Should I take a company car or a cash allowance?
The choice requires balancing the taxable benefits of a company vehicle against the reimbursement paperwork of a personal car. While accountants often recommend personal ownership to avoid tax scrutiny over personal use, people struggle to see the advantage. Many fear that keeping their own vehicle and tracking mileage will actually create more administrative work and tax questions, rather than fewer.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
Found another way around this?
Share your steps and trade-offs so fellow engineers don't have to reinvent the wheel. No account required.
- 1Modeling tax costs using the IRS Annual Lease Value (ALV) methodDid this help you?
- 2Comparing average annual costs over three years including gas and insuranceDid this help you?
- 3Considering keeping both cars if space permitsDid this help you?
- 4Purchasing the vehicle personally and claiming tax-free mileage reimbursement from the corporation.Did this help you?
- 5Paying a standby charge personal income inclusion on company-owned vehicle personal use.Did this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“My accountant is recommending that I get away from having a company-owned vehicle altogether. Instead, he suggests purchasing the next truck personally and having the corporation reimburse me for business kilometres driven.”source ↗
“His main concern seems to be CRA scrutiny surrounding company-owned vehicles and personal-use taxable benefits.”source ↗
“However, I'm having a hard time understanding why this would be the better option in my particular situation.”source ↗
“I also feel like personally purchasing a $60,000+ truck and then submitting mileage reimbursements to my own corporation creates additional paperwork and potentially more questions from CRA, rather than fewer.”source ↗
“I’m trying to figure out whether I should: 1. Take the company vehicle and sell my current Corolla. 2. Keep my paid-off Corolla and ask whether the company would consider giving me a cash/car allowance instead”source ↗
“Does ~,$5,000/year sound like a reasonable amount to ask for instead of the company vehicle?”source ↗
Where this came up
People with this problem also raised
- 9Should I pay cash for a car or finance it?
- 8How to choose between two cars within budget
- 3Should I take car dealer financing for a rebate and pay it off early?
- 4How do you figure out a reasonable car purchase price?
- 57Is it a smart idea to buy a new car right now?
- 8Why are even old used cars so expensive now?