If you own a business, then it quite often makes sense for you to have a company car, too. Although this isn’t true for everyone, it is often the case. Here, you have two options, you can either buy the car yourself and charge the company, or you can buy the car as a company asset. In this post, we take a look at the benefits of buying a company car, as well as some of the potential negatives.

Make Sure You Know About Tax

Although tax breaks on company cars used to be considerable, they have been steadily climbing, as consecutive governments have taken somewhat of a dim view of them. At present, the tax paid on a company car is largely dictated by the vehicle’s CO2 emissions. As a general rule, the lower the CO2 emissions, the lower the level of tax paid. You’ll also have to pay the same percentage in tax on the fuel you consume and bill to the company.

Additionally, the company will be responsible for paying National Insurance Contributions for the car and the fuel benefit.

Is A Company Car Right For Me?

For many, the tax implications of a company car mean that it isn’t a worthwhile investment. However, although there are drawbacks, there are also several advantages to having a company car.

For example, if the company buys a car which hen depreciates considerably in value over a year (which is often the case with cars), you can then buy the car off the company at a fraction of the price that they paid for it. This way, the company, rather than you as an individual, pays the cost of depreciation. Plus, if this cost exceeds Class 1A insurance and tax charges, the company will also come out on top, so it’s a win-win.

Plus, if you’ve always dreamt of having a classic car, then you can have one as a company car, as these meet HMRC’s stringent requirements. This is very handy in saving you money on ongoing maintenance costs, which can be charged to the company.

What Type of Car Should I look For?

For your company car, you should look for something reliable, spacious and stylish. This way, you’ll be able to carry out your work without fear of breaking down, but will also be able to impress clients. Here are our three favourite options:

#3 AudiA4 – Audi are known for engineering brilliance, and the A4 is potentially the pick of the bunch. It’s also incredibly spacious and very comfortable on long car journeys with lots of driver conveniences.

#2 Toyota Avensis – The new Toyota Avensis has all the technology of the Audi at a fraction of the price. It’s perfect if you’re looking for something on a budget with a long warranty.

#1 Ford Mondeo – The Mondeo is the ultimate company car. One of Britain’s favourite vehicles, it really has something for everyone. If you don’t need all the interior space, then the Focus and Fiesta are just as good, too.