Company got a new CFO and they changed the vehicle policy.....

[John105]

My last job was for a company that won the "10 best employers" award numerous times. There were a lot of folks (still a few) there from the 90s.

There was a management switch around 2017 that wasn't great. A lot of folks kept trying to ride it out. It just kept getting worse and worse. Finally in 2022/2023, they started shedding a lot of tenured people. And they often took their business with them! I finally jumped ship earlier this year after it just became unbearable for me.

I was demoted (yet given a bunch of engineering work?).
Then I was accused of damaging company property - even though there were witnesses claiming I was not responsible. Eventually it was discovered that it wans't me. But it was strange how management jumped on me .

There was writing on the wall. I got out of there soon.

Thanks for sharing, it seems “bizarre” to do that to decent tenured hard working people. But I’ve seen my employer grow from 700 mil to 6 bil and I’ve experienced the changes. And with the growth the “family” owned business mentality is gone.

My job was eliminated 2015 and I was put into a brand new role of which I had little experience. Given a new title and same pay. I was able to figure it out until 2019 when my role changed again.

One could say that was nice of my employer to let me have a salary commensurate with 19 years experience, at a role with zero. I don’t believe in luck, but I do believe in fate. Next time, I don’t think it will be as fortunate for me. But, we do have people with 50/40/30/20 year tenure in my building.

I do agree with the thinking to look over the 3 options, but also see what else is out there. Be realistic, this shouldn’t be the factor that breaks the camel’s proverbial back. Just be on alert…

 

[Bighorn2500]

At least you get options, I only have option #3 and typically see 10k-12k a year for work alone.

 

[sluggo]

I was in a very similar situation a few years ago. I travel extensively for my job, but the majority of my travel is via air. I have some "local" visits that I drive to, but they are the minority. Many of my auto trips are to the airport. The people in my department never paid directly for a car, but we paid income tax (taxable fringe benefit) based on the percentage of personal miles and the total car costs. For example, if the car cost the company $10,000 per year and my percentage of personal use was 30% of the total mileage driven, I would pay income tax on $3,000. We didn't directly pay a per mile fee for personal use, but increasing our personal use increased our % and resulted in greater taxes. It was a good deal. We were not allowed to take the car on "long" personal trips unless it was in conjunction with a business trip.

That all changed a few years ago. They started charging us $50 per bi-weekly paycheck ($1,300/year) for the use of the car, even if it was not used for personal use. We still paid the same taxable fringe benefit on top of the $1,300 per year. The year before they instituted this change, I had used the car for a total of only 300 miles. If that mileage rate stayed the same I would be paying $4.3 per mile for use of the car! Not something I wanted to continue with. I dropped the company car and accepted a $3,500 buyout bonus and started using my own car at the IRS rate/mile. I already had an extra car, so I didn't need to purchase one. The mileage rate really adds up in reimbursement. The company also pays for any tolls and parking fees incurred. Most of my trips are roughly 100-150 miles roundtrip. If the drive is longer than 150 miles, I am required to rent a car. Enterprise picks me up and drops me off at home when the trip is done.

Overall, I am happy with my decision. The car the company provided (bottom line Ford Fusion) was OK, but not something I would have chosen. If I could have picked something more useful, such as an AWD SUV or minivan or pickup truck, I may have been willing to stay in the program. But paying $1300/year +taxes for a car I didn't want and didn't use really rubbed me the wrong way.

Run the numbers for your situation and see what works best for you. See if there is a bonus if you drop the car.

Good luck.

 

[Urshurak776]

Do you like it?

Not a big fan. Brake pads awful (worst I have ever had.) The dust, dear God, the dust. Squeals, dear God, the squeals.

Had 7, yes, SEVEN, recalls before 10K. Two of which were on brakes. A couple were fire, death and destruction (literally fire.....)

 

[SwampSurvivor]

I'm very sorry this happened to you.Hope everything has been positive going forward.

The new job is exactly where I need to be. And the 35% raise isn't too bad either

 

[Urshurak776]

Sorry all I had this in wrong forum. I had it in vehicles because I need to get one and was going to solicite recommendations.

 

[KrisZ]

I never had a company vehicle. How does it work tax wise? Does the company cost per mile add to the overall income or is it something else on the paystub?

 

[Pew]

Holy crud that's going to be annoying! I already see the resentment that will start. My company will assign company vehicles to most of the field staff; basic maintenance and gas is reimbursed and insurance and major repairs is already covered. Otherwise, $0.67/mile for those who use personal cars.

I would choose #2 , then #3, and #1 as a last resort.

I never had a company vehicle. How does it work tax wise? Does the company cost per mile add to the overall income or is it something else on the paystub?

If the employee has to pay out of pocket, it is expensed as an employee expense and non-taxed as the employees have already paid the taxes.

 

[Dave Hess]

It was $110 a paycheck, so $220 month (updated original post, I should have been clearer on that. Sorry.)

I would say a quarter of my miles are outside the radius. Maybe a little more. Closer to 30% probably.

I haven't looked into insurance pricing yet, or a vehicle. I will need to get something (lease, buy new, buy used, etc.) Not sure yet. At all times if you're within the program, vehicle must be newer than 7 years old......

Maybe look for another job with a company vehicle provided.

 

[KrisZ]

If the employee has to pay out of pocket, it is expensed as an employee expense and non-taxed as the employees have already paid the taxes.

I get that, but if they pay you a certain amount/mile, then that's not an expense.

 

[Pew]

I get that, but if they pay you a certain amount/mile, then that's not an expense.

The mileage reimbursement is also non-taxed as long as it's not over the IRS reimbursement amount; 2024 is $.67/mile. Any amount reimbursed more than $.67/mile must be taxed.

 

[DuckRyder]

I'm not an expert, but do have a company provided vehicle, so i have a rough idea how it works. I also know someone who works under option 2 but they get more money upfront.

There are very specific rules the IRS has about it or more specifically personal mileage as a benefit. Any personal mileage over what's considered incidental is "extended" and chargeable at a higher rate (the .67 per mile IIRC)

My first question is are you SURE the 250 mile limit is for business miles and not incidental personal miles? Because it's dumb particularly in the case of scenario 1, i can somewhat see it in scenario 2 or 3 but it makes little sense to provide a company vehicle and then limit its business use.

Scenario one sounds like a scheme to charge you for personal miles without actually tracking them. It's easier than tracking each employees personal use and reporting the value as income. I would hazard a guess as long as you can avoid any penalty its the best deal.

In scenario 2 and 3 they've made it your vehicle and are buying back the use, i have no doubt that's an IRS approved scheme for them to reimburse for business use of a personal auto. Also before you decide you need to see what the insurance impact is going to be because i suspect you're going to need a business use endorsement and maybe a use of non owned cars for business.

I'm assuming they are paying for the rentals? what happens if YOUR (2,3) car breaks down on a trip? Do you then have to rent a car at YOUR expense and pay for the hotels? What happens if YOUR car breaks down and you cant report to your assigned work location?

Kris: the mileage paid at the IRS rate isn't income if the company is reimbursing for use of a personal vehicle.

At least that's my understanding and some questions i would be asking.

 

[loneryder]

So, my company has changed direction on our company vehicle policy.

Current: Salaried employees pay $110 a paycheck ($220/month) and we get a vehicle (Currently have a Ford Escape.) Company pays gas, insurance, maintenance, everything. As long as we get our required business miles in (15K a year) all is good. We have to keep a log of our business miles.

Now: You have 3 choices:

1st: Stay in program, at an increase of $85 or so a month. BUT, you can't drive more than 250 miles from your office/home location. So, if I have to drive somewhere that is 275 miles away (I am a field engineer and we drive all over the place, I typically put on 20K plus a year) we have to park our car and get a rental......

2nd: If you drive 7500-15K a year, you can provide your own vehicle (must be newer than 7 years old.) Company will give you $400/month plus a $.2075 per business mile. They will use an APP to track your mileage in real time (before we kept our own log and reported mileage monthly.) Insurance, maintenance, gas, etc. are on our own (that's where the .20 mile comes in.) This is somewhat desirbale as I keep the $220 month I am paying now, plus the $400 from company every month, plus the .20 mile.

3rd: You can provide your own vehicle, no money from company, but you get $.67 mile.

All scenarios, you have to get a rental car if the trip is over 250 miles.


Company sent an offer to us to buy our current company car, at fair market value. Yet, everyone in my group, the offer was $2K ABOVE blue book....

I may go with option 2, but not sure yet. Plus, I will need to get a vehicle. No idea what yet. Lease? Buy? Get a 2 year old used vehicle? Etc....

Anyone ever faced this type of thing?

Do they expect you to fly if over 250 miles??

 

[Dave Hess]

The mileage reimbursement is also non-taxed as long as it's not over the IRS reimbursement amount; 2024 is $.67/mile. Any amount reimbursed more than $.67/mile must be taxed.

I would never ever use my personal vehicle…. I get a company vehicle or I don’t work for that company.

I did field service repairing medical equipment and got a new vehicle every 90K miles.
All gas, tolls, tires, brakes, oil changes, window tints, car wash, etc….. the company paid for.

 

[svtrit]

I have a company F150 that I am charged $120 a month for and can use for most any personal use.

When I took the job, I didn’t really want it, but I figured I could always turn it in later if I decide I still don’t want it, but it would be hard to get if I refused out the gate and wanted it later.

This is the first month my business miles are higher than my personal miles in 7 months of having the job. I have used it for truck things at home about once a month, but I have a minivan at home that could have done it, or I could have rented a trailer for half of the $120 I pay to use their truck.

I kept my personal car (‘19 Nissan Rogue with 32k miles) for now in case I didn’t like the role, or decide to dump the truck. The Rogue cost me $85-$100 to operate, already has a new set of tires, brakes, and I had freshened all fluids right before I was approached about the job. I use it on weekends only now and may trade it on a fun car. It did come in handy for a week while my wife used it when her van was down.

However, the company rents all employees trucks for key seasons or travel, and I could get one as well.

Having had many company vehicles doing various things, I would not want to drive my own car for company business. I’ve taken too many window chips, rubber alligator slaps, and bad roads to put my own car through the paces of my old company trucks.

Good luck! This is the first company that ever charged me to use a company vehicle, so I’m glad to hear it’s somewhat normal. I used to only pay the tax on the personal miles at my other jobs.

 

[Cujet]

Help me understand why a rental car must be utilized beyond the 250 mile limit?

Prior to retirement, I regularly drove a 1350 mile one way, sometimes with en route stops such as Gulfstream in Savannah, GA, Stemme-aircraft in Columbia SC, TEB airport in NJ and so on.

But I did it the other way. Used the company vehicle for long trips and rented a car if it was a local thing.

Of course, I was not to use the company vehicle for personal use, and didn't.

 

[dogememe]

They are making it so confusing.

At my work, it's simple, I use my car for bank runs, that's it. Mileage gets reimbursed at IRS standard rates.

 

[RhondaHonda]

Agreed with others about the 250 miles, that seems odd. Also, do you get 24 or 26 paychecks per year?

 

[fantastic]

It was $110 a paycheck, so $220 month (updated original post, I should have been clearer on that. Sorry.)

I would say a quarter of my miles are outside the radius. Maybe a little more. Closer to 30% probably.

I haven't looked into insurance pricing yet, or a vehicle. I will need to get something (lease, buy new, buy used, etc.) Not sure yet. At all times if you're within the program, vehicle must be newer than 7 years old......

Thanks for the update. The 3rd option has the highest payout. So long as you can figure out what makes the most financial sense for you on the auto. That would be the focus of that 3rd option. Like you mention does leasing make sense to swap out when it hits 7 yrs of age or does it make sense to buy a 1 yr old car to beat the depreciation while maximizing at least 6 years of use then keep it as personal car or use it to trade in would most likely be the realistic option depending on how many more years you have working their.

Leaning towards the 3rd option. So lease or buy but 7 yrs old you'll need to get into a newer auto. It could help get you a personal vehicle you plan to keep afterwords & leasing or trading in still an option after 7 years. That all depends on what year you buy right. Let us know what you decide on. Look into "Accidental Protection" on Auto insurance. I've never bought into any insurance that's offered it until the wife started driving lol but it covers your rates for one accident (keeps them from going up). Now, I don't think I'd ever go w/o it to be honest. I just don't know much about leasing a vehicle & that would be someone else's expertise but I do have plenty of experience buying vehicles. Vehicles 7 yrs or less shouldn't need much attention other than maintenance but I'd definitely recommend you to pay a decent amount for a reputable aftermarket warranty company as you'd be a good candidate for the amount of miles you put on. You could always put that money back to somewhat self insure & know that you don't have to worry about being "Denied" for a repair bill though. Interesting to think about all of this.

 

[UncleDave]

What is it you are doing with the vehicle -carrying tools and gear or you and a laptop?

Never heard of such nonsense, and cant fathom the explanation would be on this mileage limit.