Company Car Allowance Screwing

TheRidDlerX

TheRidDlerX

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Jukskei Park, Randburg
So our company has come forward and decided to give us all the option between a lease car (that can be picked from a list based on your level) and a substantial car allowance. They have released a car policy stating vehicles are not allowed to be older than 48months or 140,000 kms and then a bunch of other nonsense based on promotions and all that. I drive a 3 series BMW, oldish model (2007) and it has 170k on the clock. After looking at the choices we are given as lease cars i was kinda diasappointed as i really enjoy my car, and BMWs in general. Our execs are allowed 3 series as leases, but not us. So i opted for the allowance option. Went to a garage and had a chat with a dealer there for the new 3 series which is quite comfortable installments with the allowance and a 20% balloon (seeing we need to trade them in on 48 months anyway).

So i went to my manager with the forms to get approval for the car - and he talks with me 'as a friend' asking about the way i plan to finance, etc. I tell him my plan and he's like ok. Few days go by and suddenly i am forwarded a mail stating the car policy has been changed, and no residual values are allowed, basically screwing my whole plan. Also, suddenly in the new policy they now require copies of the financing agreement.

My question is WTF does the way i finance the car have anything to do with the company and can they actually request the financing docs? If i leave them, for example, a month from now, the car would be my responsibility - not the company's. Who or what is giving them the authority now to deny me a car i want to get (that falls within all their rules btw).

Making me angry.
 
I actually think that it is their right to know what and how you are buying, if they are subsidising the amount.

Yes, the car will be in your name, but in effect, they are paying you to buy it, so the money is "theirs".

It is also their right to protect their interests, and make the rules, with respect to balloon payments. In theory, someone could buy a top of the range car with a massive residual value, and if the guy cannot pay for it at the end of term, effectively it becomes the company's hassle.

I know that you won't like me saying this, but that is actually the case.

Best plan is to buy a car within the budget that they have given you, and be grateful that you are being subsidised into a nice new car. :)
 
How does it become the companies hassle if you sign the finance agreement?
 
Thanks Fazda, solid advice. I guess you make valid points, most of them have gone through my mind also at some point, i guess i was just too stubborn to admit they are most likely the truth. Luckily we are allowed to stretch the 48 month financing to 60, which should help a bit.
 
The message is clear:
Thou shalt not be a non exec and drive a BMW, unless such BMW is old. Then thou shalt be able to.
 
Fazda said:
Because the company is effectively paying you to pay for the car.
Click to expand...

Who is taking the risk here though?

Lets say the OP has a 3 week cocaine fueled bender and loses everything. Is his company responsible for vehicle finance, or is he?

When you company gives you a cellphone allowance, do they care if you take out a contract for an iPhone or a GS4?

Its like Snatch says - when I throw a dog a bone, I dont want to know how it tastes. So why does the OP's company care?
 
The company is being unreasonable IMHO. The age and mileage restriction makes sense but how does the residual affect one's ability to perform their duties?

As for the company "paying you to pay for the car", I disagree with this also. What would happen if OP had already bought his 3 Series on residual 2 months before the company implemented the car allowance?
 
You can look at it any way you want, but the company is still effectively paying for your car, and as a responsible company, it is up to them to see that you don't act like a hafwit and get yourself into trouble.

Comparing this to a cell phone allowance is not comparing apples with apples.

In theory, you could walk in to Jaguar Umhlanga and order an F Type, or walk across the road and buy a 911 if you were stupid enough. You might be able to afford either car if you included their subsidy, but take it away and you are in the dwang. A company with no social resposibility might allow you to do it, but one with any form of collective "conscience" is going to do what the OP's company did and suggest that you lower your sights.
 
efitol said:
The company is being unreasonable IMHO. The age and mileage restriction makes sense but how does the residual affect one's ability to perform their duties?

As for the company "paying you to pay for the car", I disagree with this also. What would happen if OP had already bought his 3 Series on residual 2 months before the company implemented the car allowance?
Click to expand...

I should imagine that they would be forced to take the risk in that case, however, I am sticking to my guns that it is the comapny's responsibility to see that their "substantial" car scheme is not abused.
 
Fazda said:
You can look at it any way you want, but the company is still effectively paying for your car, and as a responsible company, it is up to them to see that you don't act like a hafwit and get yourself into trouble.

Comparing this to a cell phone allowance is not comparing apples with apples.

In theory, you could walk in to Jaguar Umhlanga and order an F Type, or walk across the road and buy a 911 if you were stupid enough. You might be able to afford either car if you included their subsidy, but take it away and you are in the dwang. A company with no social resposibility might allow you to do it, but one with any form of collective "conscience" is going to do what the OP's company did and suggest that you lower your sights.
Click to expand...

That's like saying even with no car allowance, your company should be involved with your purchasing decisions in case you lose your job. Take away most people's salaries and they are in equal dwang.
 
My company is effectively paying for my house, but they didnt ask to see the finance agreement. Are they irresponsible?
 
Fazda said:
Because the company is effectively paying you to pay for the car.
Click to expand...

But the agreement between yourself and the finance institute does not make the company liable for the car. Unless they sign something to that effect - but that doesn't seem the case, as they are only now asking for a copy of the finance agreement.
 
xrapidx said:
But the agreement between yourself and the finance institute does not make the company liable for the car.
Click to expand...

I don't get that either.

Usually a car allowance forms part of your total package and how you structure that within the package is up to you (up to a certain percentage of your total package). The age, financing of the vehicle, insurance etc is not the companies baby (some companies will have group scheme insurance arrangements which lowers the insurance costs due to 'bulk buying'). How you work the tax out based on your allowance, vehicle price & milage travelled is between you and SARS.
 
Aaah the good old "perks" of working for large companies.

I've long since given up on seeing any of these things as benefits and instead ask for the cash directly or the option to take the cost on myself and expense claim it every month instead.

Much less drama than having to go "through the company" for everything.

I know it's not an option in this case, just saying anyway.
 
xrapidx said:
But the agreement between yourself and the finance institute does not make the company liable for the car. Unless they sign something to that effect - but that doesn't seem the case, as they are only now asking for a copy of the finance agreement.
Click to expand...

We are actually arguing in circles without seeing the fine print of the OP's contract with his company.

I understand that he is paying for the car, in his name, but I also see the angle of the company, not wanting him to burn his fingers on a deal that could potentially get him into trouble.

The company obviously knows what his salary is, and they also know what their car allowance package is, and it is very simple for them to work out if he is over committing himself in buying a car that is above what they envisaged.

Let's just say, the Car scheme is based around any car for 300k, but the employee really likes Car Z that costs 400k, but with some "clever" work on the finance side, suddenly it all fits into place, provided the employee can come up with the extra 100k in the form of a balloon at the end of the finance period. Surely it's up to the company to say "Look buddy, we really like that you like that car, but it is going to over commit you in the long term" ??

Many years ago when I was much younger and impulsive, my company offered me Rx to buy a company car and rather foolishly I didn't think of the tax implications, and ended up having to get rid of the car to someone who could afford the payments, when things didn't go so well down the line. Had I had a little guidance initially, I would have bought a less expensive version of the car, and I would have been able to carry on with the payments and had a decent car, instead of getting rid of my fancy new baby and ending up with a very used version of the same thing in order to "keep up appearances".

The OP is welcome to take my advice, or ignore it, but I would certaily have appreciated my company a great deal more than I did, had I had that guidance in the first place.
 
Fazda said:
We are actually arguing in circles without seeing the fine print of the OP's contract with his company.

I understand that he is paying for the car, in his name, but I also see the angle of the company, not wanting him to burn his fingers on a deal that could potentially get him into trouble.

The company obviously knows what his salary is, and they also know what their car allowance package is, and it is very simple for them to work out if he is over committing himself in buying a car that is above what they envisaged.
Click to expand...

Imho that's none of the company's business, if they could control what he spends on a car then they can control what he spends on a house, tv, fridge, laptop etc. It really is none of their business as far as I'm concerned, legally nobody can appoint them as a 'nanny'. If he wants to over extend himself and buy porche gt3 then that's his problem.

I'm in disagreement on this one.
 
ponder said:
Imho that's none of the company's business, if they could control what he spends on a car then they can control what he spends on a house, tv, fridge, laptop etc. It really is none of their business as far as I'm concerned, legally nobody can appoint them as a 'nanny'. If he wants to over extend himself and buy porche gt3 then that's his problem.

I'm in disagreement on this one.
Click to expand...
We'll have to agree to disagree on this one.

I am of the firm opinion that if a company gives you X amount to spend on a car, they have the right to give you a range of cars to pick from, and this is really what it's all about.

They give you the cash for a Polo Vivo and you use it to go towards a BMW 320 +++ they should have the right to tell you that you have overstepped the mark, and it's got nothing to do with being a nanny and everything to do with the average car allowance and what the company allows you to buy.
 
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