#CompanyCar #PersonalCars #FinancialAdvice #CarOwnership
Congratulations on your husband’s new job and the exciting addition of a company car to your family’s vehicle lineup! It’s understandable that you’re seeking advice on what to do with your personal cars now that you have this new perk. In this article, we’ll explore the various options you have and offer some financial advice to help you make an informed decision.
## Evaluate Your Current Usage
Before making any decisions, it’s important to assess how you currently use your personal cars and how the company car fits into your transportation needs. Consider the following:
– Who primarily uses each personal car?
– Are there any outstanding loan payments or financial obligations tied to the personal cars?
– Do you have a preference for certain features or amenities that the company car may not offer?
– Are there any potential tax implications or benefits related to the company car?
## Option 1: Keep Both Personal Cars
If retaining both of your personal cars seems feasible and practical for your family, there are a few advantages to consider. For example:
– Having multiple cars provides flexibility for each family member’s individual transportation needs.
– It can serve as a backup in case one of the vehicles requires maintenance or repairs.
– If both cars are in good condition and have low mileage, they can retain their value over time.
However, it’s also important to consider the associated expenses of maintaining and insuring multiple vehicles.
## Option 2: Sell or Trade-In One of the Personal Cars
If you’re leaning towards simplifying your vehicle ownership and potentially reducing your expenses, selling or trading in one of your personal cars could be a viable option. Here’s what to consider:
– Selling the 4Runner, which is already paid off, could yield immediate financial returns.
– Trading in the 4Runner or MDX towards a new vehicle could lower your monthly loan payments and interest costs.
However, keep in mind that selling a car privately or trading it in to a dealership may require some effort and negotiation to secure the best value.
## Option 3: Refinance or Pay Off the Remaining Loan
Given that there’s an outstanding loan amount on the MDX, another option is to refinance the loan to potentially lower the interest rate or aim to pay off the remaining balance. This could result in long-term financial benefits by reducing interest costs and eliminating debt.
## Leveraging the Company Car
Since your husband’s company car can be used for personal and family transportation needs, there may be opportunities to leverage it for financial gain or convenience. For example:
– Consider using the company car for longer trips or outings to minimize wear and tear on your personal vehicles.
– Explore whether there are any reimbursement programs or tax deductions associated with using the company car for personal use.
## Seeking Professional Advice
As you navigate this decision-making process, it’s advisable to consult with a financial advisor or tax professional who can provide personalized insights based on your specific circumstances. They can help you weigh the potential financial implications of each option and make an informed decision that aligns with your long-term goals.
In conclusion, having a company car as a part of your husband’s job package presents an opportunity to reevaluate your family’s vehicle ownership and financial strategy. By carefully considering your current usage, exploring various options, and seeking professional advice, you can make a well-informed decision about what to do with your personal cars in light of this new addition. Congratulations again on this exciting milestone, and best of luck in determining the best course of action for your family’s transportation needs! 🚗💼
Sell the MDX.
80k miles on a 4Runner is nothing.
That Jeep will be in the shop often. 🙂
The way to use the company car to your benefit financially is to sell the MDX and you drive the paid off Toyota.. Get rid of the big car payment and insurance bill.
If not ready to do that yet, best you can do is use the company car most of the time, putting the miles and wear on that one, not your own.
It seems excessive because it is excessive. This is basic common sense. Sell the MDX. Use the Jeep for EVERYTHING because it won’t cost you a penny in depreciation, repairs, maintenance etc. This is a huge financial bonus for you, use it wisely.
Remember to keep a mileage log. In the US you are taxed on personal use miles. That includes commuting miles.
I would sell the MDX, but open a dedicated saving account for a new car with the balance of what you get for selling the MDX. If he were to lose his job, switch jobs, or lose the perk, you will probably need another car. Put your monthly payment into that account for the duration of the loan period.
Sell MDX. 4runner will outlast both cars put together and retain the most value.
amazing to me that so many people advise to sell anything given that a job loss also equals losing the company car.
Since literally everyone else seems to be saying sell the mdx, I’ll at least give a counter perspective. Your husband is only at the job for less than a year and if the job doesn’t work out, selling the mdx may mean you need to buy something more expensive to replace it at a much higher interest rate later. I would want some sort of real confidence in the job long term, or in the continued company car benefit before I did something so permanent as sell my car.
If you did need to buy another vehicle, you could sell the 4 runner and bank the proceeds knowing you could buy another one for cash later with minimal additional out of pocket.
But selling the mdx only gives you a small net so you would likely finance something else to replace it later if the time comes at a higher interest rate.
Similar situation and I ended up selling one of our cars that still had a loan on it. Easiest decision once you you see after a few months of one of your vehicles just collecting dust.
If you like to drive the MDX over the 4Runner sell the 4R and payoff the Acura. If there is a chance the company car won’t last more than a couple years hang on to both.
Are you paying taxes on the company car? It may be a taxable income benefit and you’ll be paying mileage on it. Make sure you have the money to pay that.
I would keep the MDX, sell the 4 Runner, and pay off the MDX with the proceeds. I am partial to Honda Motors. I’ve always found the braking to be better than Toyota.
I’d probably sell one. Most people have said to sell the Acura since you still owe on it, but you said that’s what you normally use for family trips so I’d probably keep that. And 3% interest is so low today that I wouldn’t even try to pay it off early (which is hard for me to say because I absolutely hate having a car payment).
If you keep both cars, change your insurance on one of them. A big factor in insurance premiums is the miles driven. If you don’t drive it, insurance is a lot less.
You should read all the fine print on whatever agreement your husband was given. As others noted there can be tax implications for using this company vehicle. You also need to inquire about how maintenance is handled, and if you’re in an accident what your responsibilities are or if you need to add this vehicle to your own policy.
I don’t know what your future looks like, but I wouldn’t rush into selling one of your vehicles until you know how this one will actually pan out, or if the job itself is a role your spouse wants to stay in long term. Also have a plan if the company changes the stipulations around personal use. Can your life support a one car situation?
Just so you are aware, since very few people are mentioning it. Personal use of a company vehicle is taxable compensation. You are supposed to log all miles and purpose of any use of the vehicle and turn it into your employer and then they are supposed to include that in your wages.
Keep one at least. Never know if the job will last. Just a precaution
I’d probably sell the MDX since it will hold more value, then continue “making the payment” to a savings account for the next time he changes jobs or the 4runner starts to really show its age.
The 4runner will definitely last longer than the MDX as well.
I don’t know the details of how this works at your husband’s company, but when I had a company car, all of my personal miles – which I was fully allowed to have – had to be recorded for IRS purposes. Essentially the personal mileage is converted into a “benefit” and is taxed which you pay at some point during the tax year.
Just a heads up – that could exist.
Seems like alot of people want you to sell the MDX. Don’t sell the MDX. The MDX is your car, it is the one (presumably) you are most comfortable driving around. 4Runners have absurd resale value right now and will only net you ~$5k less than the MDX(should be $20-25k depending on options & mileage), and will give you plenty of money to pay off the MDX outright. Sell the 4Runner, pay off the MDX, then put the remainder into a new car fund. Take that $442 you were paying into the MDX and put that into the new car fund. If hubs gets laid off, that’s now your down payment for a new car.
Just don’t sell the 4Runner to a dealer, that will hurt your profits dramatically. You have no need to sell quickly so you can do a private sale that will net you quite a bit more money(probably $2k or more). Go to [cars.com](https://cars.com) and look at 4Runners with similar options and mileage to get an idea of how much it’s worth, then put an ad up for it at the upper end of that range and wait for a buyer.
***EDIT*** As pointed out below, your rate on the MDX may actually be below some HYS accounts and if you can find one, dump the proceeds from the 4runner sale into that and pay the MDX loan monthly for as long as the HYSA’s interest rate remains above the loan APR on the MDX.
We had the company car perk and ended up with an extra car at one point. We kept it for several months because we were thinking we might need it, but truthfully it was difficult to drive it enough to just keep the battery charged and the gas fresh.
Keep the vehicle you like the best and sell the other one. Keep and regularly contribute to a car fund to buy a new one if you need it.
There are a lot of posts suggesting selling the MDX but I’d suggest something different – sell the Toyota to pay off the MDX. Toyota and Acura are about on-par for reliability (Acura being a Honda brand) so the difference will be mileage. The 4Runner could still go for $20k or more and the MDX will require less maintenance.
Definitely sell 1 depreciating car, get rid of the loan, plus reduce registration, insurance, maintenance costs. No brainer
Hold on to at least one of them for when the Grand Cherokee inevitably breaks down.
Keep them both. Pay off the one, but keep both.
My husband has had company cars before and we’ve made the mistake of relying on having those company vehicles. If something changes at work, you’re out a car. They can also track every move you make via GPS when you use it for personal use.
Just to be clear, once you cross the the line of using a company car for personal business, it is considered as taxable income. Failing to report it can get you into a heap of trouble.
Double-check the tax-implications with your husband’s company. Having had company cars in the past, I always had to report personal milage and was taxed on that at income-tax rates, iirc.
If his company doesn’t care, great, but you don’t want to be hit with an unexpectedly higher tax bill if it can be prevented.
Put them on Turo before you sale them and see what kind of money you can generate from them
Sell one car. It actually isn’t that important which one. Use money to pay off car loan and remainder into savings, along with what you were spending on the car loan.
Should husband change jobs again, the money for another car is sitting there and you haven’t been paying interest or running costs for a second car.
There is no financial reason to pay off the MDX loan unless you’re forced to. Completely safe places to park your money earn more than “3ish%” interest these days. If you have $17K in cash, you come out ahead it in a CD and continue to make payments. You can find 5 year CDs that pay >4% interest, and 1 year CDs that exceed 5%. Even HYSA’s exceed 4% at any number of places these days.
If having no debt gives you peace of mind, that’s different, but it’s not the optimal financial move.
What are these jobs that are just giving out cars?
Get rid of the mdx, bank the 400 a month for a while and build up a new car fund
Get rid of the debt, Continue to save the car payment into an account t for the time when you need to replace the other car you can do so with cash. Or for when the company car perk is lost and you need another vehicle quick you can pay cash for one and skip going into debt on things that lose value so quickly.
You’ll save on insurance also by selling a car
I work for an automotive company and have always had one “company car”. We can take additional cars at extremely reduced costs. We always keep one personal car (and just one) and one company car. This saves money overall and gives a bit of a safety net should the job (and access to the company car) change.
Jobs come and go. Personally I would keep both personal vehicles for the foreseeable future.
Keep your cars. Company cars can be taken back at any time. Happened to us. Hubby got use of a car, so we sold his (decent commuter car) and kept mine (the family car). Six months later TPTB decided to cut expenses and got rid of the cars. Hubby had to scramble to find something and bought a crap beater car that died on the road.
Sell one of the two cars and pay off the loan on the MDX. Save $300-400 a month for your car fund. That way if he ever loses his jobs you can buy another.
As for which to sell Acura is a Honda brand. So it is basically Honda vs Toyota and both are very reliable. The Acura has less mileage on it, so it is probably the better fiscal move. However, you are getting a company car and can afford to indulge a little bit. You’ll be driving it so keep the one you would be happier with.
Keep your cars. You can be taxed for personal use of the vehicle, and jobs get lost.
Don’t get rid of your vehicles. If something happens w the job, the jeep goes w it possibly leaving you in a bind. I’d keep your vehicles and drive them occasionally. It’s nice to have well cared for, garage kept, low mileage vehicles to call your own.
Keep them for your personal use. The business vehicle is for business use. As numerous other people have said you get taxed on the benefit of driving a company vehicle for personal reasons so it’s a terrible financial decision to get rid of your personal vehicles and exclusively drive a company car. If you insist on doing this I highly advise you talk to a financial planner or a CPA as this will come back to bite you.