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A company car allowance is a predetermined sum paid to an employee as compensation for driving her own vehicle for business reasons. Companies use car allowances to minimize accounting costs. Once an employee has been allocated a car allowance, that amount is simply added to the employee's paycheck. For example, if the car allowance is $500 per month, this sum is paid to the employee via her paycheck.
Banks and other lenders donât always use common sense when they calculate your income to assess your loan application. Many do not include a company car allowance as part of your income and this may limit the amount you are entitled to borrow.However, there are some lenders that will take a vehicle allowance or company car benefit into account. car allowance is a sum of money given to an employee for the upkeep of their company car. It may be included in their salary as an additional benefit. The money is then used to pay for goods and services related to maintenance of the car. This may include cleaning the car, fuel, inspections and repairs.