Company car vs mileage reimbursement

Depends on if the company vehicle would be available for personal use

Buy a cheap electric car with your mileage reimbursement and plug it in to charge while at work


Win win

53 cents / mile on the mileage reimbursement?

Any personal use on the company car option?

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53 cents / mile on the mileage reimbursement?

Any personal use on the company car option?

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$.67 and yes

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If your car gets wrecked, it’s on you to replace it. Reimbursement just moves the risk to you. The money you think you are making gaming the system can be quickly lost.

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This is the biggest pro/con in my opinion, to mitigate the risk as much as possible, you have to drive a vehicle that isn't worth as much, thus likely older.

Ours is $400/month and $.52/mile. The kicker is you have to be under 5 years or 120k miles.

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Tax on personal miles for the company car option?

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I'm not sure on the details of that, the folks I do know with company cars tend to only use them if they're running to the store or something. No one is taking them on personal use roadtrips. So I'm assuming there are some stipulations on mileage or something.

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I'm having a debate with coworkers, we're offered either a company car (currently a 2023 Toyota Camry) or mileage reimbursement, no vehicle allowance.

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No vehicle allowance makes this sound like a no-brainer to me. If you think you can cover fuel, maintenance, insurance, and the cost of the vehicle on the IRS mileage rate then do you, I suppose.

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I've ran the numbers and I think you'd be better off buying a used Camry (or something similar in reliability), it'd theoretically pay for itself in 2 or 3 years and if you figure another year for maintenance, after 4 years, you're making money. Theoretically, you've put 60k miles on it during this time.

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Current IRS rate is $0.67/mile. If I assume 25 mpg and $3.20/gal, that’s ~$0.13/mile in fuel cost. So theoretically you “make” about $0.55/mile.

Assuming you actually drive 15k reimbursable miles a year, that’s ~$8,000/year before maintenance, insurance, and the cost of the vehicle.

Average cost for full coverage in LA is supposedly something like $3,800/year. So now you’re down to $4,200/year.

Say you buy a 10 year old Camry with 100k miles for ~$10,000. Let’s then say you’re going to drive it to 200k miles. That’ll get you ~6.7 years at 15k miles/year. So your vehicle cost is.. $1,500/year? Now you’re down to a net $2,700/year from the mileage. It’s really less than that because of time value of money, but let’s go with that.

Now let’s say you spend, I don’t know, $400/year on maintenance. You’re down to a net $2,300/year from mileage.

For that $2,300/year you get:
- All of the maintenance risks (one bad break could wipe out your savings).
- All of the insurance/collision risks (both in terms of liability and the risk that it gets totaled somehow).
- A car that’s 10 years older and has 100k more miles.

Can you make money? Probably. Is it worth the risk and inconvenience? Debatable.

easy, mileage reimbursement. Obviously tons of factors to consider.

How does insurance work?
On either case?
Do you have to disclose to your insurance company you use your personal car for business purposes?
Do you have to personally pay insurance on a company vehicle?