Company car or business car insurance?
For some people a company car and business car insurance are pretty much the same thing, unfortunately that’s wrong; they’re completely different!
What is a company car?
A company car is one provided by the business you work for to be used for both work and private use.
Usually the maintenance and insurance costs of a company car are paid for and covered by your company.
This all sounds brilliant and free but it’s not as you have to pay company car tax.
Company car tax, or Benefit-in-Kind (BIK) value, is based on the car’s list price (including VAT), delivery and any options you add to the car over £100, as well as CO2 emissions.
The BIK is added to your salary and then taxed at your usual income tax rate. So, depending on the car you choose, this can be quite expensive.
What is business car insurance?
Business car insurance is simply a different kind of insurance policy for your own private car that covers you to use your car for work.
Sometimes your employer will pay for the extra costs of your business car insurance policy but a lot of the time the cost of business car insurance is covered by a mileage allowance.
Should I get a company car or business car insurance?
The two aren’t really comparable because a business car insurance policy is just an insurance policy whereas a company car is, well, a car.
If you ever get the option of a company car or a business car insurance policy then you really need to do the maths behind which is less expensive and then the logic behind whether you want a new car or to stick with your current one.
Just make sure you need business car insurance before you sign the dotted line because it will increase your premium.
While mustard.co.uk can’t help you with a company car we can help you compare business car insurance quotes online and over the phone.