Sorry if it's a silly question.......

mozzyc

Hi


My husband is going for a job interview that offers a car allowance. Right now he has a company car for the job he is in now - ie, we don't have our own car.

Question is, how does a car allowance work?
And can it be used to get a lease car instead of buying a car. And if he gets a lease car, does that usually cover road tax and servicing etc.?

Thanks for any input!

fengirl_2

A car allowance is either a lump sum or, more usually, a monthly amount designed to cover the cost of running a car for business. The allowance is taxable, but he can claim tax relief at 40p pm (25p over 10,000 miles) at the end of the year. The employer does not usually specify how the money is spent as long as there is a car available for business.

mozzyc

Thanks Fengirl!

scottn

It's just like an addition to salary and taxed as part of his normal salary, normally monthly. He can then use some or all of or more than the allowance to fund his own car, buy or lease etc. One thing to check will be what rules the company has e.g. that you should have a car less than 5 years old etc.
Also if he has a Company car currently, remember he will be handing it back, so he'll need a deposit of he decides to buy a car
Hope his interview goes great!

John_Pierpoint

Might be able to keep his existing car at a knock down price?
Does the leasing company really want it back?
Would the current company manage to replace him and give the new employee his second hand car?

mozzyc

John_Pierpoint wrote: »

Might be able to keep his existing car at a knock down price?
Does the leasing company really want it back?
Would the current company manage to replace him and give the new employee his second hand car?

Hi
the company he works at now has given him a company car, which he will have to hand back (to be honest, it's a pile of rubbish!!). But this new company only does car allowance, and no company car. And we don't have a car of our own. Plus as pointed out, we will need a deposit for a new car, but as you can see by my sig, we won't have a deposit available just yet.
So we were thinking of leasing a small but good car for the first year, whilst saving a deposit for the next year to buy a car.

We just weren't sure if you could lease a car using a car allowance? Or someone said that sometimes you can get the allowance paid in advance to enable you to buy a car if they know that you don't have a car and need one for the job? So will have to look into that too.

Thanks