Car allowance newbie needs your help!
Discussion
Guys I need your help if possible. I apologize if I ask stupid questions, I am used to company cars so this "allowance" is new to me.
I've been offered a new job. On top of my basic wage I will receive €1,000 into my bank account every month from the day of employment to use for travelling expenses or maintenance of my own personal vehicle. However, my current personal vehicle is not suitable or professional enough for business purposes, therefore I am forced to purchase a second vehicle. As I have been out of work for a while now, I cannot afford to go straight out and buy a second vehicle. Therefore, I looked into leasing a vehicle and have rang around for a few quotations. After speaking to a few companies, I have discovered that the down payment required for me to start a lease plan is also excessive and out of my budget reach. Therefore, I am now in a situation where I cannot purchase a second vehicle nor lease a second vehicle. On top of that, if I did manage to purchase a second vehicle, I would not be able to ensure it anyway, as I already have my own personal vehicle insured, therefore my no claims bonus is being used up on that vehicle.
I've been offered a new job. On top of my basic wage I will receive €1,000 into my bank account every month from the day of employment to use for travelling expenses or maintenance of my own personal vehicle. However, my current personal vehicle is not suitable or professional enough for business purposes, therefore I am forced to purchase a second vehicle. As I have been out of work for a while now, I cannot afford to go straight out and buy a second vehicle. Therefore, I looked into leasing a vehicle and have rang around for a few quotations. After speaking to a few companies, I have discovered that the down payment required for me to start a lease plan is also excessive and out of my budget reach. Therefore, I am now in a situation where I cannot purchase a second vehicle nor lease a second vehicle. On top of that, if I did manage to purchase a second vehicle, I would not be able to ensure it anyway, as I already have my own personal vehicle insured, therefore my no claims bonus is being used up on that vehicle.
What's the nature of your work (i.e. do you need to use the car to travel to client sites, or the office?) If it's very infrequent (which most office jobs are at the moment), why not just hire a car for the day or days, and turn up in that? This would buy you some time to save for a few months and then get yourself a lease or used car if you need to at all.
Does your work say you have to spend the allowance on a car at all? I've often had a car allowance and just treated it as part of salary and nobodt cared what car you turned up in, despite there being a "policy".
But one place I worked sounds a bit like yours, it had to be a "german" (or something the boss thought was suitable) car no older than 3 yrs, which was a bit awkward if you drove a Honda S2000, though a poverty spec Skoda Octavia was an acceptable alternative.
Does your work say you have to spend the allowance on a car at all? I've often had a car allowance and just treated it as part of salary and nobodt cared what car you turned up in, despite there being a "policy".
But one place I worked sounds a bit like yours, it had to be a "german" (or something the boss thought was suitable) car no older than 3 yrs, which was a bit awkward if you drove a Honda S2000, though a poverty spec Skoda Octavia was an acceptable alternative.
prand said:
What's the nature of your work (i.e. do you need to use the car to travel to client sites, or the office?) If it's very infrequent (which most office jobs are at the moment), why not just hire a car for the day or days, and turn up in that? This would buy you some time to save for a few months and then get yourself a lease or used car if you need to at all.
It's a sales executive job for a security company. The job would involve office meetings and meeting existing clients, plus travelling to find new business. The long term rental could be a good idea, thank you!
Does your work say you have to spend the allowance on a car at all? I've often had a car allowance and just treated it as part of salary and nobodt cared what car you turned up in, despite there being a "policy".
In his own words during the interview, "we deposit the grand into your account every month seperate to your wage, meaning it's untaxed. Do with it as you see fit, as long as you have a suitable vehicle for the role."
But one place I worked sounds a bit like yours, it had to be a "german" (or something the boss thought was suitable) car no older than 3 yrs, which was a bit awkward if you drove a Honda S2000, though a poverty spec Skoda Octavia was an acceptable alternative.
I don't think they are too fussy in the car, I was told in the interview how another recently added employee used his allowance to purchase a 2010 Audi A4. However I don't think my Turbocharged Euro R is seen as suitable
However as I said, the problem there is insuring it. Even if I did find a cheap and suitable second hand car like an Audi A4 etc, I wouldn't be able to insure it. Ireland doesn't really do multi car policies meaning my NCB is stuck with my Euro R.
It's a sales executive job for a security company. The job would involve office meetings and meeting existing clients, plus travelling to find new business. The long term rental could be a good idea, thank you!
Does your work say you have to spend the allowance on a car at all? I've often had a car allowance and just treated it as part of salary and nobodt cared what car you turned up in, despite there being a "policy".
In his own words during the interview, "we deposit the grand into your account every month seperate to your wage, meaning it's untaxed. Do with it as you see fit, as long as you have a suitable vehicle for the role."
But one place I worked sounds a bit like yours, it had to be a "german" (or something the boss thought was suitable) car no older than 3 yrs, which was a bit awkward if you drove a Honda S2000, though a poverty spec Skoda Octavia was an acceptable alternative.
I don't think they are too fussy in the car, I was told in the interview how another recently added employee used his allowance to purchase a 2010 Audi A4. However I don't think my Turbocharged Euro R is seen as suitable
However as I said, the problem there is insuring it. Even if I did find a cheap and suitable second hand car like an Audi A4 etc, I wouldn't be able to insure it. Ireland doesn't really do multi car policies meaning my NCB is stuck with my Euro R.Many things may be different in the Republic of Ireland to how things work over here in the UK, but make sure what's happening is above board. Our tax authorities would (probably) take a dim view of a chunk of cash landing with no tax each month into my account, for example, but may be completely normal in the RoI.
Is it possible to take over leases in the RoI. I've never done it here, but there seems to be a market for transferring leases between people. This may be useful for you, as there may be no upfront payment like there might be on a 6+23 lease deal, for example.
Is it possible to take over leases in the RoI. I've never done it here, but there seems to be a market for transferring leases between people. This may be useful for you, as there may be no upfront payment like there might be on a 6+23 lease deal, for example.
HMRC would frown at the very dodgy sounding separate deposit. Your tax authority may well be different.
Hugely agree about the rental to get you going, means you have a smart reliable car to go around in. Go as cheap as you are comfortable with on the car model though, a) to build up savings and b) until you are secure in the position, you don't want to be in any way out of pocket.
Hugely agree about the rental to get you going, means you have a smart reliable car to go around in. Go as cheap as you are comfortable with on the car model though, a) to build up savings and b) until you are secure in the position, you don't want to be in any way out of pocket.
Thank you for your suggestions guys.
Regarding the tax situation, I'm really not sure what the situation is over here in the republic compared to the UK. I'll have to do some more research.
I've investigated long term rentals, with the likes of Enterprise and Hertz and many others. Unfortunately, they either require huge upfront costs or simply cannot offer it to a private individual. For example, Europcar wanted 980 euro every month for a Golf or equivalent. This price includes all running costs, maintenance, insurance etc, and is a rolling month to month contract. However, they want 2 months deposit to be given up front before starting, which is simply not feasible.
I've also looked into car loans, to get myself a half decent second hand car. I applied for a 5 grand loan, but have been denied due to my credit score. It's not that I have a bad score, simply just no credit built up. I've never taken out a loan (mortgage is in my partners name) or anything of the sort and have simply lived within my means my entire life, which whilst means I'm debt free also means I don't have a good credit rating. Before Covid hit, I had a substantial amount of money saved, however my savings are nearly gone after a year and a half of unemployment due to covid. I've still had to help pay the bills etc with my partner.
Kind of stuck what to do now if I'm honest. I'd hate to have to sell my Euro R but I suppose needs must if it means I can get the job. That however does also make me hesitant to even get a lease or loan if I was let go from the job at some point and then be stuck with the repayments, as mentioned above.
Regarding the tax situation, I'm really not sure what the situation is over here in the republic compared to the UK. I'll have to do some more research.
I've investigated long term rentals, with the likes of Enterprise and Hertz and many others. Unfortunately, they either require huge upfront costs or simply cannot offer it to a private individual. For example, Europcar wanted 980 euro every month for a Golf or equivalent. This price includes all running costs, maintenance, insurance etc, and is a rolling month to month contract. However, they want 2 months deposit to be given up front before starting, which is simply not feasible.
I've also looked into car loans, to get myself a half decent second hand car. I applied for a 5 grand loan, but have been denied due to my credit score. It's not that I have a bad score, simply just no credit built up. I've never taken out a loan (mortgage is in my partners name) or anything of the sort and have simply lived within my means my entire life, which whilst means I'm debt free also means I don't have a good credit rating. Before Covid hit, I had a substantial amount of money saved, however my savings are nearly gone after a year and a half of unemployment due to covid. I've still had to help pay the bills etc with my partner.
Kind of stuck what to do now if I'm honest. I'd hate to have to sell my Euro R but I suppose needs must if it means I can get the job. That however does also make me hesitant to even get a lease or loan if I was let go from the job at some point and then be stuck with the repayments, as mentioned above.
Do you have a probationary period (3 months for example)? I wouldn't be committing to a lease or purchase until I knew I'd passed that and was staying with the business. I would hope your new employer also understands that, along with your situation and thus gives you some leeway in sourcing a new vehicle.
I need to finalize some details at the moment but yes I believe their would be a probationary period.
I suppose I'll have to chat to him and see what he would like to do. I'm more than happy to give up the grand a month and let him source a company car, as long as it is something decent. This whole situation has made me realize just how much of a necessary evil it is to get yourself into debt so that you can build a credit score.
I suppose I'll have to chat to him and see what he would like to do. I'm more than happy to give up the grand a month and let him source a company car, as long as it is something decent. This whole situation has made me realize just how much of a necessary evil it is to get yourself into debt so that you can build a credit score.
edc said:
You don't need to be in debt to have a good credit rating, quite the opposite. Get a credit card and pay in full on time every time if you have the cash.
That's true. Apologies, I've just never really looked up the idea of getting a credit card or loans etc. I've always simply saved and paid for everything outright, just the way I was brought up I suppose.NateWM said:
That's true. Apologies, I've just never really looked up the idea of getting a credit card or loans etc. I've always simply saved and paid for everything outright, just the way I was brought up I suppose.
Me too (mostly), but I still use credit cards for most things, paid off every month. You get additional purchase protection, and mine give cash or vouchers back.Bac on topic, could you ask the prospective employer if you're OK to use your current car until you've built up a deposit for a lease?
NateWM said:
prand said:
What's the nature of your work (i.e. do you need to use the car to travel to client sites, or the office?) If it's very infrequent (which most office jobs are at the moment), why not just hire a car for the day or days, and turn up in that? This would buy you some time to save for a few months and then get yourself a lease or used car if you need to at all.
It's a sales executive job for a security company. The job would involve office meetings and meeting existing clients, plus travelling to find new business. The long term rental could be a good idea, thank you!
Does your work say you have to spend the allowance on a car at all? I've often had a car allowance and just treated it as part of salary and nobodt cared what car you turned up in, despite there being a "policy".
In his own words during the interview, "we deposit the grand into your account every month seperate to your wage, meaning it's untaxed. Do with it as you see fit, as long as you have a suitable vehicle for the role."
But one place I worked sounds a bit like yours, it had to be a "german" (or something the boss thought was suitable) car no older than 3 yrs, which was a bit awkward if you drove a Honda S2000, though a poverty spec Skoda Octavia was an acceptable alternative.
I don't think they are too fussy in the car, I was told in the interview how another recently added employee used his allowance to purchase a 2010 Audi A4. However I don't think my Turbocharged Euro R is seen as suitable However as I said, the problem there is insuring it. Even if I did find a cheap and suitable second hand car like an Audi A4 etc, I wouldn't be able to insure it. Ireland doesn't really do multi car policies meaning my NCB is stuck with my Euro R.
It's a sales executive job for a security company. The job would involve office meetings and meeting existing clients, plus travelling to find new business. The long term rental could be a good idea, thank you!
Does your work say you have to spend the allowance on a car at all? I've often had a car allowance and just treated it as part of salary and nobodt cared what car you turned up in, despite there being a "policy".
In his own words during the interview, "we deposit the grand into your account every month seperate to your wage, meaning it's untaxed. Do with it as you see fit, as long as you have a suitable vehicle for the role."
But one place I worked sounds a bit like yours, it had to be a "german" (or something the boss thought was suitable) car no older than 3 yrs, which was a bit awkward if you drove a Honda S2000, though a poverty spec Skoda Octavia was an acceptable alternative.
I don't think they are too fussy in the car, I was told in the interview how another recently added employee used his allowance to purchase a 2010 Audi A4. However I don't think my Turbocharged Euro R is seen as suitable
However as I said, the problem there is insuring it. Even if I did find a cheap and suitable second hand car like an Audi A4 etc, I wouldn't be able to insure it. Ireland doesn't really do multi car policies meaning my NCB is stuck with my Euro R.They can't deposit you a grand tax free, if they are they are setting themselves and you up for a lot of trouble with HMRC , and it's easy to trace.
Car allowances are taxable and can impact your tax codes (In the UK, I read you're in Ireland so not sure if the law is different there)
Not sure about what happens in Ireland but in the UK you still can only have 1 set of NCB on one car but most insurers will unofficially "mirror" this (acknowledge you have some additional no claims on another policy)
If I were you I'd look into buying a £6-8k 2008-2012 saloon, something like a Skoda Octavia, Merc C/E class or BMW
Most of the reasonable spec middle range diesel and petrol engines should be available for this sort of cost
Although personally I find the idea of "having a suitable car" pretty restrictive.
I think most people tend to only have 1 car and "forcing" you into a car that the "company" thinks is right is a big step over the business/personal relationship line - and if you are expected to have a car of specific use, they should be providing you one.
Instead of giving you £1k a month can't they lease/rent/buy a car for you instead?
If it makes you feel any better I was a senior manager in IT, and I don't see an Accord Euro R as an unprofessional car so you could see how it goes and just take the grand a month for now until someone says something??
Edited by CarCrazyDad on Saturday 29th May 19:48
Harpoon said:
Do you have a probationary period (3 months for example)? I wouldn't be committing to a lease or purchase until I knew I'd passed that and was staying with the business. I would hope your new employer also understands that, along with your situation and thus gives you some leeway in sourcing a new vehicle.
This as well !! Excellent point Harpoon.I would be mentioning that for the probation period you will not be purchasing any additional vehicles , but you could perhaps agree to source one within 30 days of the end of your probationary period.
CarCrazyDad said:
Although personally I find the idea of "having a suitable car" pretty restrictive.
My contract says I have to have (and use) "an appropriate vehicle" when visiting customers.The MD is fine with me using either my mud-encrusted Golf Alltrack or my Alpine. The main concern seems to be reliability - as long as I always turn ip on time everything's fine.
Thank you for all the replies, I will try my best to cover any queries.
In regards to the tax query and if it is legal or not, I'm really not sure. As said, I am in Ireland so it's entirely possible that it is indeed above board and "normal". I'd be lying if I said I haven't seen stranger laws over here compared to the UK! However, I will be talking to an accountant friend tomorrow to clarify on this.
I agree with the point made about being wary of a lease when in probation, and it is a point I shall be raising with them. I haven't clarified with them whether my Euro R can be used, but I will absolutely not be surprised if he said no as it is rather loud and obnoxious. The main issue is that even if I did purchase a second vehicle of my own, I wouldn't even be able to insure it as my NCB is being used on the Euro R. I have rang my insurers and asked them whether I could hypothetically insure a second car and mirror my NCB, but they refused. They even went as far as to say it would technically be a business policy that I need if I am using the vehicle to visit clients. I also looked into insuring the Honda on a classic policy, but Ireland currently has a hatred for anything remotely sporty or imported, so getting a quote has been impossible. I have found a few nice cars for around 400 to 500 p/m on a lease or finance, so I am considering asking my potential new employer if they can simply use the €1000 they were willing to give me as an allowance and instead use it to pay for a suitable car and insure it for me.
As for long term rentals, I've had a very hard time even explaining what I was looking for with the likes of Enterprise and such...One absolute waste of space in Enterprise even told me they don't do long term rentals, and still flat out refused this fact when I pointed out the statement on their website saying otherwise! Regardless, I did get through to a few companies and they either want a large deposit (2 to 3 months upfront) or warned me that the process can take 4 to 6 weeks to start as they need to set me up with an account....Either way, it's been incredibly frustrating.
All I can do now is wait until my next meeting with my potential employer and seek some advice on how to go about it. Even if I was allowed to use my Euro R, I don't really want to as it's simply not suitable for a 2 and a half hour commute every day in gridlock traffic, it's a toy. If I was to somehow purchase/lease/rent my own vehicle, this is also an issue as I cannot afford the large upfront cost to do this and would also be hesitant to do so anyway whilst in probation, as raised by some of you above.
I think realistically, the only solution is for them to "keep" the grand a month and instead use that to lease a vehicle for me.
In regards to the tax query and if it is legal or not, I'm really not sure. As said, I am in Ireland so it's entirely possible that it is indeed above board and "normal". I'd be lying if I said I haven't seen stranger laws over here compared to the UK! However, I will be talking to an accountant friend tomorrow to clarify on this.
I agree with the point made about being wary of a lease when in probation, and it is a point I shall be raising with them. I haven't clarified with them whether my Euro R can be used, but I will absolutely not be surprised if he said no as it is rather loud and obnoxious. The main issue is that even if I did purchase a second vehicle of my own, I wouldn't even be able to insure it as my NCB is being used on the Euro R. I have rang my insurers and asked them whether I could hypothetically insure a second car and mirror my NCB, but they refused. They even went as far as to say it would technically be a business policy that I need if I am using the vehicle to visit clients. I also looked into insuring the Honda on a classic policy, but Ireland currently has a hatred for anything remotely sporty or imported, so getting a quote has been impossible. I have found a few nice cars for around 400 to 500 p/m on a lease or finance, so I am considering asking my potential new employer if they can simply use the €1000 they were willing to give me as an allowance and instead use it to pay for a suitable car and insure it for me.
As for long term rentals, I've had a very hard time even explaining what I was looking for with the likes of Enterprise and such...One absolute waste of space in Enterprise even told me they don't do long term rentals, and still flat out refused this fact when I pointed out the statement on their website saying otherwise! Regardless, I did get through to a few companies and they either want a large deposit (2 to 3 months upfront) or warned me that the process can take 4 to 6 weeks to start as they need to set me up with an account....Either way, it's been incredibly frustrating.
All I can do now is wait until my next meeting with my potential employer and seek some advice on how to go about it. Even if I was allowed to use my Euro R, I don't really want to as it's simply not suitable for a 2 and a half hour commute every day in gridlock traffic, it's a toy. If I was to somehow purchase/lease/rent my own vehicle, this is also an issue as I cannot afford the large upfront cost to do this and would also be hesitant to do so anyway whilst in probation, as raised by some of you above.
I think realistically, the only solution is for them to "keep" the grand a month and instead use that to lease a vehicle for me.
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