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Change company cars? Think about this!

2 września, 2022

There is a lot to think about when it comes to company cars. What kind of cars should we have, what does our car policy look like and also, when the day comes, how do we dispose of the cars in the best way?

What kind of car should the company buy?

The type of car that the company should buy (or lease) depends on what the car will be used for and whether the company has specific needs, for example a large cargo space, that the car must meet. When the needs analysis is complete, it is a good idea to review the major cost items.

Depreciation - the biggest cost item

Calculated for a new car in the Golf class that is driven 2,000 miles per year, the reduction in value accounts for 40 percent of the car's total cost. On used cars, the first, and large, reduction in value has often already taken place. In order for the car's residual value to be as high as possible in a future sale, it is therefore important to look after your cars. Service the car according to the manufacturer's service interval, fix stone chips and wash the car properly.

In addition, you can earn a penny by staying up-to-date on current trends. For example, we see at Kvdbil that car buyers are more and more inclined to pay for new technology. If you have the opportunity to buy cars for the company equipped with new technology, it is a good idea - it pays well on the used market.

What is the difference between a company car and a benefit car?

The difference between these two concepts is a bit subtle and can differ from company to company, depending on how they design their car policy. Below we describe a general breakdown.

Regardless of whether you have a company car or a benefit car, you can deduct the costs of the car. The difference is whether you as a private person or a company must make the deductions. What can make the choice difficult is whether you, as the owner of the company, will use the company car both in the service and privately.

Drive company car

A company car is owned by the company and must be used in the business. It is the company that is responsible for all costs connected to the car, but deductions may be made to reduce taxes and then keep costs down for the company. A company car may be used privately, but as a rule on no more than ten occasions per year, which in turn can be a bit difficult to keep track of and when you use a company car privately, you as a private person are taxed on benefits. An important difference between a company car and a benefit car is that if the company owns the car, the company can deduct the depreciation.

Drive a benefit car

As a private individual, you can use a benefit car unlimitedly for private use. If you use the car in the service and do not deduct any car expenses, you can receive "mileage compensation" from the company. The car benefit is seen as an addition to your salary and is taxable, which means that you as a private individual may end up paying more in tax.

How to design the company car policy?

The car's purchase price does not give the whole picture of what the car costs you. Instead, start from the car's Total Cost of Ownership (TCO), which includes all the car's costs. TCO therefore gives you a truer picture of what the car costs you to own. Our colleagues at bilpriser.se have extensive data on the total cost of ownership of different models.

Something that may seem obvious, but which is sometimes missed, is setting limits for which car models can be purchased. This is to prevent, among other things, the purchase of models that are difficult to relocate internally. For example, a restriction in the policy may mean that sedan and station wagon models are purchased and not convertibles.

When it comes to what equipment the cars should have, it is good to keep in mind that a lot of extra equipment can significantly affect the car's TCO. But with that said, many companies design their policies with requirements for certain safety equipment. Examples of this can be City safety, autobrake, Bluetooth and reversing warning.

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