#value of a car
What is the value of a company car?
Q: My company recently decided to eliminate company cars as a perk for any employee. Since they have always maintained that the benefit was “part of my compensation,” I want to ask for a comparable amount of salary increase as a replacement for the loss. I’ve done a substantial amount of research and cannot find any good rules of thumb for determining the value of a company car benefit. How likely am I to get them to simply cover the cost of my monthly car payment on the replacement vehicle? Any ideas on the value of such a benefit?
A: You may not be able to receive the monetary value of your car if the car was a benefit that was not required for you to perform the primary responsibilities of your job. In other words, if you’re a sales representative and you need a car to meet and sell your company products then you may be in a much better position to demand for the value of the car.
However, there is no rule of thumb when it comes to the value of a car. It typically depends on what kind of car your company leases on your behalf. If the standard car for an employee is a mid-sized American car then the value of the car can range from $10K to $18K.
Nevertheless, if your company has decided to eliminate its company car as a company benefit, it could be that they can no longer afford to offer it to their employees. In that case, asking them to adjust your base salary to reflect the loss in your company car may not be worth your while. You may want to consider asking for other noncompensatory benefits such as extra vacation time, tuition reimbursement, or stock options.