Company cars are fast-becoming a popular perk for many employed individuals in Canada. From greater financial security to the convenience of easy transport, it’s no wonder more Canadians are choosing company cars. But is a company car worth the amount you’ll end up paying for it?
If you’re considering taking a company car, it’s important to understand the associated costs. A company car is a big expense, so it’s essential to understand what you’re getting yourself into—especially in Canada, which has some of the highest gas prices in the world. Although company cars are often seen as a great benefit and a bridge to more money, the costs associated with them may be more than you think. The median price for a company car in Canada is around $49,769, before taxes, fees, and insurance.
To assist with the decision making process, Canadians can use helpful resources such as government calculator tools. These resources can provide an individual with projected gas mileage costs, car maintenance costs (including tires, oil changes, and general upkeep), and a comprehensive overview of insurance and registration fees. Therefore, it’s important to consider many calculators in order to get an accurate reading of how much the company car will actually cost you.
Another factor to consider is the potential impact of the decision on your personal finances. Will you have access to enough cash to meet all of the payment obligations associated with your new car? Many Canadians have found themselves in trouble because they fail to consider their financing capabilities before jumping into a new car. A company car is definitely a wonderful perk, but it’s not worth the strain of dealing with financial difficulties.
For those wondering how much a company car might depreciate over time, experts agree that the value of a car in Canada can decrease anywhere between 1-15%, depending on model and year. This means that it’s important to research thoroughly, as the wrong decision could lead to great losses. Buying a car with a good resale value can help to minimize depreciation, so it’s best to do your research and pick carefully.
It’s also important to remember the potential expenses associated with company cars. Cleaning and upkeep, license plates and insurance—among others—are all costs associated with keeping a company car. Although these may seem like small costs, they can quickly add up over time, increasing the total cost of the car and potentially breaking the budget of an individual.
The bottom line is that the value of a company car in Canada depends on many different factors. It’s important to ensure that you are well-versed in the associated costs before taking the plunge, and to calculate the potential savings carefully. With the right resources, anyone can make sure they’re getting a good deal and making the most of their money.
Taxes and Financing
Taxes are an important part of the decision to enter into a company car agreement in Canada. It’s critical to know how much tax you’ll owe on the car, as this can end up being a significant expense. The amount of tax you’ll pay will depend on where you live, as it is regulated by provincial governments. Generally, taxes are a percentage of the overall cost of the car. Additionally, make sure you’re aware of other levies, such as the Goods and Services Tax, which will vary from province to province.
Financing is another important consideration. It’s important to look for competitive terms on a loan for the purchase of a company car. Rates and terms can vary greatly from lender to lender, so it’s important to shop around and secure the best terms possible. Additionally, some lenders may offer incentives in the form of rebates or discounts. It’s a good idea to research these as well, to see if they could potentially save you a significant amount of money.
Lastly, consider budgeting your expenses. Keep in mind the potential costs associated with owning a car, such as gas, maintenance, and insurance. Using a budget calculator can be a helpful way of making sure you’re not overspending for a company car, and ensure that you have enough left over for other necessary expenses.
Canadians’ Perception on Company Cars
When it comes to Canadians’ perceptions of company cars, it appears that the majority view them favorably. A survey conducted by the Canadian Automobile Dealers Association (CADA) showed that nearly three-quarters of those surveyed felt that company cars were a beneficial perk, with many citing the convenience, financial security and the sense of status that comes with having a company car. Additionally, nearly half surveyed said that they believed a company car made them ‘feel important’.
Interestingly, however, a significant 33% of CADA survey respondents stated that they perceived being a company car owner as a sign of ‘wastefulness’. Given that Canada has among the highest gas prices in the world, this view is no surprise and likely reflects a broader trend in Canadian society—that of looking for ways to save where possible. Consequently, it’s important for prospective company car owners to remember that ownership of a car needs to be taken seriously, and the potential costs should always be taken into account.
Environmental Impact
Because of Canada’s colder climate and the amount of driving necessary to get from place to place, owning a company car does come with some environmental consequences. Vehicle emissions are a key factor in air pollution and Canada’s contribution to global warming, and as such, careful consideration needs to be taken of how owning a car can potentially contribute to these issues. Therefore, it’s important to look into green and energy efficient car models when considering a company car.
There are numerous cars on the market that are designed to reduce fuel consumption and produce fewer emissions. These cars can cost a bit more upfront, but can save you money in the long run. Additionally, if you’re considering a car that runs on gasoline, try to look for cars with an Energy Star label, to ensure that it meets energy efficiency standards.
Furthermore, there are more and more options for electric and hybrid cars becoming available to Canadians. Although these cars are more expensive than their gasoline equivalents, electric cars offer lower running costs and reduced emissions, making them a great option for the environmentally conscious.
The Different Types of Company Cars
Company cars come in all shapes, sizes, and price ranges. Generally, the type of car will depend on the individual’s needs and budget. For example, someone in need of a car for city driving is likely to need a smaller car, like a sedan or a hatchback, while someone looking for something with more power might look into a luxury vehicle, such as an SUV or a truck.
More recently, there’s been an increase in Canadians looking at leasing cars instead of purchasing them. As with buying a car, the costs associated with leasing are still similar but may be more affordable as the monthly payments are usually less. Of course, with leasing comes responsibility—you’ll need to make sure that you return the car in good condition or face penalties—so it’s important to consider whether you’re prepared to meet these conditions. Additionally, leasing may be a good choice for those who are looking to save money on their cars and avoid the hassle of car ownership.
Whatever type of car you decide to go for, the decision should not be taken lightly. Always remember to research thoroughly, take into account all the potential costs, and never underestimate the impact ownership can have on your financial situation. Ultimately, a company car can be a great asset for Canadians—but only if it’s done correctly.
