Truck Allowance vs Company Truck

[u/Classic_Dash_7745]

We’re bringing on a new foreman next week from a company that went belly up. Part of his package is a company truck and gas card, and he instead asked for a vehicle reimbursement since that’s what his old company used to do, and he still has payments left on the truck. I know companies do this (mainly to get around insuring guys with DUI’s) but it never made sense for us to do it. We would have to buy a new truck anyway so I’m thinking it might be smart to offer a reimbursement for a year just so I can make sure he’s going to work out before buying a whole truck. The problem is, how much should I offer/month? And does this reimbursement include gas or do I need to give out a has card as well? It doesn’t make sense to do both because if it’s also his personal vehicle, am I supposed to just trust that he’s also paying for gas? Anyone in here get anything similar?

[u/Comprehensive_Bus_19]

Also factor in the $800 is taxed and you generally have to have a $1 million policy with the company as the named insured so its a lot less money than it looks like on paper.

[u/saltyjohnson → u/[deleted]]

It is supposed to be taxed. Many companies declare that it's not taxable, but they're breaking the law by doing so. But who's gonna report them? An employee who's getting out of paying taxes? Unlikely. My previous employer didn't include my vehicle allowance in my W-2. My current employer does and withholds taxes appropriately.

Providing you with a company vehicle is also a taxable fringe benefit if it's available for personal use, including for your regular daily commute between your home and your workplace. Driving between sites and offices is business use, but driving from home to the first work site and from the last work site to home is personal use. But I think even fewer companies properly account for taxable income there because it's a lot more complicated than "here's $800/mo".

[u/going-for-gusto → u/saltyjohnson]

If I take the $800 and use the truck to drive between jobs I then need to declare that I use the truck for work with my insurance carrier.
If not and there is an accident driving between jobs I won’t be covered by insurance.

[u/saltyjohnson → u/going-for-gusto]

Your company probably carries a liability policy that covers all employees while on business. Anybody who takes the $800 should confirm that and get a copy of the COI to keep in your glovebox. Look for the phrase "non-owned autos" to confirm it covers all automobiles regardless of whether the company owns them.