using personal car for company use

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Scott3

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#2888973 20-Mar-2022 15:06

Used to use my personal car a lot for work.

Mileage claims were at the IRD rate. (I think it was 74c/km back then).

As an example $360 odd for a Auckland - Rotorua return trip. Had an older corolla with had done over 200,000km at the time. Would do that trip on less than $100 of fuel. Never worked out the the full running costs, but for a small car at the end of it's depreciation curve, I think I was around $200 (tax free) in the win with each of those trips.

I was with state for insurance at the time. They were fine with me using the car in this way as long as I wasn't carrying goods, samples etc. They were fine with papers and a laptop which was pretty much what I carried as a consultant.

Company policy was that personal cars only be used as a last resort. (We were meant to either use the pool cars or taxi's within town, and rental cars for out of town trips), but due to the lucrative nature of personal car use we would mostly just make some excuse why those options were impractical, and run our own cars.

We were required to have our own comprehensive insurance, and all damage was our own responsibility in the first instance, but there was company insurance only for use in the event that private insurance failed to respond to a claim.

Economics of it would have been different if I owned a car that with rapid deprecation (say a near new luxury euro car). Also IRD rates are set every year, so don't yet reflect cira $3/L fuel.

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MichaelNZ

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#2900090 11-Apr-2022 23:46

1101:
- your insurance premiums are much higher, you need to tell the Insurance company the car will be used as a work
vehicle

Commercial vehicle insurance is no more expensive unless your occupation is classed as higher risk. Some years ago it was even cheaper.

I think we are paying about $360 a year per car.

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1101

3054 posts

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#2900300 12-Apr-2022 11:19

MichaelNZ:

Commercial vehicle insurance is no more expensive unless your occupation is classed as higher risk. Some years ago it was even cheaper.

I think we are paying about $360 a year per car.

How many cars ? you may be getting a discount , based on number of cars & other insurance through them .

For a single car, no other insurance
As explained to me by the insurance companies ( I spoke to more than 1)
Costs are higher as the car is used significantly more , ie could be used all through the day
And is greater risk of theft , especially when crims might see tools/goods etc inside

My occupation was deemed higher risk (IT) , due the what MIGHT be carried in the car (risk of theft/break in)
Insurance company I used to use for non work car insurance , wouldn't insure me . So it costs me more

MikeAqua

6895 posts

Uber Geek

#2900327 12-Apr-2022 11:51

I use my car for work a lot. I put about 30,000km per year on the car I use for work and I would guess about half of that mileage is work travel. The IRD rates are supposed to be 79c/km for the first 14,000km and then 27c/km thereafter. I don't track my total work mileage, but I always seem to get paid at the Tier 1 rate. Hopefully payroll are tracking it properly 🙄.

I put my reimbursements into a car account mainly as an exercise in curiosity. They comfortably cover all my RUC, servicing. WOF, rego, and tyre costs. I'm left covering depreciation (not cash) and fuel - which is readily manageable from a cashflow perspective. I think on balance, the allowance is fair.

Edit: I forgot to say, I've discussed this with three insurers (State, Vero and FMG). No issues as long as I'm in the vehicle. I don't have to be driving. That's good, as often on longer distance trips I'll take a co-driver, so we can keep moving. Last week's surprise trip was Blenheim, Nelson, Lyttleton with a tandem trailer to pick up and deliver a spare aux engine to a broken down vessel. Obviously you want to have more than one driver for that little odyssey.

Mike

MichaelNZ

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#2900614 12-Apr-2022 19:05

1101:

How many cars ? you may be getting a discount , based on number of cars & other insurance through them .

For a single car, no other insurance
As explained to me by the insurance companies ( I spoke to more than 1)
Costs are higher as the car is used significantly more , ie could be used all through the day
And is greater risk of theft , especially when crims might see tools/goods etc inside

My occupation was deemed higher risk (IT) , due the what MIGHT be carried in the car (risk of theft/break in)
Insurance company I used to use for non work car insurance , wouldn't insure me . So it costs me more

I'm in IT too. While we may be getting a discount (haven't asked) it won't be much. There is a minimum price to insure a car regardless.

I don't know what you are doing but could be any combination of:

1. Wrong company

2. Wrong people/department at the company

3. The car you want insured

4. Your profile

5. Your location

6. History / risk.

Expect to pay minimum of $500 in Auckland.

I don't know what your cost expectations are... Please give us more info. I also have no idea what you drive. If its something sensible like a Nissan Tiida you will be at the low end. If its a Nissan Skyline then expect to pay more. How much more depends on age. If you are under 25 and want to insure something 'fast' then can't help you...

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K8Toledo

652 posts

Ultimate Geek

#2904612 21-Apr-2022 00:55

1101:

What are your thoughts on being required to use your own car for company(work ) use
ie, use your own car to visit clients, go onsite for jobs etc etc

This is whats expected where I work , and its the way its allways been since day1

Even when you get an allowance for work related miles ....
- your insurance premiums are much higher, you need to tell the Insurance company the car will be used as a work
vehicle
- there is all the extra milage added onto the car .
- any prangs or car damage,scrapes in car parks , its on you(me)

Just asking as my car was broken into while onsite at a clients (it was in a public car park)
So , the cost of repairs is on me . My Boss isnt interested .

So , Im thinking , if it happens again , Ill have to say no more. That will affect my employment .
Any thoughts on this ?

1. -Absolutely not true afaik. Check your policy.

2. -Reimbursed by your employer at 79c /km IRD rate.

3. - Covered by your own comprehensive personal insurance (less excess) as usual.

4. -in that case you must only have 3rd party.

I travel ~1500km per month supporting (my) clients. I charge IRD rates @79c per km.

I've been insured by State for 20 years (personal vehicle) and in that time made four claims, all paid.

Edit-

Anyhow Commercial Vehicle Insurance is offered to employers and business owners.

As you're an employee it's not something you need be concerned with.

MichaelNZ

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#2904624 21-Apr-2022 07:20

Received our renewal notices a few days ago for commercial car insurance. The premiums are as follows:

Car 1 - what I drive / company owned ~$401+GST

Car 2 - my wife's car ~$435+GST

My wife's car is private but needs to be insured as commercial because its my backup. My company car is actually cheaper and its a higher value.

I really don't see the issue.

If you are in Auckland (and possibly other cities), expect to pay more. But this risk loading applies regardless.

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mudguard

1423 posts

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#2904627 21-Apr-2022 07:31

Hmm I'm pretty sure my car costs $1100 pa for my commercial policy. It's about 90% commercial use.

I should get a quote to see what a normal policy would cost.

1101

3054 posts

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#2904786 21-Apr-2022 11:24

K8Toledo:

Edit-

Anyhow Commercial Vehicle Insurance is offered to employers and business owners.

As you're an employee it's not something you need be concerned with.

Based on zero facts :-)

As told to me by 2 insurance companies.....
I have to have commercial insurance as Im using my car for work . Some might just keep using personal , I wont take that risk .
The industry Im in is considered a higher risk , because of what MIGHT be in the car MIGHT make it more of a target for thieves
My insurance costs went up . Thats my insurance costs . I think its now under around the $600 mark, from memory

Others may get better/worse insurance deals : it depends on the type of car, value of car , WHAT INDUSTRY , what other insurance you have : eg lower car premiums as also have house insurance with them

Anyway
My point is
Im taking all the risk of car damage etc . Im out of pocket for car damage (that p7$$ed me off) .
my employer wont re-imburse me for car damage on the job ( damage less than cost of insurance excess )

I realize thats what I signed up for with my job
I shouldnt be out of pocket for car damage on a job that bought in over $1000 , even some partial $ should have been offered by employer .
Thats one reason I gave my notice .

I also realize that I had to be given a free car park for work , since I had to have a car to go to clients sites .
On the other hand, I could never catch as bus/bike to work , as my car was needed.

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