[Closed] Do you need to spend a car allowance on a car?

An Car Allowance should be just that - it should be up to you what you do with it.

However, check that your role (or policies) do not require that you have access to a vehicle at all times or that there are rules in place regarding the age of any vehicle you are using for company business.

Yes, but there's often a stipulation or two about the age and type of the car. There is in my scheme, but it's widely ignored and never checked.

You can spend as little or much as you want to, although there may be 'local' rules.

FWIW I got £8.5k pa in my last perm role, and spent £2k on a car.

Yes, but there's often a stipulation or two about the age and type of the car. There is in my scheme, but it's widely ignored and never checked.

That's about the size of it. An allowance will be given (presumably because you need a car) to buy a car and the company will stipulate requirements. Ie, they don't want you to turn up at a customer's site in a Ferrari or a Lada Riva.

That said, how keenly they police it will depend entirely on the company in question.

As comments above it will depend on the individual company policy.

Mileage, age and type restrictions (no 2 seaters, camper vans etc) often apply.

My current company just require a properly insured car to be available and people here seem to treat it more as a bonus (or gesture towards a pretty basic pension scheme).

A mate has got it for years and can't even drive - purely used to top up salary (and always taxed as such anyway).

When I've had it, I've needed to run something <5y old, need to insure it for business mileage, and need to submit documentation for it. I've known people have even more stringent requirements including CO2 limits and 4/5 doors.

Ours is, diesel, no 2-seaters, no convertibles, no 4x4s, and less than (age?) - 4 years old, I think.

Ours has a restriction on horsepower, must have more than 2 doors, can't be more than 5 years old and must be present at the office. So you can't buy a nice car but cycle to work.
Some of the job roles require that you have a chip in your car and turn it in every month to prove you are a safe driver.....
If you violate the rules then they take back the allowance and a % (up to 100) of what has already been paid to you.

If you don't see it as a perk then take that into account in any negotiations regarding the role.

All down to companies T's & C's...I had a 7 year old car that owed me nothing...took the allowance and ran! All my T's & C's stated was the car must be kept legal and roadworthy, I was obliged to prove MOT/Tax and appropriate business insurance. Cars a bit clapped now so have sold it and had a New Golf GTD te allowance would not ce close to running one of them let alone the capital expenditure!! 🙂

In my last job everyone on that salary banding got a car allowance or company car (your choice), whether they needed a car for work or not - and nobody drove to work because we were based in central London with no parking. I needed a car for my particular role and drove an old 306XSi and when that died replaced it with an ex-demo Civic Type-S. Worked out so much better financially than taking a company car, especially with 40p/mile rather than 12p/mile, plus it was fun, fast, practical and totally reliable - and that was with taking out a £10k loan to buy the Civic!

I have a car allowance and on the rare occasions I need a car for work (once last year I think) I just hire one.

i turned down the car allowance at my place for reasons above - similar rules to cougar.

To meet the rules stipulated and checked i would have been severely out of pocket.

I get my 40p per mile for using my own car and pay the 12 quid to put business use on it and im STILL miles better off... expecially as i very rarely have requirement to drive and no ambition of have a subsidized rented(leased) audi on the drive.

So i would do your sums carefully if they do have rules that they abide by - for me it was a no brainer ... i spend as little as possible on cars a year .... usually in the region of 1k in repairs for 3 cars...... and one of them is a 30 year old land rover !

must have more than 2 doors,

Ah, that's the one - it's not a seat restriction, it's a door restriction, I misremembered.

I used to have an allowance, and was taking my £220 per month and chucking it into the holiday fund and driving a 10 year old Passat.

The boss had a quiet word and we bought the nearly new Touran.

I left 6 months later. 😕

I used to have an allowance, and was taking my £220 per month and chucking it into the holiday fund and driving a 10 year old Passat.

Where I am now, the car scheme is part of my job so I can set the rules. As long as it is serviced, tested, can seat 4 and got NCAP 5 star, that seems enough.

I've always had age restrictions on the vehicle, both places it had to be less than 7 years old. Needed to be approved as suitable but that was never really an issue, taxed, mot'd and insured for business use and with breakdown cover. The current place has CO2 emissions bands so my car has to fall under 120g/km. At the old place I could have an older vehicle but the payment was halved.

Ours doesn't specify anything other than you need a decent car to turn up to clients in. No bangers*. We also have no requirement to actually use it, I can take the train or cycle everywhere if I want. I have to buy my own fuel, insurance and everything. I only get 40p/mile back up to something like 5k miles though, it drops to 21p after that, based on my engine size. But fuel usually only costs me under 10p/mile though so I still make some extra to pay for car running.

It's part of our flexible benefit scheme, and I think everywhere I've worked has this. If you don't take whatever it is (health, pension, dental etc) you get the cash value as salary. The car is by far the biggest chunk of this though after pension.

The money serviced the loan on the car I already had, and covered insurance, so when the loan was paid of I pocketed the cash. And then spent it on ECUs.

* little do they know about the Passat..