HomeHome SearchSearch MenuMenu Our productsOur products

A company car: A huge advantage or a massive money waster? You decide!

by , 15 July 2014
Every asset your company buys comes with its own pros and cons. One of the biggest culprits is your company car.

It's wonderful for your employee who gets to do all his business travel in the car, but does it benefit you?
As a constantly depreciating asset, a company car could be a massive money waster.

To help you decide, here are the pros and cons of spending your hard earned company money on a business car...

*********** Product endorsement  ************
Put a stop to all your company car and travel allowance headaches today with this one tool
 
Get the answers to your biggest company car and travel allowance questions right now and avoid being hunted down by SARS for making costly mistakes.
 
*****************************************
 

The disadvantages of a company car

 
As I said, a company car is a depreciating asset. This means when you decide to sell it, you're going to get much less for it than you paid for it.
 
This makes it an automatic loss. 
 
Then there's the maintenance, fuel and insurance. All of these add up because your company is completely responsible for it. 
 
It's also an unpredictable asset. Unless you're a wizard with cars, you won't know when it's going to start acting up. You may find your company has to fork out R1 300 on new brake pads when you hadn't budgeted for that.
 
So there are a lot of disadvantages to a company car, but there are handy advantages too...
 

The advantages of a company car

 
Even though it's a depreciating asset, you can still get some extra money from it. You can claim a wear and tear allowance on the asset depreciation. In fact, if you use the straight line depreciation method, you can save a ton on tax and make up for the car's depreciating value.
 
A company car is also much simpler to manage than a travel allowance and your employee's the one that pays tax on it, not you.
 
With that information, you can decide whether a company car is the best idea for your company. 
 
*********** Best seller  *************
12 Taxable fringe benefits - are you taking advantage of all of them?

There are hundreds of companies out there that don't know which fringe benefits are taxable or they land up taxing the wrong percentage on them...

This kind of error could cost you thousands in penalties to SARS if it catches you out – and it will!
*********************************


Related articles




Related articles



Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>