Thinking of Getting a Company Car? Here’s What You Should Know

One of the most attractive perks a business can offer its employees is a company car. This is a vehicle that’s provided to the employee by the employer. They’re often preferred when the role involves a great deal of travel, and they tend to offer a range of advantages to both employee and employer. Let’s take a look at some of them, along with the accompanying downsides.

Advantages of a company car

First, let’s consider the upsides.


Company cars tend disproportionately to be luxury models of the sort favoured by high-ranking executives. Quality manufacturers like BMW, Mercedes, and Audi confer a level of prestige on the driver, which the company will enjoy by association. If the business has a good working relationship with a local dealership, then it might be able to leverage a bulk discount. For example, car dealerships in Leeds that specialise in used luxury cars might be of interest to businesses in wider Yorkshire.


Offering a company car tends to attract a higher quality of candidates for any given role. It’s a demonstration that you trust in the would-be employee, and that you’re willing to invest heavily in them up-front.

No unexpected costs

When your car is being effectively lent to you by your employer, the cost of motoring becomes much more predictable. No matter how many unexpected miles you accumulate, you won’t be paying anymore – especially if the company is paying for your miles as well as your business ones.

No depreciation

Since the employee isn’t going to own the vehicle, they don’t need to worry about the effects of depreciation or the hassle of having to resell it. Moreover, they can get a replacement at regular intervals.

Disadvantages of a company car 

All of that aside, there are a few drawbacks worth mentioning.


The first downside is that the business will have to pay what’s called company car tax. The level of tax owed is calculated according to the road tax value of the vehicle, and it takes into account the emissions. For this reason, it might be worth considering providing an all-electric fleet along with charging facilities at the office.


The more miles being driven by employees in company cars, the more liability that the company will undertake. This will increase risk for your insurers, which will tend to drive up premiums. As a result, many businesses end up imposing strict usage limits, which can end up having a demoralising effect on workers.


When your car belongs to you, you have the luxury of letting it deteriorate. This isn’t the case with a company car. Employers should let employees know what’s expected of them when it comes to maintenance and general care. Create an inspection schedule, and make sure that the car is kept clean as well as functional. 

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