning a Honda Civic that isn't financed or insured to the hilt but if you drive 25k miles per year the company car costs ~8 cents per mile. Also if the company car experiences a mechanical failure you're not on the hook for finding a reputable repair shop, time invested getting to and from said shop, time invested taking it in for routine maintenance, etc.

The easiest way to avoid tickets, DUI's, etc. is to drive like an adult. EZ game.

Yep, company car is a no brainer in this case. Just dont drive like a moron and you'll be fine. Not hard.

Pretty sure it's half a cent per mile instead of 50 cents per mile otherwise reimbursement is snap call.

Given the IRS figure is fifty-six cents a mile, I bet it is fifty cents and not five cents.

nah $.50 is surely correct. Half a cent wouldnt even cover gas!

IRS max reimbursement rate is up $.56 I believe.

If its 50 cents a mile, then surely take the reimbursement.

Using 30k mile example, that's +15k a year. Your current car lets say gets 20 miles per gallon which is somewhat conservative but gas will come out to be 1500 gallons * $3 = $4500, leaving you with over 10k for depreciation and repairs. Even if depreciation and repairs uses up 10k, which I doubt it will or you should seriously look at a new car, ev 0 is still better than the -1800 in the company car case.

I mean you get enough reimbursement that even after gas, you can cover payment on a new car since you are getting almost 1000 a month.

This calc seems to ignore the $12,500 the company would reimburse him for the 25k miles if he kept the Honda. Unless I am misreading?

I didn't count insurance on the Honda but OP has to pay that regardless of his choice.

Yeah, forgot some stuff so I deleted it. Sorry.

Let's assume he drives 25k/mi per year for work.

Fuel - $3.50/gal in a vehicle that gets 35mpg = .10/mi
Tires - $500 for new tires, balanced/installed every 60000/mi = ~.008/mi
Oil change - $30 every 5000 miles = .006/mi
Misc maintenance - $250 = .01/mi
Insurance assuming good driving record, liability only @ $600/yr = .025/mi
16.5%/year depreciation on a vehicle valued @ $10000 = ~.07/mi

Total cost per mile is 22 cents or $5500/year to for the 25k mile annual commute. A better estimate is 25 cents per mile or $6250/yr. But OP isn't going to just drive to work and back, and he doesn't get reimbursed for the miles he isn't commuting for work. If he drives 5000 miles/year outside of work thats $1250. Mileage reimbursement is taxable income and if we assume he's in the 25% tax bracket that's another ~$3000 deducted from the total. So he gets ~$9500 income, $6250 in work-related auto expense, $1250 in non-work auto expense for a net of $2000.

So it looks like Amoeba is right that driving the personal car is the better play and I'll have to eat my hat on this one unless there's some math that I'm missing.

OP says the company would cover the insurance for their car.

What I mean is that if he is keeping the Honda even in the taking company car case, then he has to still pay insurance on it.

Also while depreciation and repair on the Honda would be much less if he wasn't driving it , it's still nonzero.

CBorders math is pretty good. If you have a paid-off car, the company car is probably not the right move. If you add a $200-$300/mo payment on there it changes the math a good bit.

One big benefit, which is more psychological probably but you could put a $-value to it if you had to, is what happens if your 125k mile car breaks down. You're paying for a new car, you're paying for a rental car in the interim, etc.

Obv that's an edgecase event, but honestly so is something like getting a fender-bender on vacation and having to go find a place to do blood work.

at $2000 net per year, I would still take the company car. As the only reason the net works outs is that the Honda is paid off and steep depreciation has already happened. The car will rapidly be approaching replacement so needs to be taken into consideration and this $165/month net wont cover a new car. Also driving your own car into the ground for work sucks so there is def a psychological benefit for driving the company car into the ground if the net is close.

If the real net is more like $5k or $7k per year, than probably the pendulum swings definitively towards keeping the Honda. I dont believe that mileage reimbursement is taxable and I suspect the maintenance assumptions are on the low side so calcs would need to be sharpened a bit.

We have to keep in mind that it is 2000 net vs -(1800 + insurance & maintenance of Honda).

LOL @ a beer at dinner = driving drunk.

I didn't see it mentioned but what type of car would the company car be?

The math has to include some kind of calculation for that.