Company car, rip off or worth it?

[Rosamunda]

Why would maintenance cost 5000e ? I thought most new cars have a 3yr warranty. What do you include?

[cressers]

No, calculation is not done like that.

If employer pays, the taxable value of the car is added to your salary, it's a benefit and benefits are taxed in finland

You are then taxed on the higher amount (4000+733). This whole amount is taxed at 33% ( or may even increase your tax to 34%)

They then deduct the agreed payment of 457 or whatever the amount from your salary after tax.

It's better to do private lease if you do enough work KMs as you get 0.42€ per km rather than 0.11€ with company paid car.

I have had now 5 lease cars, hassle free is nice but you pay for it,

If you plan to keep for long time, best to buy used in Germany and avoid as much devaluation as you can.

[riku2]

The employer says the same lease amount would be deducted from his salary

I'm not sure i'd describe the system you explain as a "company car" since you (as the employee) are paying all of the lease price and paying tax on it as well. You are basically leasing a car though a contract setup by your employer. I would call a "company car" one where the employer pays some/all of the lease price (what you call "Benefit of Use lease rate").

My previous employer had a system where they paid between 20% and 50% of the lease price, depending on the emissions, leaving the employee to pick up the rest.

My current employer has a bizarre system a bit like the one you explain where the employee pays the taxable value of the car as a monthly charge instead of the lease price. This seems like the employee paying all of the cost of the car, and the employer has the nerve to limit how much of your own money you can spend (no expensive cars).

personally I gave up the company car and bought a 3.5 year old six cyclinder BMW 5 series from Germany. It parks itself, has blind spot radar, massage seats, heads up display and countless other things that you don't see on any cars in Finland. And all-in it cost 30k euro (price in germany + tax levied in Finland).

[dave071061]

The employer says the same lease amount would be deducted from his salary

I'm not sure i'd describe the system you explain as a "company car" since you (as the employee) are paying all of the lease price and paying tax on it as well. You are basically leasing a car though a contract setup by your employer. I would call a "company car" one where the employer pays some/all of the lease price (what you call "Benefit of Use lease rate").

My previous employer had a system where they paid between 20% and 50% of the lease price, depending on the emissions, leaving the employee to pick up the rest.

My current employer has a bizarre system a bit like the one you explain where the employee pays the taxable value of the car as a monthly charge instead of the lease price. This seems like the employee paying all of the cost of the car, and the employer has the nerve to limit how much of your own money you can spend (no expensive cars).

personally I gave up the company car and bought a 3.5 year old six cyclinder BMW 5 series from Germany. It parks itself, has blind spot radar, massage seats, heads up display and countless other things that you don't see on any cars in Finland. And all-in it cost 30k euro (price in germany + tax levied in Finland).

You are not paying the lease price, you are paying the taxable benefit of use, this is NOT the same thing, I have done budgets for my team in the past where they are paying 4-500 euro per month but the actual lease price is well over 1000 Euro.

You are right however that it is not a full company car, that is a different benefit and then you also get the fuel paid for as well, however the Taxable benefit is also much higher.
If you take a look at New cars in Nettiauto you will see the 2 figures are given.
One thing to note with the Full company car benefit is officially you are limited to 18K private KMs per year and travel back and for to the office is considered private KMs, although not sure how well that has been inforced in the past.

[network_engineer]

Hi,

There are many ways that car benefit (autoetu) function, and any combination of these are possible, and since you refer to the partial benefit, the lease could be structured such that, you could

• either pay the whole lease amount, plus have the taxable value added to their taxable income , e.g. your salary being 100, lease amount being 10, the 10 would be subtracted from your salary, and if the taxable value of the benefit is 5 EUR you would pay taxes on 105, and yet receive 90 - other income taxes
• don't pay any lease amount, and have your total income being taxed including the taxable value of the benefit
• don't pay any lease amount, and taxable value of the benefit reduced from your salary towards the lease
• any other such combination

PS: Be also aware that most companies have some restrictions on cancelling the lease before time and in some cases, you are liable for part of the cancellation costs, if you are responsible for the cancellation. So, e.g. you cannot change jobs. Or then need to request the car benefit changed to the other company if they have such benefits.

The interest rates are quite good, and the servicing costs as well are better nowadays, especially since a number of people started going to Latvia and Estonia. I did the same, when something went wrong in my Volvo (just 2½ years old), and was for some reason not covered in the warranty. I got an initial offer of 1.280 EUR from Bilia, and went ahead did some research, and got a counter offer from Latvia for 480 EUR, all included. Showed it to Bilia, and they matched it right away!

Kind regards.

[vitaliysh]

I also think your interest rate is quite high. I've recently got 1% interest rate deal on new car.

[Querfeldein]

I think riku2 is right: if you receive a "company car", it's an additional benefit that may be taxable (if you also use it for company business, your taxable benefit and hence your tax burden may be reduced).

If your employer lets you buy or lease a car through them, you will have to pay the lease or purchase price, but you will not have to pay extra income tax (unless the cost to you is less than market value, in that case, the difference could probably also be seen as a taxable benefit). But that's not really the normal "company car" model, and unless the discount is significant, it may well be cheaper to just buy a car on your own (in the current market, you will almost certainly pay less than the list price, anyway, and / or get very cheap financing).

[riku2]

I think taking a company car might act as job security for 3 years guaranteed.

No, I was in exactly that situation a year ago in August 2014 with 18 months left on the lease of my company car (where I paid about 30% of the lease price plus taxable value). Our whole team was instantly fired and paid six months instead of notice. The car had 18 months lease left on it and this played no role in the decision about firing me (I was the only one with a company car in the team fired). The company (which has no employees left in finland so there is no point naming it) was obviously a basket case since I heard they had signed a 10 year lease on the office at the start of accepting our team (from Nokia in one of those transfer deals which are quite common). They had to pay off the owners of the building to finish the office lease early.

Companies vary in what happens if you resign from a job and have a company car. some will charge you a penalty unless they (or you) can find somebody to take over the lease, some will allow you to resign without penalties.

Having bought the bmw from germany I wish i'd done this many years ago and not had company lease cars for my first 15 years of living in finland. The options on my car would cost 25k euro in Finland and some companies limit how much you can spend on extras (I would find it incredibly annoying if I'm paying the lease price and somebody tells me how much of my money I'm allowed to spend).

[riku2]

If your employer lets you buy or lease a car through them, you will have to pay the lease or purchase price, but you will not have to pay extra income tax (unless the cost to you is less than market value, in that case, the difference could probably also be seen as a taxable benefit)

When I started work at nokia they paid 25% of the leasing price (leaving me to pay 75%). then they introduced an emissions based scale, so that choosing an efficient model meant they paid 50% and I paid 50%.

In no case was the taxable value adjusted based on what % of the lease price my employer paid. I always paid the full taxable value, so it seems you pay this extra tax regardless of whether your employer pays 25% or 50% of the leasing value. It would seem bizarre that if you pay 100% of the leasing price then you still pay the taxable value as well, but where is the cut off? it's certainly not at 25%

[vitaliysh]

I also think your interest rate is quite high. I've recently got 1% interest rate deal on new car.

I calculated from here... http://www.laakkonen.fi/auto/NJZ-252/ and even Bank rates suggests around 8%. I did the lump-sum 6%.

Can you share which car you bought and from where and how much down payment. As I might be missing lots of things here, your input would help lots of people.

I got Opel Astra Sports Tourer from LansiAuto:

Here is my offer:

Rahoitusesimerkki
Rahoitettava osuus 27 000,00 €
Käteismaksuosuus 3 000,00 € (Downpayment)
Perustamismaksu €
Korko 1.00%
Kuukausierät 72 kk 386,52 € + €
Luottokustannukset 829,38 €
Todellinen vuosikorko 1%

I got exactly same offer for Ford Focus titanium from laakkonen. I just went there and said that I have this nice offer from LansiAuto, but would love to get Ford. Can you match the offer? They did. In the end my wife liked Opel more, so we went with it