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Beware these three disadvantages of company cars

by , 29 September 2014
Company cars are great things. Not only are they a huge advantage for your employee but they boost your company's net wealth and enable you to claim sizable depreciation tax deductions.

But it's not all sunshine and rainbows in the land of company cars. These are some serious down sides you need to consider before you rush out to get those new company wheels.

Keep reading to find out what these disadvantages are before you make your decision...


Company cars come with these three disadvantages

Disadvantage 1: Fuel, maintenance and insurance costs
Because it's a company car, your company must foot the bill for all of these expenses even though your employee drives it. These costs can really add up especially if your employee has to do a lot of long distance business travel in that company car. 
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Disadvantage 2: Accidents
If your employee has an accident in the car, you have to deal with the fall out. Your company holds the policies for the insurance so you'll have to handle it. And if the car's a write off, you incur the loss. This is because the insurance generally won't pay you the full value of the car.
Disadvantage 3: Poor reliability
An unreliable car can be a massive burden. Every time it breaks down you must deal with it. Even though you can probably claim a deduction on this expense it's very inconvenient for your company. It also means you'll need to send someone out to fetch your employee and the car every time this happens.
These disadvantages can cost you a lot of time and money. That's why, if you go for a company car, it's really important to choose a good car and control how your employee uses it.

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