Company truck OR vehicle allowance

[curiouscanadian]

DH has been moved into a position at work which allows him either free use of a company truck OR a vehicle allowance (true amount TBC but we're guessing somewhere in the range of $300 pre-tax).

We were just reaching the stage where we were seriously considering a second vehicle. FWIW, we have a 05 Honda Civic that will be paid off in March, but would like a bit bigger of a vehicle with a few more features. We were starting to look fairly seriously at a Honda Oddessy, but the price tag would stretch our budget.

Should we keep the company truck, or take the token allowance get the second family vehicle?

As I see it:

Cons to the allowance:
- wouldn't cover the whole car payment (probably only 1/2)
- additional gas, maintenance and insurance
- God forbid DH loses his job somehow (not likely but never impossible) or the company decides to cancel the vehicle allowance.
- if we're successful at TTC#2 we'd have one more non-negotiable bill to pay while on I'm on mat leave for a year

Pros to the allowance:
- over time we would own the asset
- I would be able to drive it (insurance dictates only employees are to drive company vehicles)
- it would be much more family friendly, with a RF carseat permanently installed for DS (our spare carseat is FF-only for DS's weight)
- as we're considering TTC#2 and we would eventually need something bigger to keep 2 kids RFing as desired.

WWYD?

[sunnysandiegan]

With the info given, I would have DH use the company truck until the Civic is paid off. Then, reevaluate the situation.

[Ruthie's momma]

I would have DH use the company truck. Apart from the entire cost being covered, the typical vehicle cannot be considered an asset (as mentioned as a potential pro).

http://www.savingtoinvest.com/2008/0...liability.html

[MissMommyNiceNice]

We're a one car family and DH always has to take a company truck or car to do field work. It works out wonderfully for us and is one of the reasons we stay with this job. He can walk to work, and if he needs to go out, he gets a company car.

If, for some reason, he needs to take our car, like this morning, I usually know in advance and can make other plans. It's not that bad, b/c I too can walk to work on market days. Somedays it works out better for us b/c the price of gas payback...he'll make $200 today for simply driving our car to DC. It's not always worth it, but that's some Christmas money!

If you need a bigger car, I would find a good deal & trad in the civic for a bigger car. We did that when DS2 was born, because our little mazda wasn't going to cut it. Our car was paid off though. Our current plan is to look sometime next year for a cheap older pickup truck, because of my plant business & DH's creek habit, we could use one, but we're in no rush.

[Ola_]

Does he get to keep the company truck at your house when not working? Or is it just a case of once he gets to work he can use it for driving around? If it's available to him the whole time, even when at home, then I'd think about the truck option. Will the company pay for the gas and maintenance/repairs for this truck?

[BetsyS]

We always preferred the company car option when dh had it. At the end of the year, you are taxed a little bit on the value of the personal use of the car (like driving it to and from work). It works out to about 10% of the mileage.

But, that boosts your taxable income just a bit, and the taxes you pay are nothing (one year we figured it was like $400) compared to the cost of having your own car all year.

[curiouscanadian]

use the company truck until the Civic is paid off

We'd been thinking that but I'm being enticed by the great deals out there right now.

the typical vehicle cannot be considered an asset (as mentioned as a potential pro)

I guess I know that, it's just, we'd have something physical to show for it in the end, right?

If you need a bigger car, I would find a good deal & trad in the civic for a bigger car.

We've put a lot of milage on the Civic, so I don't know how much we'd really get for a trade-in. We bought it new, which I knew at the time was a bad financial move, but I wanted a new vehicle once in my life and vowed I'd run it into the ground to partially make up for it.

Does he get to keep the company truck at your house when not working? Or is it just a case of once he gets to work he can use it for driving around? If it's available to him the whole time, even when at home, then I'd think about the truck option. Will the company pay for the gas and maintenance/repairs for this truck?

Yes, DH can drive it back and forth to work and can stretch it a bit to a bit of personal driving (mostly to pick up stuff from Home Depot ). The company also pays for all the gas and maintenance of the truck.

I guess I just wish we had another family vehicle. Even if we had a second carseat for the truck, it wouldn't feel right to have it permanently installed in the work truck. And I'd really like it if DH could go back to doing drop--offs with DS in the morning, so I can quit being late to work 90% of the time. (The window for drop-off vs. my work start time is small enough that I'm really on the mercy of traffic each day. )

[ParisApril]

I vote for the company vehicle.

My DH has had a company vehicle for close to 13 years now.

Pros of a company vehicle.

- free vehicle
- free gas for work (shhh and a bit for personal as well)
- no repair costs
- wear and tear is on their vehicle not ours

Cons of a company vehicle and I can only think of one.

- DH doesn't get to pick out exactly the model he would prefer.

Because he is a carpenter they have some requirements as to what he can get. He does give input but ultimately the choice is the bosses. Right now his work van has to fit a full sized sheet of drywall and all of his tools and gear. Because of this his van only has 2 seats.

Over the last few years we have really cut the amount we drive a vehicle. I wouldn't need one myself while he was working so if we could just convince work to buy him a truck with room for 4 then we would sell our car and just keep the work vehicle. I am salivating at the thought of some extra money in the budget!

ETA: All of the guys who work with DH and have a company vehicle don't own another vehicle.

[MyTwoAs]

Add me to the "company truck" bandwagon. My husband had a company truck for seven years and we only had one family vehicle during that time.

[just_lily]

Does your husband's work require him to actually need a truck? It sounds like the van would be yours, which would leave him with the Civic.... and that wouldn't necessarily be compatible with trips to Home Depot.

Unless the car allowance is high enough to cover ALL of your costs for your own vehicle, I would use the work truck. And as for the car seat I would have DH mention to his boss that he needs to drop his kid off on the way to work in the morning, and would it be a problem to have the carseat in the truck.

[Usually Curious]

Originally Posted by just_lily

Does your husband's work require him to actually need a truck? It sounds like the van would be yours, which would leave him with the Civic.... and that wouldn't necessarily be compatible with trips to Home Depot.

Unless the car allowance is high enough to cover ALL of your costs for your own vehicle, I would use the work truck. And as for the car seat I would have DH mention to his boss that he needs to drop his kid off on the way to work in the morning, and would it be a problem to have the carseat in the truck.

this.

[Caneel]

Originally Posted by just_lily

Unless the car allowance is high enough to cover ALL of your costs for your own vehicle, I would use the work truck. And as for the car seat I would have DH mention to his boss that he needs to drop his kid off on the way to work in the morning, and would it be a problem to have the carseat in the truck.

I vote for the company vehicle and to add to the bolded, make sure you know the company's expectations on personal use and how much "ownership" of the truck your DH will have.

We have company trucks for our foremen. These trucks, while assigned to a particular person, are at times put into the general rotation when needed. Like if a van is in the garage for service or employees need to go in different directions, Foreman A's truck is used by whoever needs it that particular day. Any personal use that would somehow interfere with company use would be a problem.

At my prior job, employees had company cars that were for their sole use only and there would never had been a situation where personal use was questioned.

[MyFullHouse]

This is exactly what dh and I debated 3.5 years ago. There's no avoiding the fact that there are pros and cons, either way. We happened to choose the car allowance.

Pros- dh got a heafty car allowance, which enabled him to afford a hybrid, which is a HUGE help with his very long commute, especially when gas was $4/gallon a while back.
Also, as mentioned, I can drive that car, so we're also saving money on gas when I run errands.
One of the biggest factors for us was that dh's company DOES CHARGE THE EMPLOYEES a monthly fee for the "privilege" of driving their vehicle. We're making out slightly ahead.

Cons- If he were to lose his job, we'd still have the car payments to make for about 18 more months. That's a big deal, particularly with the mileage on it, cutting it's value drastically.
Also, it obviously shows up on our credit report as outstanding (though always paid up) debt. And we're responsible for all maintenance and repairs.

If it's going to cost a lot out of pocket after the allowance, I'd recommend against that option. Dh drove company cars for years before they began charging what they do now, and it worked out well for us. The only reason we're taking the risk is because it hasn't cost us much to do so.

[curiouscanadian]

When I read this it was totally a moment for me. That would make so much sense for us!

Unfortunately, however, Caneel's description of the situation is exactly what we're dealing with:

We have company trucks for our foremen. These trucks, while assigned to a particular person, are at times put into the general rotation when needed. Like if a van is in the garage for service or employees need to go in different directions, Foreman A's truck is used by whoever needs it that particular day. Any personal use that would somehow interfere with company use would be a problem.

The truck DH is using actually used to be assigned to the shop for whomever needed it and still is prone to being used by others. (FWIW, he works for an electrical contractor as a project manager now, used to be the estimator.) I spoke to DH about it and he will ask his boss about installing a carseat but he feels the biggest hurdle with be the matter of perception to other employees - that the vehicle is being used as a family vehicle, which is really not the intent of the company trucks. But he said he would ask, so we'll see...