Should I get company car vs mileage and whay type of vehicle for lots of highway and some offroad?
Hi, and thanks for any input. I stare at this stuff too long and need some input. I'll try to make it short....
I have the decision to get a company truck with no expense to me or get mileage reimbursement at $.50/mile on a personal vehicle. Here's the issue...I drive a lot of miles per year (approx. 40,000) and almost all is highway mileage except I do have to go off road occasionally and when I do I really have to. So basically I need 4X4 with pretty good mpg. So what would you do? With that kind of mileage and use the depreciation is huge whats your thoughts?
4 Answers
I would consider the fact that the Company Truck carries insurance but if you use your truck and have an accident your insurance probably won't pay if you use your truck for business
Take the truck. 0.50 a mile will not even come close to covering the cost of operating a new F150.
The .50/mile is great until you put 50,000 miles on and a few scratches and the depreciation drops like a rock. The big problem is can the reimbursement catch up with the depreciation? Thanks
Things to consider: If you choose to use your own vehicle you can go the mileage route at .50 per or go the expense route with depreciation, but not both. Expense route: If you own your vehicle, you will have to notify your insurance company and the premium will increase. Your employer may also mandate you carry a certain level of coverage (deductible yearly from taxes as a business) All your gas, lube, tires, etc repairs will be deductible each year as a business expense. If memory serves, if a new vehicle is put in service in the latter part of they year (unknown date) you may be able to depreciate the vehicle as much as 40 percent the first year. On a 50K dollar vehicle, that could be as much at 20K deduction on business expense. You should check with a tax professional or IRS publications relative to vehicle deductions. If you trade in the vehicle after a certain period of time, there are tax ramifications associated associated with the value of the vehicle traded in. Mileage route: If you drive your vehicle 40K a year and take the .50 cents per mile, you only get a 20K a year payment toward the use of your vehicle, not taxable, and that is it. No deductions for gas, insurance, etc. Look at it this way. If you get 20 mpg in the new vehicle and gas is 2.50 a gallon, you get ten bucks for every 20 miles driven.going the mileage route. That leaves 7.50 cents for every ten miles for every other expense.
