Greetings,
I was curious to get everyone's opinion on this situation.

I have received an offer from a company that offers the option of a company truck or a vehicle allowance. I am trying to get more details on this so I can compare all costs, but here is was I know now.


Company provided truck:
F150 or Chevy 1500. Crew cab 4 door.
No company logos. Spouse can drive company truck.
Insurance is provided. Gas card provided. All maintenance is handled by company.
Truck can be used for personal use but would have to report personal use miles.


Vehicle Allowance:
A payment of $700-800. (still trying to get the exact amount).
I would get reimburses for millage (55 cents I think)
I have to provide my own insurance.
Maintenance would be on me (I believe…waiting to confirm).
Not sure on the requirement of vehicle age. Probably something 3 years old or newer.


Just poking around online, if I had to buy a truck today the one I'd get would be around $55,000. Putting $10,000 down and using a supplier discount I have access to would get the payments around $750-800. Insurance would be around $80-100 monthly. Initially, I thought the company truck would be a no brainer, but now I am thinking how the allowance might work out better in the long run.

What are y'alls thoughts?

It sounds like you would have the ability to get a nicer truck if you take the allowance option (if that matters to you).

Also it looks like you will be reporting mileage either way, personal mileage if you get the company truck or business mileage for the allowance option. I would think it would be easier to track business mileage especially if there is potential for somebody else to use the vehicle.

I have a company truck and it's set up the way yours would be. They cover fuel and all the maintenance. I report my business and personal mileage and am taxed accordingly. Mine is a 2021 Silverado 4x4 crew cab. If I had a choice, I would go with company truck instead of an allowance.

Unless I am missing something obvious, I would rather have the allowance. Once its time to get a new truck you should have some equity that will reduce the principle on your next vehicle. If you play it right, then over time you could end up with a payment below your allowance that you can pocket or a bigger budget for a nicer truck.

Jbob04 said:

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I have a company truck and it's set up the way yours would be. They cover fuel and all the maintenance. I report my business and personal mileage and am taxed accordingly. Mine is a 2021 Silverado 4x4 crew cab. If I had a choice, I would go with company truck instead of an allowance.

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Same here. I have a nicer 2022 xlt f150 4 door crew cab now with my current job that they provide. Use it a bunch on weekend, personal hunting trips etc. Not having to cover maintenance and fuel is big. Yes, I do have to report personal miles, but the company norm is to just keep your reported miles below "10" of total miles driven that month and everyone is happy.

This new employer seems to have a similar mind set.

coastalAg said:

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Unless I am missing something obvious, I would rather have the allowance. Once its time to get a new truck you should have some equity that will reduce the principle on your next vehicle. If you play it right, then over time you could end up with a payment below your allowance that you can pocket or a bigger budget for a nicer truck.

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this is where my hold up is.

Try to play it right like this example and have to pay for 100% of my personal use fuel.
Or just take their truck and practically never pay for gas or maintenance. Like I mentioned above, they wont care how much I drive it for personal use.

Do you have a truck or vehicle now that you would be able to sell if you go the company vehicle route? That could be the other angle. If you can liquidate a vehicle and invest the proceeds than thats not a bad option.

Congrats on the job either way. Having your vehicle and transportation costs covered by your employer is an enviable position to be in.

coastalAg said:

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Do you have a truck or vehicle now that you would be able to sell if you go the company vehicle route? That could be the other angle. If you can liquidate a vehicle and invest the proceeds than thats not a bad option.

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No, I do not.
Have had a company vehicle ever since I finished college. Never having a car payment has been nice and the vehicles are comparable to what I would have ordered anyways if I had to get a personal one today. (don't care for the higher packages and trim levels).

Thank you.
Its a great feeling. I am actually going to work for a customer that I have worked closely with over the past 5-8 years.


















EDIT TO ADD INFO SINCE I AM LOCKED OUT DUE TO ROOKIE STATUS

Southernskies:
Very true, but only if 100% of those 100,000 miles were business miles that I would submit.

A few more details that I just got confirmed.
The allowance is $10,080 per year. $840 a month. paid out biweekly as part of my normal paycheck.
This amount is considered taxable income. The current reimbursement rate is $0.625/mile


i have no idea how many miles I will truly drive (do about 4,000/month now), but I'm guessing it will be 1500-2,000 miles total and 30-50% of that would be for work in this new role.

So if I did 2,000 mile per month and 30% we business, that would be 600 business miles.
600 x 0.625 = $375 monthly mileage reimbursement.
$840 reimbursement post tax is closer to the $600 range post taxes

I believe the IRS mileage is 62.5c/mile. So when you get to 100k miles on your truck the company will have paid for your truck plus some. And then you can resell it with plenty of equity left in it. Seems like a no brainer.

Haven't done the gas calcs but obviously if you get a cheaper truck you will pocket a lot more money that a $55k truck.

southernskies said:

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I believe the IRS mileage is 62.5c/mile. So when you get to 100k miles on your truck the company will have paid for your truck plus some. And then you can resell it with plenty of equity left in it. Seems like a no brainer.

Haven't done the gas calcs but obviously if you get a cheaper truck you will pocket a lot more money that a $55k truck.

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The .625 is the maximum allowable deductible IRS limit. Companies can reimburse whatever they like. We have some that are less than that as we provide fuel and others that provide a base allowance and then $.xx per mile (like $.30 mile).

I'd confirm the mileage, as pointed out above a lot of companies drastically reduce the mileage paid if doing an allowance.

Also, the vehicle allowance is taxed. So $700 will be more like $550.

Edit: saw your last update. $840 and .625/mile is kind of a no brainer to do that, imo.

We have something similar.
But since we had much more wear and tear on our trucks for work use, I didn't want to own something that I knew would get abused.

Ahhh
Just noticed your edited post above.

Ya, you have a rookie status and can't continue responding. Good idea on editing your last post to keep the conversation going.

Others….see the OP last post where they edited it added more info.


From OP last updated post.

EDIT TO ADD INFO SINCE I AM LOCKED OUT DUE TO ROOKIE STATUS

Southernskies:
Very true, but only if 100% of those 100,000 miles were business miles that I would submit.

A few more details that I just got confirmed.
The allowance is $10,080 per year. $840 a month. paid out biweekly as part of my normal paycheck.
This amount is considered taxable income. The current reimbursement rate is $0.625/mile


i have no idea how many miles I will truly drive (do about 4,000/month now), but I'm guessing it will be 1500-2,000 miles total and 30-50% of that would be for work in this new role.

So if I did 2,000 mile per month and 30% we business, that would be 600 business miles.
600 x 0.625 = $375 monthly mileage reimbursement.
$840 reimbursement post tax is closer to the $600 range post taxes

Well if you aren't going to driving that much I would say take the company vehicle. Gas/Insurance/Maintenance could easily run you $500/month if factoring work + personal travel. When factoring your $550 post tax allowance, that will probably eat up what you're spending on gas/insurance/maintenance. Your mileage reimbursable will not outpace vehicle depreciation if you choose to buy a truck.

Had a buddy who's coworker got the first company truck the boss had ever offered to anyone. The coworker was a mid 60's sales guy, the guy at every office it seems that has been there forever, is pretty set in his ways, and always speaks his mind whether it's a good idea or not.

Anyways, a few months later his boss gets an alert on his computer that the car is being driven 90 mph one day. He looks into it and finds out the salesman is just driving down 130, so not really speeding too much in the grand scheme of things.

But then he starts looking at his other trips, and realizes that the salesman is only working from like 11-3 every day and making up sales calls on his log.

Needless to say, the sales guy was fired.

Not saying you would be doing anything similar OP, but I detest the idea of a company having the ability to track me so closely, so I would take the allowance. I would find something with 20-30k miles on it, and try to pocket as much of the allowance as I could.

Yeah you definitely need to make sure they don't have trackers installed on their company trucks.

Depends how much you gotta drive for the company. If you're burning up the miles every month, burn up their truck. If it's only a couple thousand miles a month, then may make sense to drive what you want.

Surely they should be able to give you this info? I imagine they have an idea of how many miles the job requires?

You mentioned that the truck you'd get would be similar to what you'd buy yourself. In that instance I'd drive theirs. Especially if it's 4x4.

Also, any personal use or personal gas from a company vehicle is a taxable benefit, don't forget about that. Read IRS publication 15-B for all the fun details.

Got locked out!! Sorry about that

Corps ag
Ya that's the unknown I have. Not sure if most of my travel with be but plane on driving to other locations around Texas when meeting local. I'm assuming more will be by air. I think.

If it is by air, then I'd only foresee me expensing 200-400 miles per month for traveling to the airport.

I'd probably get end up getting something very similar to the one they would get my. And yes it's a 4x4. My hold up is the $600 post tax that I'd get reimbursed for would help me get equity in the truck over time.

$600 monthly over 5 years = $36,000.
Like someone mentioned earlier, the cheaper car you get, the quicker you can pay for it on their dime.

OP, I've had both. Had a company truck from '12 to '15, then switched jobs and now have $750 allowance.

One thing you may not have thought of, if you have company truck, when/if you get laid off or leave, you don't have a vehicle. That kinda sucked for me. Was laid off, and then had to figure something out. I borrowed a car from mother in law to job search.

Also, as mentioned above, companies can absolutely track a company vehicle. We did at my former employer.

I say get the allowance, put it all towards your payment plus another $300-$400 just like you would without the allowance. Pay it off fast, then save the allowance.

My allowance goes into a separate checking acct that is only for my truck. I don't look at it as income.

Just make sure you take out 20% to pay the taxes.

Also, not sure if you know, but your daily commute to an office and back is not considered reimbursable business mileage. Only mileage to clients, job sites, etc. So make sure you account for that in your analysis.

Thanks for your feedback.
Ya, good point about the inconvenience of a layoff and a vehicle.

Also, my work truck is being tracked now, but we are told it's just for braking and Acceleration, not that I truly believe it! I'm not too worried about tracking. I do my job and if I want to play hooky from time to time, I don't sweat it.

I currently work with the sales team I am about to join and their trucks are not track like mine. Don't think mine will be either, but you never know what could change!

Oh and it will be at a home office. No local office for 1,000+ miles.

Dex5511 said:

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Thanks for your feedback.
Ya, good point about the inconvenience of a layoff and a vehicle.

Also, my work truck is being tracked now, but we are told it's just for braking and Acceleration, not that I truly believe it! I'm not too worried about tracking. I do my job and if I want to play hooky from time to time, I don't sweat it.

I currently work with the sales team I am about to join and their trucks are not track like mine. Don't think mine will be either, but you never know what could change!

Oh and it will be at a home office. No local office for 1,000+ miles.

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oh something else about a company vehicle. If you happen to get in a wreck whether you hit someone or someone hit you if it's a company truck they can obviously do a drug test and if you have any bit of alcohol or in my case since I live in Colorado marijuana in your system that's obviously a problem.
Not so much with a personal vehicle.

I like using other people's money.

Get the company car.

62strat said:

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Dex5511 said:

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oh something else about a company vehicle. If you happen to get in a wreck whether you hit someone or someone hit you if it's a company truck they can obviously do a drug test and if you have any bit of alcohol or in my case since I live in Colorado marijuana in your system that's obviously a problem.
Not so much with a personal vehicle.

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Valid point. Thanks for bringing that up. Same thing with cell phones and accidents. If you're in an accident, first thing they do is pull your cell phone activity with a company car and check the usage activity.

birdman said:

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I like using other people's money.

Get the company car.

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Funny you say that. I said same thing to my wife. In my 15 years of driving someone else's truck, I have only totaled one when I hit a deer. It was nice when I realized it wasn't my financial problem to deal with the lose or insurance. Same with windshield repairs, tires every 12-18 months, oil changes and basically unlimited fuel allowance.

I need to adjust my expectations now honestly since I won't be a road warrior in this new position and look at the benefit of getting more equity in a car over 5-10 years. A big "what if" is the future of the auto industry. Buying a new car today sucks (wife just got one) and trying to guess what the value of a car will be in 5 years and if car lots will go back to pre covid buying model (big discounts off msrp) on is the post covid the way of the future?!

Everything's been covered, just giving my experience for reference. Been in a company car for 18 years. It was a blessing for the first 15 years while getting career moving to not have a car payment but now they can track movements, monitor speed (car literally beeps loudly if you go over 80), alcohol/drug test if you get in an accident (no matter how minor), if spouse gets in an accident, loses privilege to drive it. Ask me how I know.

I wish I could move to reimbursement! All that said, depends on your financial situation and life style.

Bummer. Hate to read about your spouse. That stinks!

We have the tracking device on our company trucks now and during my first trip down the Austin toll road going 85 mph, that sucker beeped many times! Got my threshold changed to 87, but I hate that feeling. They tell us it's only to monitor the acceleration and braking, but I don't buy it. Sure, I bet they could track employees with work phones, but the car tracking device doesn't sit well with most of our sales team.

Plot twist…
Spoke with my new manager (director of our business unit) and he said he allows his direct reports to claim mileage AND expense fuel when using the company vehicle allowance.

Now I'm really torn!

Dex5511 said:

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Plot twist…
Spoke with my new manager (director of our business unit) and he said he allows his direct reports to claim mileage AND expense fuel when using the company vehicle allowance.

Now I'm really torn!

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So you get 62.5/mile and they pay for your gas receipts? Surly I'm reading that wrong, but if not the allowance is a no brainer. Back when I did a lot of site visits I calculated my cost to operate my truck. Factoring in tires, fluids, car washes, and everything I could think of it cost me around 25/mile. Take gas out of it and I bet I would be down to 8-10/mile. I drove my truck all over texas for work and halfway paid for the truck with those miles.

Company truck. Everyday, twice on Sunday. ANYTHING goes wrong with mine I get a rental, put it in the shop with no price shopping and I'm not out a dime. Had a coworker rear ended in Kansas on his way to Amarillo. Fleet got him a rental and had his replacement truck by the end of the week (Pre Covid). He didn't even have to wait around with the truck once it was towed and inspected.

If I get laid off tomorrow I can go get a beater truck with cash vs being stuck with a massive truck payment I was paying with the allowance.

As I saw posted earlier our fleet manager has a "don't embarrass me" policy. Report some miles so it shows up, but don't go crazy reporting a bunch. I think everyone in my management group reports 6% personal miles. Best part is no gas payments, so road-trip that family vacation.

ETA: I currently do 50k miles a year and we request new vehicles between 70-100k. So I've been in 3 brand new trucks in the last 5 years.

coolerguy12 said:

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Dex5511 said:

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Plot twist…
Spoke with my new manager (director of our business unit) and he said he allows his direct reports to claim mileage AND expense fuel when using the company vehicle allowance.

Now I'm really torn!

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So you get 62.5/mile and they pay for your gas receipts? Surly I'm reading that wrong, but if not the allowance is a no brainer. Back when I did a lot of site visits I calculated my cost to operate my truck. Factoring in tires, fluids, car washes, and everything I could think of it cost me around 25/mile. Take gas out of it and I bet I would be down to 8-10/mile. I drove my truck all over texas for work and halfway paid for the truck with those miles.

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Oil change, new set of tires, depreciation, etc. You aren't going to get rich by getting reimbursed for driving your truck for work.

Depends on if you think short term or long term. I guess reimbursements might help you pay off a truck. And when that is done, you will have a used truck with a ton of miles on it.

fightingfar said:

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If I get laid off tomorrow I can go get a beater truck with cash vs being stuck with a massive truck payment I was paying with the allowance.

Best part is no gas payments, so road-trip that family vacation.

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While this is certainly true, you seem to say this as if owning a vehicle would leave you with no options.

If I got laid off tomorrow, I'd sell my 2021 powerboost, probably get $60-$65k, and only owe $45k, so I'd have plenty of new cash left over to to do what I wanted with, and not have to use a chunk of my reserve fund when I have no income. I could put a little down on a beater, and have left over cash that could potentially help during the time I have no income.


I experienced getting laid off with a company vehicle. Unless it's happened to you, you just don't know how much it sucks. You have to make logistical plans right away.. because life still goes on for spouse working and kids going to school. And in the immediate, you have to find a way to get home from wherever you are when they take your keys.
I was lucky, my boss lived close to me, so he let me drive the truck home and he came and got it that night. But every other employee I saw get let go, they're calling an uber or whatever. It's certainly deflating.

On your second statement, sure, no gas payments, but you gotta pay tax on your personal use. That isn't negligible, again, knowing that a commute to an office is not considered business miles. I was paying $100 or so a month in taxes when I had a company truck.

If you are reporting a 1500 mile road trip with the family as business mileage, then you are lying. Lots of things are easier and cheaper when you lie.

Seems like all the practical sides have been covered already, but since you asked for opinions, my take is I would take the allowance for the same reason I expense my business use of my personal phone instead of taking a company phone. In general I try to keep my company out of personal life as much as possible, and so when a device (phone or car) is going to be used for both, I would rather it be mine so they don't have control over it.

A story as an example, a bit over a year ago my company went through an IT migration where everyone got new computers and as part of switching to new email and Microsoft systems, the contract IT group was setting up your accounts on you mobile devices as part of the migration. Well I go in for my migration appointment and the guy tells me to install this specific app on my phone while he does my computer. He says it needs to be on it to put my company email and such on the phone, and its so that the company can wipe the email remotely in case of device loss or termination. Well I install the app and start setting it up and reading all the fine print, and as part of that i read that actually I am agreeing that they can wipe and/or brick the whole device, not just the email account. hard pass for me there. So i ask him about it, he knows nothing but gets his supervisor. I ask his supervisor who is the contract guy in charge of the migration and he is surprised. He said he knew that was a technical option, but when they started out with our internal IT department it had been discussed and they specifically told him they would not be using that option, but apparently changed it in their admin settings after the migration got started. Even better, it turned out that with this type of software, they could change their admin rights on any opted in devices at any time without any notifications being sent to the end users. So that's a strong no for me in ever giving my company controlling access over something that I use for personal use. I will either keep two devices (car, phone, etc) or I will have a personal one and expense my company use of it like I currently do with my phone. I like my boss, but I trust my company to have access to things like that about as much as I trust the government with the same.