Will you win or lose from taking cash instead of a company car?
There are typically two key reasons for an employer implementing a cash alternative to company cars;
Whatever your employer's reasons, it would be understandable if all you're really concerned about is whether you will win or lose from a cash allowance or opt-out deal.
And you could win by your employer offering you a cash allowance that's generous and leaves you financially better off.
Or you could win just by getting a car that's closer to your requirements than the standard offering on the company car choice list.
But you could also lose if your employer's cash allowance does neither of the above for you.
So, you need to test the maths to work out whether you win - either from a cost perspective, or from getting a more suitable car from your cash allowance - or if you lose, and you therefore need to negotiate with your employer.
To get started you need to focus on the maths surrounding your car's running costs. You will need to:
OK, we're being a bit flippant with the last one, but it's important that you make a cash alternative work for you, not just your employer.
But don't worry, you can take a short cut through all of the maths involved with our 'cash or car' calculator; it's called PaySwaptm and clicking on this link will take you to it.
PaySwaptm will do all the maths for you, irrespective of whether you know how much cash you will get.
PaySwaptm will also show you cars you can get for the money you've been offered and work out if the car you want is affordable.
And once you've done the maths, you're ready to start the next phase; paperwork ....
The old adage "the job's not over 'till the paperwork's done" could not be more apt than when it comes to taking a cash allowance instead of a company car.
You will need to read carefully your employer's terms and conditions for the cash allowance, for example:
This list isn't exhaustive, but you get the idea, and a word with your professional advisers/employee representatives, etc, may well be worthwhile.
Irrespective of whether or not your employer is assisting with the supply of the car or finance/maintenance, read all contractual documentation (car purchase terms, finance agreement etc) thoroughly - it may be painful, but these are usually legal documents and if you don't understand them you probably shouldn't be signing them.
Pay particular attention to:
You've done the maths, checked the paperwork and it all adds up to a win.
That's great, so where to next? Click to read on ...
But if you've lost, don't worry; you now have the ammunition to go back to your employer and challenge their cash allowance proposition.
You know the running costs you will face and the cash allowance you will get. It's time to negotiate.
DriveSmart has a unique suite of free online tools to help you find the right car.
Take a look at some of our amazing calculators and decision tools for new car buyers.