Mileage Reimbursement or Company Car?

Messages
471
Location
Alabama, USA
Hello all...1997 Avalon 254K. Love the car--it is showing its age and the AC is on its last leg but otherwise no issues. I have been assigned to an out of town job (approx. 250 miles away) and have the option of being paid mileage ($.45 per mile) or using a company car and company gas card. I plan on returning home once/week and the job is expected to last 6 months. I would appreciate opinions on if I should drive my vehicle and accept the reimbursement money or just leave my vehicle at home and use the company vehicles and gas. The drive is 95% interstate miles... thanks
 
Messages
1,462
Location
East Mountains, NM
No way to put money in your pocket if you take the company car. I believe you can run your old buggy for substantially less than $.45 per mile. The question is: Do you trust your buggy enough to use it like this? If you do, you should be able to put a dime or two per mile in your pocket.
 
Messages
13,616
Location
Frisco, TX
I'd take the company car. $0.45/mile is a horrible reimbursement rate. $0.60 is where you want to be (last I checked, the gov't recommendation was like $0.585).
 
Messages
763
Location
NJ
$.45 seems to low. When I was reimbursed from work a couple of years ago I believe it was $.51. I do believe rate is at discretion of employer but see link below from IRS website. http://www.irs.gov/2014-Standard-Mileage-Rates-for-Business,-Medical-and-Moving-Announced
 
Messages
2,820
Location
Southeast Alabama
If you take a company car you run into a situation there could well be some state and federal income taxes also. If you are using your own vehicle I would think that 60 cents a mile would be a better number. I have been retired just over 10 years and recall that even then I was paid around 50 cents a mile for using my own vehicle. Find out the tax situation either way and if you use your own vehicle how much of that usage can be written off and the tax situation using a company vehicle.
 
Messages
17,301
Location
OH
If the Avalon is up for five hundred easy miles a week, then you'll make money driving it at .45/mile. OTOH, things are known to break on a somewhat regular basis on seventeen year old cars with a mere 254K, but you know the car and what's been done to it over the years.
 

mjk

Messages
1,482
Location
Wishin' I was in Wi
Even if .45/mile is 'substandard', you are on your last years of the car's life. I own a v6 Camry, and know you will be probably at 29-30 mpg on the hwy. I'd pocket the money. You might as well make some money off of it, at this juncture. It sounds like it is running fine (as it should), if you can keep the AC running during the summer, it just seems like a 'no-brainer'.
 
Messages
11,655
Location
Illinois
I drive a 2003 Mazda that costs me about $0.15/mile to drive and get reimbursed at $0.555/mile give or take. That cost includes buying the car, maintenance, repairs, taxes, tags, etc. Driving a used car, you can make a bit of money on the mileage reimbursement. While 0.45/mile is lower than the IRS figure, you'll still make about $20/hour driving on the interstate. Let's see, 250 miles * $0.30 if your operating costs are similar. So you are making $75 one way, or about $20-$25/hour depending on how fast you drive after you pay your costs. If you drive the company car, you make $0/hour on the mileage. You don't pay taxes if you expense your mileage. You may pay taxes if you have a car allowance. Previously, I got a $450/month car allowance, but could then deduct my work mileage, as the allowance was taxable. We went to claiming expenses on our work related mileage. I no longer got the allowance, and no longer had to document my mileage for the IRS. I still keep a log, but that is now for my expense report. I think it comes down to what you value most. If it were me, I'd milk the Avalon for a much company money as possible, putting the $0.30/mile you are netting into a saving for a replacement car, or repairing the A/C and any other bothersome issues.
 
Messages
415
Location
Slimy Mudhole
What brand/model is the company car??? Is your typical nightmare rental car (Hyundai accent or similar) or is a somewhat nicer car?? And how it compares in terms of safety with your actual car?? (Airbags, stability control, etc)
 
Messages
17,301
Location
OH
Originally Posted By: dparm
I'd take the company car. $0.45/mile is a horrible reimbursement rate. $0.60 is where you want to be (last I checked, the gov't recommendation was like $0.585).
While a higher reimbursement rate would be nice, it's not on offer in this case and is probably not negotiable. .45/mile would still make the OP a little money. .60 would make him more, of course.
 
Messages
11,655
Location
Illinois
One other thing to consider. If it's too hot, you might rent a car for a month or two, still claiming mileage, then drive the Avalon when the weather cools. (If that ever happens in AL)
 
Messages
9,051
Location
Houston, TX
We receive the IRS rate for mileage when using a personal car for company business, however, we are also required to carry 1MM worth of insurance too. Is that a requirement on your part from your company? If so, do you have it? Will it substantially raise your rate? Considering the temps in AL at present and the fact they will not really reduce until late October (using Texas as a feeler gauge), this means that you have about 8 hours a week in a car with minimal A/C. If that is not a big deal and if you will not have to incur more cost due to insurance, the reimbursement may not be a bad choice. You will put about 12,000 miles on the car and will gross about $5,400 on the reimbursement. If you can manage about 25MPG, you will burn about 480 gallons of gas at a cost of about $1,800 using $3.75 as the cost per gallon. Provided you have no other car related expenses (and provided my math is correct), if we deduct $100 for oil and miscellaneous car expenses, you will net about $3,500 by using your car and taking the mileage reimbursement.
 
Messages
24,382
Location
Central Florida
Company car. No need for you to risk breaking down / accident far away from home in your Toyota when you can drive a company car with ZERO headaches. I have that same option at my job: I always take the company car since my personal car avoids accidents and mileage Mon - Fri.
 
Messages
13,616
Location
Frisco, TX
Originally Posted By: Darwin1138
What brand/model is the company car??? Is your typical nightmare rental car (Hyundai accent or similar) or is a somewhat nicer car?? And how it compares in terms of safety with your actual car?? (Airbags, stability control, etc)
Hyundai Accents are not "typical nightmare rental cars". They're actually pretty nice for the price, and for what OP will be doing, would work quite well.
 
Messages
203
Location
Iowa
Always take the company car....had them for 17 years and you rarely come out ahead with the reimbursment. Shouldn't have any tax consequences as long as the car is used for business. Its personal use of a company car that has tax implications. Take the company car!
 
Messages
36,461
Location
ME
Go for the reimbursement. My wife drove a saturn SL1 to Quebec city and made 45 cents a mile on it, while getting 40 MPG and running on $10 used tires. We came out WAAAAAY ahead. Just make sure your insurance knows you use it for work. I put a vehicle on for "business use" and its premium only went up 10%. The IRS (presumably) assumes, at 51 cents a mile, that you're leasing a new midsize ford and having the dealer do all the maintenance. You can beat that. The rule is "no more than xx cents" but businesses know that reimbursing their employees is tax free gravy bonusses for them and also helpful to their own arcane accounting (like not having vehicles on hand.)
 
Messages
17,301
Location
OH
Originally Posted By: iahawk
Always take the company car....had them for 17 years and you rarely come out ahead with the reimbursment. Shouldn't have any tax consequences as long as the car is used for business. Its personal use of a company car that has tax implications. Take the company car!
Commuting is considered personal use and does produce imputed income which the company is required to report. Driving to the worksite might be considered commuting unless done on paid time.
 

bcossa2001

Thread starter
Messages
471
Location
Alabama, USA
The "company car" would likely be a new truck since they are contemplating replacing our current used trucks (that have no AC). I get a car allowance so that is why the reimbursement rate is lower than normal. I don't really care what type car I drive as long as it gets me there. The reimbursement money is tempting as it will let me fix the AC and get a few misc. interior wear items re-done.....
 
Messages
1,388
Location
Elizabeth. Colorado
You can claim the difference between the rate you are paid and the IRS rate on your taxes. My company truck use is taxed as income. I'd much rather pick and use my own car although the gas card sure is nice some days!
 
Top