I'm accepting a new position and have the option of either a company vehicle or a vehicle allowance. I'd prefer an allowance so I can buy my own vehicle and use it as I wish, but I've never gone the allowance route and don't know what to ask for. One other company i spoke to offered allowances of $750. What is a fair vehicle allowance amount?

Industry is construction. Location is Austin.

My company considers $1000/month to be reasonable. Do they also pay you mileage for business mileage? If not, consider gas, maintenance, etc.

I don't know the particulars yet. Just that I have the option. I'm down to negotiating an allowance amount and vacation and I just wasn't sure what a fair amount was. I think a car is worth $1000 a month but wasn't sure if I could ask for that much.

if you NEED a new personal vehicle or you plan on being with the company for a while, take the allowance. If it is short term, take the company vehicle.

Unless something happens that changes my mind or circumstances I'm planning for this to be a very long term career. And I do need a vehicle because I've been in a company vehicle the past 6 years and don't have a vehicle of my own. That's part of why I'm interested in an allowance instead of a company vehicle. I'm just not sure what to ask for as a reasonable allowance. Is $1000 per month too much? Too little? I'd like to buy a nice truck that I can keep for 10+ years.

If they are paying for mileage too then $1000 is ridiculous.

In my industry the car/truck allowances I see are usually no more than $750 in addition to mileage. My company pays $600 per month and also pays mileage. When I was recruiting and trying to get guys to come over from the competition I believe the most I ever heard was $800.

One thing to check on is if there are any restrictions on the car/truck you choose. I know a guy who is in this situation and his vehicle can't be over three years old.

If you take the allowance, you need to calculate your monthly payment, increase in full coverage insurance, and then expected maintenance you will have to do. Also, if you own the vehicle, will it retain any value if you are putting a ton of miles on it.

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If they are paying for mileage too then $1000 is ridiculous.

In my industry the car/truck allowances I see are usually no more than $750 in addition to mileage. My company pays $600 per month and also pays mileage. When I was recruiting and trying to get guys to come over from the competition I believe the most I ever heard was $800.

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I'm still waiting to hear back for more details on the allowance so I'm not sure if he pays a flat rate or a flat rate plus mileage. I suspect it's a flat all inclusive rate. If that's the case, what's a good amount?

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One thing to check on is if there are any restrictions on the car/truck you choose. I know a guy who is in this situation and his vehicle can't be over three years old.

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Good to know. I don't anticipate restrictions but I'll ask.

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If you take the allowance, you need to calculate your monthly payment, increase in full coverage insurance, and then expected maintenance you will have to do. Also, if you own the vehicle, will it retain any value if you are putting a ton of miles on it.

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I likely won't be putting a ton of miles on it. It will essentially be a commuter vehicle for projects relatively close to my house and the office is only 3 miles from my house.

I would say $750 was standard about 18 months ago.

damn, this conversation exposes I am underpaid in my allowance. I get $600 (minus taxes..remember that), plus fuel reimbursed. No mileage. Any I am doing about 2000 miles/month right now.

[This message has been edited by m48xhp (edited 10/17/2012 11:22a).]

You definitely have to consider that the allowance is taxed. Once you consider maintenance, insurance and lease or car payment $1000 gross isn't an outrageous request...especially if you arent going to be paid for mileage/gas for business use of the vehicle. That probably works out to around $700 net of taxes. Then subtract out insurance and regular maintenance. Also subtract gas for business use if you aren't paid mileage. You're then left with a reasonable amount for a loan or lease payment on a decent vehicle.

I have a company car. I was not given the allowance option.

I think there are pros and cons to having a company car. It's nice to avoid wear and tear on your personal car (you can even sell it), but it's another thing you're responsible for. I prefer my personal car to my work car, too.

Oh, another pro of the company car is that miles used for business purposes (besides commute) are not taxed. I think the allowance works the same way?

[This message has been edited by 281TexAg (edited 10/18/2012 12:16a).]

I've had a company car for the past 5 years or so. It's a great benefit and its nice having fuel, insurance and maintenance paid for by someone else. That being said, if the vehicle allowance option is high enough to cover a payment for the vehicle of my choosing plus insurance and fuel then I'd rather go that route and have my own vehicle.

Still waiting to hear back. I think I'm going to propose $750 plus a gas card or $1000-$1250 without a gas card. That seems reasonable based on the research I've done.

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I know a guy who is in this situation and his vehicle can't be over three years old.

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I think this is pretty common when you are taking clients out.... or if you need the vehicle to preform (hauling, etc).

Wow. I was getting $200 a month plus $.30 a mile in my old sales job.

Wow!
$500 per month with no milage here.
Just remember its very hard to put a price on wear and tear, AND territories will always change some to smaller but mostly to bigger.

I think it also depends how you will be using your vehicle for business purposes. I am also in construction, get a basic allowance, and have a fuel card (I am supposed to pay nights and weekend fuel). However, my truck is never used for any real construction activities so it doesn’t see much if any real work related wear and tear.

If you will truly be using your truck in the field and running up a lot of work related miles and field abuse, then I would consider a company vehicle. If its something to go to and from the office with an occasional work trip, consider the allowance.

Also, its nice to be in my own vehicle when I hit up a HH or want to go out directly from the office. And FWIW, haven’t had a truck payment in 4+yrs while on an allowance.