Understanding the True Cost of Wear and Tear on Your Vehicle
Many people drive their vehicles for work-related purposes. Some are provided the choice to drive their own vehicles and to take advantage of a vehicle reimbursement program or to drive a company vehicle as an alternative. Others are required to drive their own car for work and are provided with a car allowance to compensate them for wear and tear on their vehicle, fuel expense and more. Many drivers who are thinking about participating in a vehicle reimbursement program believe that the car mileage allowance is a great deal provided the return to them is greater than the cost of gas. However, as you review your company’s car allowance policy, consider these points.
The Resale Value of Your Vehicle
Regardless of whether you drive a car, truck or SUV, your vehicle’s resale value declines with each mile you drive. A great vehicle reimbursement program does more than just pay for gas to fill up your car. It also takes the decline in resale value into consideration when structuring the reimbursement payment to you. A smart idea is to estimate how many work-related miles you plan to drive in the next year. Then, use a car valuation website to estimate the current value of your car and the future value of your car with extra mileage tacked on. This will help you to see the true difference in value that wear and tear can make.
Ongoing Repairs and Maintenance Needs
The more you drive your vehicle, the higher your repairs and maintenance costs will be. Consider, for example, that you may have to get oil changes, tire rotations and other maintenance services performed much more frequently when you drive your vehicle for both work and pleasure. In addition, the added stress and strain on your vehicle caused by additional miles may result in the need for more repair work over the years. If you choose to participate in a vehicle reimbursement program, a smart idea is to save some of the money that you receive through the program to account for these extra repairs and maintenance costs.
While there may be more expenses associated with wear and tear on a vehicle than you first considered, participating in a vehicle reimbursement program may still make sense. Consider, for example, that the amount of the reimbursement may be the same if you drive a very affordably priced car with great fuel economy or a luxury car that guzzles gas. The reimbursement program would be more more financially beneficial for the driver of the less expensive and more fuel efficient car. As you decide whether to proceed with a job that requires you to drive your own vehicle for work, factor these points into your decision-making process. The CarData Consultants Incblog may be able to provide you with more information.