By on July 12, 2016

2016 Chevrolet Impala V6-008

An anonymous GM employee writes:

I have a field role with General Motors that affords me the luxury of driving (mostly) anything in The General’s portfolio. I can choose from any brand except Cadillac, and can’t drive a Corvette or pickup (because of retail demand and limited supply). I’m 22 with student debt down into the low four digits. GM pays for gas, insurance, and incidentals like oil changes and winter tires because I need a car to do my job. I live in a snow-heavy state where I’m expected to do around 30,000 miles a year for business travel alone. Finally, I switch out cars every four months because that means it remains eligible for new vehicle incentives and programs when it’s sold back to the dealer at a big discount.

Here’s the catch: the vehicle is considered a taxable benefit.

For example, a 2016 Yukon Denali would add $10,000 in taxable income to my W2. By contrast, a Cruze Premier would be closer to $3,000. Based on state and federal taxes, the difference is between paying an extra $1,000 in taxes for the Cruze vs. $3,000 for the Yukon Denali.

On one hand, the frugal side of me says to go with the Cruze. On the other, the car enthusiast in me thinks it would be cool to drive around a top-tier GM product at the sweet age of 22 on the cheap (relatively, anyway), and that I should have something comfortable to drive given the amount of travel I do. I’m constrained by what dealers have on-ground, but am inclined towards a Regal, Camaro (might be painful over distances), Malibu Premier, or the Yukon SLT.

What should I get?

This is just further proof to me that I absolutely need to get hired by an OEM. How great is this benefit? It’s gonna be huge. The greatest benefit ever! Strong! When I become an OEM executive, I’ll get rid of that tax problem! Sad!

Sorry, I got carried away there. Anyway, this sounds like a fantastic opportunity for you to cycle through some of the General’s offerings and figure out what it is you like. Best of all, if you don’t like something, you’re only stuck with it for a third of a year.

There are a couple of things to figure out before you plunge head first into a Yukon SLT. Take a look at your effective tax rate and make sure that this benefit won’t kick you into a new tax bracket. Sounds like you’re figuring on an overall hit of around 33 percent on state and federal, but if this extra $10,000 a year kicks you up from the 25 percent to the 33-percent federal bracket (just as an example), then it’s a larger impact than you’d like it to be, because that added part of your new income will be taxed in that higher bracket.

As far as the car recommendation is concerned, I’m going to strongly recommend that you don’t get a Cruze for that amount of driving. The seats in the Cruze are notoriously uncomfortable for longer stretches of driving. I also hesitate to recommend a Camaro, simply because of the visibility issues that you’ll encounter. It truly is like driving something out of the panzer division. The NVH levels inside of a Camaro SS won’t be particularly enjoyable over long hauls, either. But, with summer upon us, a 2.0-liter turbo Camaro convertible might be a fun mode of transportation from July-September.

I know you weren’t able to tell me the location of your specific “snow climate,” but if it’s an urban area like Chicago or Detroit, I wouldn’t recommend driving the Yukon. I’ve done it in Manhattan. It wasn’t a great experience, to say the least. Parking that mofo anywhere outside of the RenCen garage won’t be a treat, either.

The Regal is a cool, understated, Q ship of a car. I’ve enjoyed driving them in the past, and I think that when you are my age (38 and counting), that will be an excellent choice. I think at the age of 22, you’ve probably signed yourself up to be involuntarily celibate if your date sees you in a Buick. So I’m gonna say no to that.

I don’t have a single mile behind the wheel of the new Malibu, so I can’t say much about whether that’s a good option. (Tim has some seat time in the new ‘Bu though, and he liked it.) However, I think that there’s a very strong option if you want a Chevy sedan, and that’s the Impala. I would rock a V6 LTZ Impala every day of the week, and twice on Sundays. I love everything about the Impala — the motor, the driving position, the interior, the stereo, even the fuel economy. If I were in your shoes, that would be the car I’d park in my driveway for the next four months and beyond.

However, there’s one car that you omitted from your verboten list, and that’s the Chevrolet SS. If the SS is on the list of cars you can get (which it might not be due to limited production), then this discussion is completely over. A manual transmission, magnetic-suspension SS is a car that is simply not to be trifled with. You’ll be faster than 95 percent of the cars on the road and do it in relative luxury. Get yours in red and be the envy of everybody you know. Then, invite your friend Bark to come to a review of it.

[Image: © 2015 Alex Dykes/The Truth About Cars]

Questions for your ol’ buddy Bark? You know where to send them. E-mail me at [email protected], find me on the Twitters at @barkm302, or send me a picture (if you’re not a dude) on Instagram

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141 Comments on “Ask Bark: Is The General’s Benefit Worth the Pain in the Tax?...”


  • avatar
    PrincipalDan

    2.0T Malibu LTZ, pretty sleek and modern looking.

    If you want your passengers to be impressed with the amount of rear seat legroom, go with the Impala LTZ V6.

    • 0 avatar
      Paragon

      Dan, IMHO, you nailed it with the first comment. For me, I think the Regal or Verano might be OK. Notice I said for me. And, haven’t yet driven the new Cruze to see if it’s better, worse, or about the same as before.

  • avatar
    JimZ

    If you have the opportunity, take the time to actually sit inside the various cars/trucks for more than a few seconds. if you’re going to be doing a lot of driving as part of this job, as Bark mentioned seat comfort is going to be the “make-or-break” attribute. when I had an SRT-4 (with the “Viper” seats) I could spend all day driving that car. But the Mustang GT which replaced it… well, as fun as that car was to drive, I had no trouble parting with it because I couldn’t tolerate more than 45 minutes in its seat.

  • avatar
    CrapBox

    Get a Spark and invest your savings in TYO.

  • avatar
    jmo

    ” but if this extra $10,000 a year kicks you up from the 25 percent to the 33-percent federal bracket (just as an example)”

    Just an FYI the 25% bracket goes from $37,650 to $91,150 of AGI and 28% takes you to $190.150.

    I would also add that GM has budgeted your position to include the value of the car perk. If you go with the Cruze that’s just extra money in GM’s pocket.

    • 0 avatar

      Thanks for clarifying. I forgot that there was a 28%.

      • 0 avatar
        JimZ

        but thank you for correctly describing how marginal taxation works. You don’t know how many people think your *overall* tax rate jumps from e.g. 25 to 33% when you move up a bracket.

        • 0 avatar
          PeriSoft

          ” You don’t know how many people think your *overall* tax rate jumps from e.g. 25 to 33% when you move up a bracket.”

          Oh, god. It’s bad. I start to twitch every time I see the word ‘bracket’.

          • 0 avatar
            Nick 2012

            All excellent points, and it’s really worth running the numbers to confirm you have the extra cash to pay that at year-end.

            I’ve known people who don’t fully appreciate that taxable income can be substantially greater than the actual cash they’ve received, and TurboTax is left to convey the news that their W-2 income bears no relation to the tax bill at the end of the year.

          • 0 avatar
            Lou_BC

            It might be a good idea for the fellow to make a list of vehicles and their associated taxation and pay a tax consultant to give him some advice.

            How much does it cost for you to pay taxes as opposed to fuel, maintenance, insurance, tires, and payments on a vehicle?
            I don’t see a downside if taxes cost less than the above mentioned costs.

          • 0 avatar
            duffman13

            @lou_bc

            >It might be a good idea for the fellow to make a list of vehicles and their associated taxation and pay a tax consultant to give him some advice.

            >How much does it cost for you to pay taxes as opposed to fuel, maintenance, insurance, tires, and payments on a vehicle?

            There isn’t a universe where he gets away with paying less for a vehicle he’s putting 30k a year on than he’s getting just in tax on even the Yukon.

            At 22 driving that kind of mileage, his insurance would be at least $300/month. A lease payment allowing that kind of mileage even on a Cruze is going to be roughly equal to the 5 year car payment ie another $3-400. Times 12, that’s $8400 in post-tax income. For the Cruze. Not including the incidentals covered like maintenance and winter tires.

            The $3k in extra tax annually to drive a Yukon instead is a bargain in comparison, assuming they don’t up his compensation if he declined the “free” car since it’s coming out of the his take-home pay.

          • 0 avatar
            Lou_BC

            @duffman13 – I’m not familiar enough with USA tax laws to give any advice other than to get professional advice. Even here in Canada I’d say the same thing. The guy sounds like he wants to save as much money as possible which is wise but that needs to weighted against having to buy that vehicle yourself.

            My brother has almost always had a company truck. Once he moved into a management role he has been allowed to take it home and use it for personal use. He has to claim personal use and he finds the extra taxation is markedly less than having to buy even a sh!tbox for commuting.

  • avatar
    CoreyDL

    First, a question: Women would really judge a man for turning up in a Regal GS? They’re sharp in white or red, especially with those big wheels.

    Anyway, if you’ve got [most of] the GM portfolio available to you, and a lot of winter driving miles – you need something comfortable. And ponderous driving in a Tahoe doesn’t sound too good.

    I mean ideally, you’d have a portfolio of stylish Oldsmobiles available to you with trims like Regency and Elite.

    AWD Regal GS.

    • 0 avatar
      zamoti

      I’m thinking if a girl is going to turn her nose up at a Buick, they’ll do the same to a Chevy. As such, I say go Buick, something big and mushy to eat up the miles. Why not a LaCrosse? They do come in brown…

      • 0 avatar
        CoreyDL

        That’s what I was thinking. If she’s aware enough not to like a sporty Tri-Shield, she ain’t gonna like that Gold Bowtie.

        The interior confinement of the gigantic LaCrosse puts me off, so I’d skip it. Plus I think it’s ugly.

        • 0 avatar

          I second the vote for the Regal. However, the LacCrosse would be a good option…and keep in mind that he might be getting the all-new one, with better looks and a better interior.

    • 0 avatar
      smartascii

      I just dropped in to say that if the person you’re interested in dating decides that they’re not interested in dating you because of the *brand new car* you’re driving, maybe you should become interested in dating someone else.

      • 0 avatar
        dal20402

        Pretty much. Any woman who would think a Regal GS (or, for that matter, a well-maintained 2008 Cobalt) isn’t good enough is a woman you want to keep far, far away.

        Sensible women may judge your car for being dirty, poorly maintained, or so old it’s falling apart. Women who judge it for not being exotic or fancy enough are bad news.

        • 0 avatar

          Bad news women are exactly who a 22-year-old should be looking for.

          • 0 avatar
            28-Cars-Later

            Certainly one who enjoys child support and possibly even alimony.

          • 0 avatar
            FreedMike

            I ain’t saying she’s a gold digger…I don’t see her messing with no broke…broke…

          • 0 avatar
            dal20402

            Even when I was 22 I didn’t have time for that crap. And it’s not a problem to get laid without dealing with it.

          • 0 avatar
            Paragon

            Bark, do you mean for the entertainment value? Of course that depends on what your definition of “entertainment” is. I think we all know that typically the bad news women have the trait of being superficial. Thus, he is wise to get what is best for him, not the young ladies. Unless he really enjoys lots of drama.

        • 0 avatar
          KixStart

          dal20402: “Pretty much. Any woman who would think a Regal GS (or, for that matter, a well-maintained 2008 Cobalt) isn’t good enough is a woman you want to keep far, far away. Sensible women may judge your car for being dirty, poorly maintained, or so old it’s falling apart. Women who judge it for not being exotic or fancy enough are bad news.”

          +1
          Farago once said, you don’t want to date a woman who wants to date you because of your car.

          But it costs nothing to keep your car clean and any car that’s clean is more impressive than a car filled with McD’s trash.

          It may also make an impression on his employer or anyone he comes across in the field to have a dirty car.

      • 0 avatar
        Felix Hoenikker

        Agreed,
        Marry the ‘bro, not the ho!

    • 0 avatar
      JimZ

      “Women would really judge a man for turning up in a Regal GS?”

      no, it’s just something insecure guys tell themselves to justify why they don’t like a car.

    • 0 avatar
      Maymar

      Yeah, I don’t get how Regal = voluntary celibacy, but Impala (nice car, but the official ride of middle-aged guys who wear pleated khaki shorts with white socks pulled all the way up) is going to get delightful women of questionable morals excited?

      • 0 avatar
        Kevin Jaeger

        I have to agree. If you can’t get any action while driving a brand new Regal GS, well, you’re problem isn’t the car and a Chevrolet won’t be the solution to it.

        Personally, in this situation I think I’d alternate between a Camaro and a Regal GS. Maybe try an Impala or Lacrosse just for a change but the Camaro and Regal would be the top choices for me. The General has a pretty big lineup but not much appeals to me.

    • 0 avatar
      JohnTaurus_3.0_AX4N

      I agree, Corey. Make mine red, please. And, good point about Olds. How about a PLC based on the Zeta, Delta 88 Royale, and a budget (compared to Camaro’s insane pricing) sport/luxury coupe based on Alpha, Cutlass Supreme?

      In the winter, I would get something different like a GMC Canyon 4X4 diesel (they do 4wd diesel, don’t they?). Make it a crew cab, get a nice one (crew cab likely provides the best ride quality, while giving you a back seat in which you can throw your stuff).

      Beats the hell out of a Equinox or Traverse IMO. Not as cumbersome as the larger truck/SUVs (as mentioned about Tahoe/Yukon above). Still a tough, durable truck, and you could always go with the V-6 if you preferred it. If the back end gets too tail happy, throw some weight back there, but I had no trouble getting around in an unloaded 4wd Ranger 4.0L SuperCab in the snow (inc. mountain passes).

      I’d at least check one out. Too bad GM doesn’t offer a truck-based midsize SUV here anymore, that would be a more ideal winter choice. I’d totally rock a new TrailBlazer that they sell elsewhere.

      • 0 avatar
        Paragon

        I like your idea, too, John. Because we all know real men drive pick-ups. I’m being sarcastic and speaking of generalist stereotypes, not in any way trying to be being insensitive. And, frankly, having looked at GMs mid-sized pick-ups, I think that’s all the truck most of us need unless we are a contractor. Seems for quite a few years now, drivers of full-size pick-ups are trying to convey the image of Billy Big-rigger, semi truck driver.

    • 0 avatar
      formula m

      I would go with the new GMC Acadia SLT or Denail. They are smaller now, will ride above average and you can actually use the back seat to have sex. Leather seats clean up easily after you help a young woman discover her gspot.
      Keep the 3rd row folded down so there is plenty of room to always have your golf clubs in the back

  • avatar

    If you can get the SS…get the SS. And a set of Blizzaks for the snow.

    • 0 avatar
      minivanman

      Don’t bother with Blizzaks for the SS. It still would not be a great choice for winter weather. Just switch to an AWD Regal GS (with Blizzaks) for the winter months.

      • 0 avatar

        I drove a G8 GT with Blizzaks for a winter. It was fine.

        • 0 avatar
          danio3834

          A Challenger R/T super track pack does fine in 8″ of snow with Toyo Observes.

          RWD and snow!? OH NOES!

        • 0 avatar
          dal20402

          I took my G8 GXP into the snow twice on the crap stock RS/As. Yes, they were slippery and it wasn’t really fun. No, it wasn’t particularly worse than any other car would be on the same tires. The long wheelbase and progressive clutch were really helpful. With snow tires it would have been fine.

      • 0 avatar
        phreshone

        Exactly… He’s gonna be changing cars with the seasons. get the SS now, and move to an AWD car in the fall and winter… sport it up again in spring…

        He just need help picking a car, he needs help building a car schedule…

    • 0 avatar
      Scoutdude

      Bizzaks are at the bottom of the pack nowadays plus they are commonly square instead of round. Since he gets a new vehicle every 4 months so that the vehicle can still be retailed with “low miles” get a AWD/4wd vehicle for the winter months when snow is highly likely and then get something sporty for the non-winter months.

  • avatar
    Toad

    Don’t let the tax tail wag the income & benefits dog. You are one of the VERY few people who get to choose which brand new car you get to drive every four months so take advantage of it while it lasts! You get to go through cars and fuel like Leonardo DiCaprio goes through women (and fuel); it would be foolish not to take advantage of that perk.

    Drive the nicest, fastest, largest, thirstiest vehicles GM will let you get away with. And don’t bitch about the taxes you pay; not so long ago those taxes bailed out your employer.

    • 0 avatar
      jkross22

      Yep, drive as many cars as you can. Make a list of the ones you’re most interested in and just go down the list. SS, Yukon, Volt, Regal GS jump out just because they’re interesting vehicles.

      I wouldn’t let tax implications direct you away from enjoying this unique benefit.

    • 0 avatar
      bills79jeep

      Had a tax prof that always said, “Never turn down a dollar because you have to pay $0.25 tax on it.” This is interesting because he isn’t getting the dollar in his pocket, but still has to pay the man.

      • 0 avatar
        FreedMike

        He’s getting it indirectly, though – the use of a top of the line car for a rock bottom price. How much would, say, the lease on a Yukon be versus his tax bill for driving it? Hundreds more, I’d think.

        • 0 avatar
          bills79jeep

          Only he can know if the value he derives from driving a sweet Regal turbo is worth the dollar cost.

          While it’s not the same, it’s sort of like being given an extremely valuable piece of property and then having to sell it to pay the taxes. Here, I’d assume he can afford the additional taxes or he wouldn’t be asking the question.

          • 0 avatar
            gasser

            If GM is considering part of this benefit as non cash income, shouldn’t careful mileage records allow a deduction from this for business expenses? Since he can’t drive a non GM car, I think that a case can be made for a high business to non- business use. Its all in the details, but an extra $4K on the W2 might be reasonable, but an extra $10 K ???? Ask a good tax accountant with experience in this area.

      • 0 avatar
        JimZ

        “This is interesting because he isn’t getting the dollar in his pocket, but still has to pay the man.”

        the dollar in his pocket is the one he’s not spending on a car payment.

  • avatar
    Land Ark

    You won’t be able to get a manual SS – they don’t exist right now. I would assume their journey from Aussie-land would preclude them anyway.

    But, this is a good time to point out that there are SEVERAL new 2016 SSes listed for sale for ~$38k.
    I feel foolish for not having gotten one.

    • 0 avatar
      ajla

      “there are SEVERAL new 2016 SSes listed for sale for ~$38k.”

      Oh man. Why did you have to post this?

    • 0 avatar
      smartascii

      “You won’t be able to get a manual SS – they don’t exist right now.” Uhh…

      Autotrader shows 43 new ones for sale nationwide. Some of those listings are doubtless automatics posted incorrectly. But all the ones with pictures on the first page are actual manuals. So, you know, they very much exist. And are for sale. To the first person with $39,576 at a dealer in Lake Forest, IL, if you want the cheapest one.

      • 0 avatar
        dal20402

        Probably 25-30 of those 40 are allocated to customers already, and it’s impossible to order a new one at the moment, so they are slim pickings.

        But if you want one badly enough to pay to ship it, deal with whatever dealer happens to have one, and take whatever color and configuration is out there, yes, you can still get one.

      • 0 avatar
        Land Ark

        I meant that in the context of the subject of the article, but I figured someone would point out that they actually exist. But, I doubt GM is going to go around pulling existing stock off dealer lots in other areas to give to their traveling employees.

        I don’t believe they are sending any more 2016s over – though I could be 100% wrong about that.

        • 0 avatar
          dal20402

          2017 will be the last year. Expect the order window for the 2017 SS to open pretty soon. If it’s like past years, you’ll order in August and expect to receive your SS in January or February.

          Damn, if I weren’t about to spend everything I have and a lot more buying a house in this crazy, nation-leading Seattle market, I’d be tempted to trade the LS for one, even though I sold its predecessor to get the LS. It seems even more desirable now that the end is near.

          • 0 avatar
            Land Ark

            I have no excuse. I could sell a couple things and comfortably make it work.
            Hell, this is only $1000 more than a new Accord Touring.

          • 0 avatar
            jack4x

            It is currently impossible to purchase a new 2016 SS as well. GM issued a stop sale on them last week for a seatbelt recall. We were able to take delivery of ours just at the buzzer. A lot of upset buyers hoping to take advantage of the 20% off MSRP incentive from GM and now in limbo with cars that they can’t buy.

          • 0 avatar
            87 Morgan

            Jack4x. I was told today that I can buy the SS w/ the 20% discount. I can’t take delivery though until the recall work is completed.

            MT’s are very slim findings at this point. A fair amount of auto’s left though. At 39k, even with an auto, it is tough to pass this deal up. I have two dealers working on my trade now.

          • 0 avatar
            jack4x

            87,

            Good luck to you. We had an adventure to find ours, with a couple local dealers trying to trade for them, and people flying in from out of town buying the cars from under us sight unseen. Ended up driving 3 hrs away to find the closest 6 speed available and buying it for $37k just before the deal ended (maybe they have extended it?). If you manage to get one, you won’t regret it….the only downside is taking it easy until the break-in miles are finished! Fabulous car, and an amazing value compared to paying $31k for my G8 GT in 2008.

          • 0 avatar
            pb35

            I just made my first service appointment for my 2015 SS. I’m getting water in the cabin, drivers side floor. Fun! Apparently, there’s a TSB for the AC drain hose. Hopefully that’s it.

            I will do my best to enjoy my Cruze/Suburban for the week (they’re a little slow).

  • avatar
    redliner

    The Malibu and Impala sit in a sweet spot of low cost/decent quality.

    If I where you, this would be a no brainier, especially since fuel is included… GMC Yukon all the way, extra costs or not. Preferably on smaller wheels for the best possible ride.

  • avatar
    JimZ

    “This is just further proof to me that I absolutely need to get hired by an OEM.”

    takes a lot more than that to get a car as part of your compensation. Except for field positions where driving to external sites is part of the job, the best you can get as a manager below VP level is a discounted lease (which you still have to pay monthly.) If you’re not management, then you get to file an expense report for mileage.

    • 0 avatar
      jmo

      Is the discount a taxable benefit?

      • 0 avatar
        danio3834

        “Is the discount a taxable benefit?”

        We recently went through this battle and it was determined after a fight that it was not. With CRA anyway. IRS might think different.

    • 0 avatar
      highdesertcat

      There are many other employers, not in the automotive field, who provide a vehicle of the employee’s choice (within reason) in order for them to do their job.

      To wit: years ago when my best friend worked for a federal government contractor, he was required to drive a company pickup truck. But the choice of which was his.

      So, based on my experience with my 1988 Silverado 350, he chose a Silverado and his employer told him to go to the local dealership, pick one out, and they would pay for it.

      They did, and every three years he got a brand new one, for as long as he worked there.

      Pharma sales also provide unlimited mileage lease vehicles to their sales people. My daughter-in-law was a Pharma sales rep for many years. The employee picks what they want, the company picks up the cost of everything.

      • 0 avatar
        seth1065

        High desert ,
        That perk is being replace by a auto allowance, less hassles for corp and no ins liability, my last dig I got $750 and could expense fuel.

        As for OP 30k is a ton of mileage , get something w good seats, I would go w the impala , I am not a SUV guy but GM make some good ones, you do not have deal w gas so go that way if you want, and folks he will roll in what ever tires are on the car.

        • 0 avatar
          highdesertcat

          seth1065, thanks. I haven’t been keeping up with employer-provided vehicles.

          In my area there are a lot of government contractors. Many of their employees drive either an employer-owned vehicle with the company logo on the doors, OR they drive a company-leased vehicle.

          The logo on the doors happened after 9/11.

          My daughter-in-law currently works for the SSA and she gets to use their government motor-pool vehicles whenever she has to travel short distances. Quite a selection to choose from.

  • avatar
    kefkafloyd

    “There are a couple of things to figure out before you plunge head first into a Yukon SLT. Take a look at your effective tax rate and make sure that this benefit won’t kick you into a new tax bracket. Sounds like you’re figuring on an overall hit of around 33 percent on state and federal, but if this extra $10,000 a year kicks you up from the 25 percent to the 33-percent federal bracket (just as an example), then it’s a larger impact than you’d like it to be, because that added part of your new income will be taxed in that higher bracket.”

    Bark, you’re a lot of things, but a tax attorney is not one of them (at least, you’ve never mentioned being an accountant before in any of the articles I’ve read). If you have, then I apologize, and i’m not trying to impugn you personally, but I would be very careful giving out this kind of advice if you are not. I would recommend that this person speak to an accountant ASAP.

    Part of company cars is that the non-business portion is considered a taxable benefit. If he is using this car for business purposes (as many people with company cars do) the business portion of the car does not count against his taxable fringe benefit. He should figure out his split of personal mileage vs. business mileage and start keeping records and again consult a tax attorney. This will affect how much he is actually liable for a fringe benefit. Large companies will help figure this out based on the records you should be keeping as an employee who travels for business anyway. If he used it for 100% business purposes then he wouldn’t take a hit, but that never happens.

    Second, the fringe benefit taxes that he would pay for his non-business use would be so far lower than an actual car payment that the difference of an extra $2000 withheld over the course of a year would be a deal anyone would take considering he isn’t making a car payment every month. Over 26 paychecks that’s $76 extra a check withheld for company car, which is not a lot at all. Even if that fringe benefit income goes into a higher bracket, his non-fringe tax liability would not go up unless it affects other credits or deductions he may qualify for.

    The TL:DR is figure out the personal business split estimate, pick out a car or two, and TALK TO AN ACCOUNTANT.

    • 0 avatar
      VoGo

      +1

    • 0 avatar

      You’re absolutely right—not a tax expert. Thanks for chiming in.

    • 0 avatar
      FreedMike

      Good point, didn’t know that only the personal mileage would be taxable.

      Well done, sir!

      Sounds to me like I’d want to do this for sure, then. I mean, what’s the tax hit on 10,000 miles a year versus the payment for an expensive car? I’d have to think the tax hit would be a LOT cheaper.

      I wonder if a Chevy SS is on his list of possibles…HMMM….

      • 0 avatar
        kefkafloyd

        Also, I am not an accountant either, but I do file my own schedule C on top of my day job (W2 income) for my art/photo business. I’ve flirted with danger enough that I always refer to “my guy” whenever I have tax questions because his hourly fee is worth a lot more to me than time struggling with the IRS.

        Consider the cost of a car year-long isn’t just payments, but insurance, wear-n-tear, and so on. If you work for a company that offers a company car (my employer does for certain employees who have to go on-site for training and repairs, which is not me), it is almost always more advantageous for you to take the company car and the tax hit as it will almost certainly cost you less in terms of real dollars than your yearly TCO for owning your own car.

    • 0 avatar
      Steve Lynch

      Only GM would screw their field people like that.

      Here is how real car companies do it:

      Add a couple of hundreds dollars per month as income designated as company car benefit and then adjust employees regular income upward so no tax is owed.

      I have had $65,000 field cars and never paid a dime.

      I also think theses cars were designated as “test” vehicles.

    • 0 avatar
      mtunofun

      I have a company car and i also put on 30k miles a year. 3/4 of that is personal (lots of trips to disneyland and yosemite hell yeah!). Last year my personal mileage income was only $3000 (taxed at whatever bracket i fall in). However I still make out ahead because i don’t have to worry about a car payment, depreciation, maintainence, insurance and fuel. I also get to pick any car I want as long as it’s a base model Ford Fusion lol.

      • 0 avatar
        Paragon

        According to one of my co-workers with a recent Fusion, the base model Fusion should be more than adequate for most people. Though I haven’t driven it nor even ridden in it.

  • avatar
    eggsalad

    I suggest something AWD for all that winter driving. GM is practically giving away Encores right now – it’s not a bad ride, nicer than a Cruze.

  • avatar
    jmo

    Also, are you sure taxes are due on the entire value of the perk? My understanding is that taxes would only be due on the portion of miles that are for personal use*.

    * Obviously consult a trusted CPA and/or GM HR before making any decisions.

  • avatar
    Pch101

    “For example, a 2016 Yukon Denali would add $10,000 in taxable income to my W2. By contrast, a Cruze Premier would be closer to $3,000. Based on state and federal taxes, the difference is between paying an extra $1,000 in taxes for the Cruze vs. $3,000 for the Yukon Denali.”

    I wouldn’t pay an extra $167 per month to drive a Denali, but that’s me.

    • 0 avatar
      FreedMike

      Lots of real nice stuff he could choose from, though…a Chevy SS comes to mind. Maybe a top of the line LaCrosse? I could live with either very easily.

  • avatar
    APaGttH

    …However, there’s one car that you omitted from your verboten list, and that’s the Chevrolet SS. If the SS is on the list of cars you can get (which it might not be due to limited production), then this discussion is completely over. A manual transmission, magnetic-suspension SS is a car that is simply not to be trifled with. You’ll be faster than 95 percent of the cars on the road and do it in relative luxury…

    One other plus as he cycles cars every 4 months, just pick one out in the 4 months the weather is nice.

  • avatar
    danio3834

    Welcome to the wonderful world of company cars! Protip: as mentioned already, only the personal portion of the mileage is taxable. Report accordingly, keep/generate fuel receipts to match your desired patterns and padded trips. Ask a veteran in your office how they do it.

  • avatar
    olddavid

    This is what the old “demo program” has devolved into? On your next contract negotiate a runner clause that pays an extra bonus based on the cost of your driver. It can be quietly added and should be based on a round number – say $50,000 – to allow flexibility to your choices. Or go completely corporate and buy a car or find a heads up dealer to write you a cost-net in house lease and take the depreciation and mileage away from the General. I am assuming you’re a zone service or sales rep. I am impressed you youngsters are already thinking this way. It took me five years to completely get my head around the fact they were paying me the kind of money I earned. In the 1970′-’80s many of my peers working in deposit banking weren’t making the money I was. Of course it all had to come to a crashing conclusion, but I am guessing that many are back to making more on their annual bonus than yearly salary. Good luck to you. It is a fun profession once you get the wheels greased.

  • avatar
    FreedMike

    My recommendation?

    Top of the line LaCrosse. Damn nice car.

  • avatar
    Fred

    As an old guy close to retirement I know I’d have another $100,000 minimum in my fund if I hadn’t spent it on cars. Besides we are talking about GM cars so other than size there is not a lot to consider. Probably a Malibu or a Cruze.

  • avatar
    danio3834

    No Cadillacs, eh? You’d think they’d want more of those out on the street. Though not necessarily at the auction in 6 months…

    I know, I’d be rocking a Camaro SS. Company insurance, gas…tires…

  • avatar
    Kendahl

    GM has already figured the benefit of the company car to be part of your compensation package. Driving anything cheaper than the top of the line just puts more money in GM’s pocket. If you are a car guy, they are giving you a golden opportunity to drive three different, cool vehicles every year, mostly at their expense. Talk to a CPA to learn how much it will cost you and how to keep the necessary records. If you don’t care that much, pick something mid-priced but comfortable. You are earning enough that you don’t need to limit yourself to something cheap and nasty.

  • avatar
    John

    As if your average 22 year old female knows the difference between a Regal and a Malibu…..

  • avatar
    FreedMike

    Or…how ’bout he sign up for an Envision and tell us how it is?

    (Assuming, of course, Big Brother in the IT department isn’t snooping on what he posts on his own time…)

  • avatar
    Scoutdude

    That is my understanding as well. Back when I worked for a large corp that provided me with a vehicle I would put the personal use miles on my weekly expense report and they would deduct that from my pay, at the then current federal mileage rate. That meant that I had no taxable benefit from using the company provided vehicle for personal use. I do know that if I worked at the office instead of in the field I would have been responsible for the commuting miles to and from the office. However since I was a field rep and went directly to my first call every day except for the monthly meetings, to pickup supplies, or to pickup my boss for ride a longs. Now that was many moons ago but I think it still holds true that your use of a company vehicle for company purposes is not taxable.

  • avatar
    Big Al from Oz

    Buy a Chev SS. Don’t drive it often. The SS will most likely appreciate in value. If you can’t get a huge discount I’d do that.

    As the daily driver buy a Colorado diesel dual cab 4×4. This can be used for most anything you want from shopping to fishing and camping on the beach drinking beer, even driving in icy and snowy conditions.

    • 0 avatar
      VoGo

      I don’t think you read the article.

      • 0 avatar
        Big Al from Oz

        VoGo,
        This story is just that, a story.

        The reality if the guy wants to be some hot shot exec at a major vehicle manufacturers and he’s asking such a stupid fncking questions makes you wonder if he’ll get the job at all.

        How hard is it to work out what vehicle you want?? Most of these “Ask Bark” can’t be for real ……… if they are, this explains the many vehicle accidents on the road.

        This ain’t rocket science.

      • 0 avatar
        Scoutdude

        And why would Al decide to read an article today and even if he did read it what makes you think he would understand it.

        • 0 avatar
          Big Al from Oz

          Scoutdude,
          You are 50% correct.

          The problem I have is TTAC loading on my computer. It crashes the computer with some Adobe crap. I can’t seem to fix it.

          So, this limits my time and my ability to read article and proof read what I submit. This problem is a compounding issue caused by very poor software on TTAC’s side and a poor service provide.

          My computer just crashed again with a “Shockwave Flash” and Reload caution. This occurs every fncking time I use TTAC. So I’ll now finish this, shut down my computer, go back to TTAC, spend ten minutes waiting for my log in to work and quickly submit/paste this comment I must copy.

          And some of you wonder why I’m irritable when using TTAC, especially when all that use and work for TTAC realise there is issues with what ever software they are using. Notifying TTAC to rectify the problem goes no where, it can’t, TTAC needs a new site made.

          I’ve even noticed that the speed in which TTAC operates is also based on the author, so how well are the authors complying to the protocols in using Word Press? I used to use TC Templates in conjunction with Word and Corel, two systems mashed together. TTAC operations remind of those days.

          TTAC is a cheap site that could be far greater than what it is. Except who ever owns TTAC are just cheap tight asses.

          TTAC needs to modernise it’s site. Then I would start off in a better mood.

          As for your dislike for me ………………. I don’t seem to take TTAC as serious as some of you guys.

          THIS IS ENTERTAINMENT, not serious. I find it amazing how seriously many take this site. How can you enjoy yourself when you are taking issues so seriously.

          Write what you believe in or your negative asides towards me, as is usual. But in a few minutes I’ll be having a shave and going to work, with serious issues to contend with.

          You are only text on my screen. A virtual “thing” that doesn’t value add to my life or even day, you are entertainment.

          Now, to the story. This guys conundrums are a normal day to day problem. Business owners and even people given any type of capital gain must work through these types of problems.

          It’s not hard.

          Like any purchase, work out how much you can afford, irrespective of how you arrive at that figure, then blow it on what you want and also need.

          If this is to hard, then see an accountant.

          I can’t believe this guy expects to be some sort of exec at a major vehicle manufacturer. So how real is this character?

          • 0 avatar
            Scoutdude

            Again you need to read, it was Bark who said “This is just further proof to me that I absolutely need to get hired by an OEM. How great is this benefit? It’s gonna be huge. The greatest benefit ever! Strong! When I become an OEM executive, I’ll get rid of that tax problem! Sad!” Not the 22 year old kid who has a real question of whether the additional tax burden of one of the more expensive cars is worth it.

          • 0 avatar
            VoGo

            Big Al.
            If you are unable to read the article, or can’t be bothered, then your posts really aren’t adding to the conversation.

          • 0 avatar
            Pch101

            It doesn’t really help to respond in writing to someone who is only semi-illiterate on his best days.

            Just scroll past BAFO and ignore him.

          • 0 avatar
            Lou_BC

            Pch101 – “Just scroll past BAFO and ignore him.”

            That is like saying “avoid the baboon cage” when going to the zoo.

          • 0 avatar
            Kenmore

            Lou, his posts are like seeing dinosaur coprolites in a museum. You can’t help but stare. The SIZE!

            GAKK!! I just saw a photo of a ceremonial knife handle made from one (looks South Asian). Super Ewwwww

          • 0 avatar
            Lou_BC

            Kenmore – LOL

          • 0 avatar
            JimZ

            @VoGo

            “Big Al.
            If you are unable to read the article, or can’t be bothered, then your posts really aren’t adding to the conversation.”

            may I condense your comment to be more accurate?

            “Big Al.
            your posts really aren’t adding to the conversation.”

  • avatar
    jim brewer

    How much do you guys think it costs to run a car, anyway?

    A $10,000 auto benefit works out to maybe $3300 net cost, state and federal. If you think it’s a serious discussion, you should be an Uber driver.

    Take the nicest car they will give you, every, single, time.

  • avatar
    KixStart

    Both the Yukon Denali and a Cruze provide transportation. The Yukon does it at a cost to you of $3K and the Cruze does it at a cost to you of $1K.

    Knowing now what I wish I had known then, I’d go with the Cruze. Although someone suggested an AWD vehicle for the winter months, which is probably a good idea (not Yukon, get the Equinox).

    • 0 avatar
      Scoutdude

      Of course if you are 22 you will find ways to spend that extra $166 a month so the question becomes is driving the Yukon worth more than spending $166 per month on something else. I’d say if you are spending a good chunk of your day in it then spending a small tax hit is worth it to have something you are comfortable in and isn’t a chore to drive is probably worth it.

      Yes the old people around here are probably saying that they wish they had spent their money a little more wisely when they were 22 but if some old guy told you that when you were 22 would you have listened?

      • 0 avatar
        KixStart

        My ’08 Corolla has enough headroom and legroom to suit me, offers a comfortable seat, is reasonably quiet and the shorter height means that the shorter wheelbase still offers a comfortable ride. Upgrading to a Yukon would buy what, exactly?

        I could think of quite a few ways to spend $166 each month that would actually make a difference in comfort, enjoyment or time to retirement.

        At his age, $166/month available for actual dates would probably be a plus. An extra $166/month might help rent a better apartment. For the year’s $2,000, he could take a trip to Europe.

        Given the alternatives, I might have considered them.

  • avatar
    Arthur Dailey

    The letter writer exemplifies the very reason why the Toronado, Riviera and/or Wildcat and Aurora existed.

    There was a time when most companies followed hierarchies regarding company vehicles. I knew of at least 2 corporations who in the mid-80’s still posted/maintained regulations on what make of vehicle the company would supply based on where the employee was in the organizational chart. CEO = Cadillac. It followed the GM’s old brand strategy to a ‘T’.

    For a 22 year old single guy any one of the above would be considered high status and a luxury drive just below the unobtainable Cadillac. If he were a lower level employee another PLC such as a Monte Carlo, Grand Prix, Cutlass or Regal depending on his standing in the organization.

    And from the mid 60’s until the mid 80’s those types of vehicles were still most acceptable on the ‘dating scene’. Particularly if you were able to get the “tuck and roll’ interior.

  • avatar
    dartman

    FWIW-I think young man is confused on the tax implications; he should only be paying tax on the personal use of the vehicle not the whole value. He doesn’t own the vehicle, title is still held by GM; is that correct? In my business we provide vehicles for sales people and they self report monthly their personal miles. The average tax hit per month is seldom more than $50 – $60 for similar annual mileages (30k-50k) for vehicles with an average cost of $35-$45k…YMMV

  • avatar
    SnarkyRichard

    What no Hellcat ! Quit that place and get a real job – BTSR .

  • avatar
    ccttac

    This is not as exciting a suggestion as those above but I think you should use the program to help build your career. Since you get something new every 4 months or so drive lots of different stuff – cars, trucks, SUVs, big little, loaded, base, Chevy, GMC, Buick, etc. And, learn as much as you possibly can about each one. That way you can discuss your employers products with some first hand knowledge and possibly offer some insights that someone will listen to. My experience in several industries is that an eager employee who is enthusiastic about the company’s products has a great chance for promotion and increased responsibility.

  • avatar
    seanx37

    The Malibu for some reason seems to be the exact same price as the Cruise. For much more car. If the tax is your concern, get the loaded Malibu. It is surprisingly nice for the money(and here in the Detroit area, they are practically giving them away. A relative just leased a Premier in some sort of brown-ish color. For less than $200 a month with $500 down.)

    But if you want to spend a wee bit more in taxes, get the Impala. Really quite a lot of car for the money. Or since it is summer, get that Cascada or whatever it is called.

  • avatar
    mchan1

    Anon should just enjoy the use of the company vehicle.

    “Don’t let the tax tail wag the dog!” is the statement I’ve advised to many people who literally make… um… Stupid… decisions based almost entirely on taxes!

    re taxable benefits.
    Best thing his tax accountant would do (ask how I know?) is ask to see the employment/benefit papers that were signed to get an idea on how GM calculates the taxable benefit (hint… personal usage). GM’s been doing for years so does anyone think that an auto company would Not know how it’s done?

    Generally, when a company, like GM, taxes you on a taxable benefit, withholdings should be taken out related to the ‘imputed income’ from the auto inclusion.

    Anon is in a good position in that he appears to be:
    1. Making a decent salary [but as a sales person hence the 30k mile travel]
    2. Given a company car which can be rotated every 4 months and can choose almost any GM vehicle
    3. Paid a decent salary to be in the 25/28% range

    Remember that the tax rate is based on one’s Taxable income NOT gross income.
    If you’re in the 25/28% tax rate, consider your salary and benefits and ENJOY IT.
    Consider this… would you rather make $50,000 or $150,000 in salary?

    DO.NOT.EVER.COMPLAIN when you’re making money!

    There are people who would LOVE to make that type of income to be in THAT tax range, esp. when they are starting out at 22 yrs old when many may NOT have a job!

    Give any one a few years to earn that type of money even with lots of business travel (as it’ll give you time to contribute to the company’s retirement plan!) and the opportunity to flip through lots of new vehicles as a company benefit ;)

  • avatar
    burgersandbeer

    If you are switching cars as often as every four months, try as much as you can. No need to stress over making a perfect choice the first time through; think of a top three. After your first year you might have to chose more carefully if there are still several models you want to try, depending on how much longer you expect to keep that benefit.

    Since it is only a four month commitment, a Camaro SS is a must in the summer. I think poor visibility and some noise can be forgiven if it’s only four months.

    I wouldn’t get a Denali just because you can. As Bark said in so many words, a vehicle that size is miserable in the wrong environment.

  • avatar
    George B

    The GM employee is going to be driving 30,000 miles a year, 10,000 miles per car, as part of his job. I’d treat it like buying good quality comfortable clothes for work. Start with something comfortable and fairly neutral like the Impala with the option to pick something different in 4 months. He can change the car and his wardrobe to match the job requirements as he gains on-the-job experience.

    Not many 22 year old guys get to transport women in a new car that gets replaced by another new car every 4 months. I’m guessing that new car smell plus great job with 3 new cars a year will make a positive impression even if that new car is a Buick.

  • avatar
    Sid SB

    GM picking up the gas and insurance, makes the SS a standout. The LS3 needs the fossil juice big time, but with free gas, not your problem. Winter tires would be a must have with an RWD in the snow belt (I would think, he says in sunny Cali).

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