Company car or car allowance? Find the best fit for your business

June 01, 2022

Business woman on the phone in a work taxi

Choosing between a company car or car allowance is a tough decision.

Yet, either way, companies and employees will face rising fuel prices and unpredictable maintenance costs. And that’s why the best choice for your team’s business travel could be neither. 

This article will help you find the best fit for your team’s work rides and reveal why you should look beyond the company cars vs car allowance debate.

Is a company car worth it?

A company car can be an excellent incentive for employees. But, like personal cars, they come with many expenses. 

On top of the price of the vehicle, you have to handle fuel, repairs, taxes, and insurance, to name a few. Parking is rarely free, too. 

Then there’s the environmental issue. 

Almost six out of ten new cars sold in Europe are registered for corporate travel. And 87% of those cars have petrol or diesel engines — which isn’t good news for our planet.

Going electric will make your travel policy more sustainable and show that you’re a business conscious of its environmental impact. But that doesn’t solve the problem of congestion. Instead, you could give your employees the means to use their own vehicles for work by paying them a car allowance.

What is a car allowance?

Employers pay a car allowance to employees for using their personal cars as part of their job. The car allowance can cover fuel, parking, and maintenance. It can even go towards buying a new car. 

For employees, a car allowance means they can: 

  • Sell the car at any time;
  • Choose the make and model;
  • Keep the vehicle if they leave the company.

And as a business, you won’t need to maintain a fleet of company cars or upgrade vehicles every few years. 

How does a car allowance work?

Many companies add a car allowance to an employee’s annual salary. They can then decide how to spend the money — whether it’s to cover fuel, insurance, or other running costs. 

The vehicle is their responsibility, and a car allowance means they must use it for their business trips. 

Company car or car allowance?

Investing in a fleet of company cars means handling fuel, insurance, and services. You’ll also need to replace the vehicles every few years. So while company cars have been popular for several years, it makes sense to explore alternatives.

A car allowance is one option and allows you to pass the responsibilities of vehicle ownership on to your employees. But it’s tough to track spending and measure usage. And even if you did, you’d be better off spending your time on other tasks. 

It’s also important to remember that not everyone holds a driving licence. And this shouldn’t get in the way of hiring the best person for the job. By only offering a company car or car allowance as an employee perk, you’re limiting who you can employ.

Business travel is moving beyond company cars and car allowance

Owning and maintaining a fleet of company vehicles has never been more expensive. This is why companies are turning to dedicated ground travel management services like Bolt Business.

Bolt Business gives your team an affordable, safe, and reliable way to travel for work. You won’t have to deal with the hassles of owning a vehicle, and admins have complete control over how the team can travel from the Bolt Business dashboard:

  • Set spending limits for teams and individuals;
  • Schedule trips up to 15 days in advance with Ride Booker;
  • Save your team the hassle of filling out expenses with automated ride reports.

Anyone you add to your Bolt Business account can take work rides with Bolt and charge them to the company. They’ll see your company listed as a payment method in their Bolt app and won’t be able to spend more than you allow.

Plus, you’ll be making your business plan more sustainable as all Bolt Business rides in Europe are carbon-neutral. Your team can make their trips greener by choosing an electric vehicle or hopping on one of our climate-positive e-scooters — perfect for shorter work trips during the warmer months.

Manage company work rides with Bolt Business

The company car or car allowance debate is outdated. Business travel is moving forward, and your company can too with Bolt Business.

Bolt Business is the best way to manage your team’s work rides by giving you: 

  • Automated ride reports;
  • Complete control and visibility of all journeys;
  • A way to travel in 45 countries across Europe and Africa.

Contact our team for more information on the affordable, safe, and environmentally-friendly alternatives to company cars and car allowances.


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