So I have a 2023 F-150 that is a work/personal use vehicle. It is my only form of transportation and I averaged 20,000 miles a year on it. On my monthly mileage reporting I have to separate personal from business miles and then I get a certain amount take out of my paycheck. This works out to $5,000 a year. However I do not pay for gas, maintenance, tolls, etc. I know it is still a deal compared to what most people pay for a vehicle, it just seems awful high for something I don't own.
Edit: just for some clarity I've had coworkers who also have company vehicles and they don't claim their personal mileage accurately. The yearly amount they owe is significantly less.
Is $5,000 a year for a company vehicle too much?
byu/mtbguy1981 inFrugal
Posted by mtbguy1981
22 Comments
I pay 20k a year to drive a subcompact SUV so…. No
Not having deal with maintenance, gas, car insurance, etc.. I think you are on a pretty sweet deal. You could always buy a junker for 5k and then use that. Eventually you’d come out ahead, but then you are responsible for insurance, gas, maintenance, tires, etc. it all adds up majorly.
A newer f150 from the lot is probably 40k. If you had to get an equal vehicle it’d be 700-800 a month on car payments alone if you don’t do a massive deposit.
Class 10 cca rate is 30% so….. no. 😊
I would rather have the use of a car than own the car any day of the week.
I’ve never been in this situation and don’t know where you are located, but what I can say is that $416 ($5,000÷12) is more than what I pay for my own car for gas, insurance, and the bit I stash away for repairs each month. My car isn’t as new and is owned out right, but I would still not label your situation as “not paying for gas” or “a better deal than most”. You’re essentially renting a car until you’re no longer employed with them.
I could be totally wrong depending on where you live though. I’d wager that in some states this is a steal.
I mean, are you putting 100 personal miles on it? Or 15,000?
Big difference.
What’s the value of the truck? If it’s a basic F150 it’s probably $40,000 depending on condition and mileage. A car loan for that type of vehicle is $680-880/month. On the low end that’s $8160 a year just to drive it.
If you want to work toward owning a vehicle put the extra $3160 you’re saving a year into a high yield savings account.
Well, why don’t you spend $30k on a 2023 F150, and then pay for a year’s worth of gas, maintenance, tolls, etc., and let us know whether $5k to use the car for a year is a good deal.
A vehicle is a quickly depreciating pile of rust. The payment/ depreciation and insurance alone would cost you more than $400 a month For a $25k car. Add gas/ maintenance/ unexpected repairs. It would cost you $600+ a month to drive your own newer low cost vehicle. The only way you could possibly save money is if you keep a low cost vehicle 10+ years.
Given $2.80/gal national average gas price and 20k miles. Even if we ignore the truck’s awful MPGs and pick an average car with 25mpg – that would work out to $2400 in gas alone. Given its a newer car maintenance is minimal and few $100 at best. IDK what you use in tolls but lets say that’s worth another couple $100. Is insurance part of the deal? Because that’s easily another ~$1500 or so. Plus not making payments on your own car / eating depreciation is also worth a nice chunk.
TL;DR is that $5k/yr – or $416/mo for an all-inclusive lease is absolute peanuts. For comparison – per LeaseHackr, a Corolla costs $299/mo to lease, and you’re still on the hook for all those other ownership costs.
What vehicle would you get instead? Find out how much insurance and fuel would cost on your hypothetical vehicle. Those two costs alone may equal $5k annually
Also to consider: if you’re planning any long road trips, the math might change a bit
Is there an option to downgrade? You’re paying that much since the car is newer.
My current lease is $3k down, $352 /mo, 10k miles a year for 36 months.
Recent purchase of a brand new 2026 car. You can kinda use this to reference your company vehicle
How often do you report the mileage? Bi-weekly? Monthly? Quarterly?
Does your job track the places you go to via an app or reports? If not, I would under report the personal miles driven. Not by a ton, but if you average 1,660 miles a month for personal, then I’d start reporting about 1,300/month for personal miles instead & see what happens.
If they track then there’s nothing to be done. $5k/year in mileage is a good deal, considering you don’t need to pay for gas/taxes/insurance/tolls.
I would start trying to loop in personal stuff to work stuff also. Like if I have to go to a job site, I’m gonna swing by the grocery store or the mall or whatever, on the way home & call that all work travel. I wouldn’t bother with figuring out the miles from home to the grocery store & separate that out, but that’s just me.
You maybe used nearly $3k worth of gas to drive 20k miles, and the insurance would be another $2k. You might be making a grand or two or more per year in saved maintenance and tolls alone.
And you have no depreciation, which is itself a real cost. If I buy a $30k car and 2 years later sell it for $20k, I’ve just spent $5k per year just to own it (ignoring other costs), same as you’re doing. I don’t expect you’ll drive a company car into the ground to the end of its depreciation curve, so this cost will remain relevant as your company car gets replaced for something newer over the years.
You’re getting a good deal.
That works out to $0.25 a mile. Pretty good for fuel, insurance, and maintenance on a full size truck.
I drive a fully depreciated car with liability only insurance. Including Gas, Insurance, Tolls, Maintenance, Taxes. 2022 – $2470, 2023 – $2525, 2024 – $1689, 2025 – $3417. 2025 was my most expensive year I needed tires, a battery, valve cover gasket, a starter and some suspension work. Other years I’ve needed next to nothing. I’m averaging $2,500 a year spent. Your saving money vs a new or gently used car, sure. But is it the most frugal option possible, no.
I’d say it’s a steal considering just insurance alone would be that cost if not more. Cars are a depreciating asset so you can’t invest in one.
Looking at some math.
Assuming 20mpg at $3 a gallon you’re looking at $3000 a year on just gas.
If you were to buy this exact same truck, and keep it for 7 years, then sell it, you’d expect the car to be worth 17.5k less than when you bought it. Or about $2,500 a year.
We haven’t touched maintenance, tolls, insurance, etc. And all of this is presumably pre-tax.
So maybe you can buy an old beater, but getting the above under 2 grand a year seems like a task.
Maybe if your work allows you to log miles and get reimbursed in your own car, the math could work out.
Who reports actual mileage?? put down 500ish every quarter…
I put 50,000 miles on a used suburban I purchased last year for $1,000. I have replaced the tires, the starter, the turbodiesel, and now am having the gas tank cleaned out and replacing fuel filters and pumps. My total spend on this thing is $4,400 so far, minus the cost of normal things like gas. All of it is a tax write-off because it’s a business vehicle.
Yes-ish. That’s most of a car payment.
Go buy a cheap used Prius. You’ll spend less than that on something pre-2012 and it’ll likely last more than a year. And less on gas.
I’m a car guy and a bike guy and I still daily drive a Prius and a minivan. My hobby stays a *hobby* not a necessity (to repair the daily driver project in time for work/etc).
But if you’d buy a truck or something else high maintenance, expensive insurance, low mpg, then I would stick with the fleet vehicle.