Company Car Or Transport Allowance: Which is Better?

If you live far from your place of work, then you know that driving there is a problem, especially if you live in a traffic-ridden city like Lagos. What if you got a choice to choose between having a company car or going with a transport allowance which would you pick?  We know almost everyone wants to own a car but does actually having a transportation allowance increase the chance of ordering a ride?

The common notion is the usual 9–5 jobs, but in cities like Los Angeles, where the traffic is always constant, you can get 4–10 jobs. Living far from your place of work will surely help matters. What this means is that you are more likely to get to work late, aside from sitting in traffic for long hours to come. In fact, it is something you should consider if your job is more than two hours away from where you live. But the real crux of the story is: when you are getting a job offer, would you rather go for having a company car or getting a transportation allowance?

The first question that comes to mind is what brand and model is the car, or how much is the transportation allowance exactly, and this would definitely play a key role when you wish to decide. No matter which you choose, like everything else, they both come with their advantages and disadvantages. If you are in the position to choose between these two factors, Stick around for this blog; we have the answer for you. 

What’s the distinction between company cars and transportation allowances?

There is a distinction between a company car and a transportation allowance, even though most employees would consider both to be fantastic perks! A company car is, as the name implies, a vehicle that you are permitted to drive by your employer.

On the other hand, a transport allowance is when your employer offers you money on top of your normal pay that is meant to be put toward transporting yourself to work. This may involve leasing a vehicle or just entering a ride, or you could just put the money toward the upkeep and maintenance of your present vehicle.

The most important thing to keep in mind is that, while you will be responsible for maintaining the vehicle with the first option, your employer will be responsible for making the payments and covering the costs of operating a company car, whereas you would be responsible for doing so with a transportation allowance.

Advantages Of Transport Allowance

People frequently value how flexible a transportation allowance can be when discussing its benefits. In most circumstances, you are free to choose whether to lease a car or have a regular means of transportation and how you want to divide the allotment.

A transport allowance is essentially a flexible financial sum that you can use to either lease a car that would eventually transport you to your place of work or use it as a means of pure transportation. You’ll likely receive this allowance each month along with your salary, and you can decide how best to use it by spending it on things like Uber and Bolt.

Advantages of Company car

Having a company car has a lot of advantages. The cost savings compared to operating your own vehicle may be the biggest benefit. There are expenses, such as fuel and maintenance, and the company you work for probably has the car insured, so you don’t have to worry. But this is not likely to be comparable to the amount you would spend on your own car.

Being given a company car also means there are no unforeseen expenses. Your company needs to cover any issues that arise, such as the need to replace the battery or install new tires if they do. The same is true of costs associated with routine maintenance and servicing. In some cases, which isn’t always the case, you might have to spend money out of your pocket to have this established. 

The vehicle itself offers further advantages. Since most work cars are upgraded every few years, you’ll almost surely get to drive a brand-new, fancy vehicle. Since you won’t truly own the car, you won’t have to worry about its value declining. This also implies that you are free from financial obligations.

Limits for Company Vehicles and Transport Allowances

The amount you will receive as a transportation allowance is another factor to think about because it might vary greatly. Some might contend that having to return your corporate automobile when you leave your job is the biggest drawback of having one. Also, if you depart quickly, you might not have enough time to put money up for a car deposit. So, you can experience transportation issues unless your new job has a comparable benefit plan.

Additional constraints of a company car include being unable to choose your own vehicle. Although the car will probably be wonderful, switching to driving a large sedan could take some getting used to if you’re used to smaller cars. 

Is a company car better than a transport allowance?

The major considerations to keep in mind if you’re fortunate enough to be given the choice between a company car and transport allowance are your existing financial status, the business vehicle you’d be granted, and how much you would be spending on transport. In terms of the former, obtaining a car loan in your name could increase your worries if you are worried about money. Hence, a transport allowance might be a better option.

If you travel a lot, you might want to consider a car that is more fuel-efficient and factor in the cost of fuel. In general, it’s a good idea to determine whether alternatives are more affordable; a transportation allowance may not be the best choice.