Company car price: what determines the cost of a company car?

What you need to know about the price of a company car

Whether you are self-employed or an employee with a company car, the price is more than just the amount on the invoice. Total cost of ownership, tax treatment, and residual value play a major role. In this guide, you will break down all the elements that determine the final cost.

1. The list price as a starting point

The base price of a company car can be found in the catalog. But the actual purchase price may be lower due to discounts, promotions, or negotiation. Take into account:

• Brand and model: a Volkswagen Transporter has a higher price but also a higher residual value than a Citroën Berlingo.
• Equipment options: air conditioning, navigation, tow bar, and cargo area fittings drive up the price.
• Powertrain: a diesel is often cheaper to run, but an electric vehicle may qualify for subsidies or tax deductions.

2. New or used: what fits your budget?

A new company car offers warranty and lower maintenance costs, but suffers significant depreciation in the first years. A used car can be up to 40% cheaper, but may bring higher repair costs. Also consider that used electric vehicles are becoming an attractive option due to falling battery prices.

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3. Tax costs: what you pay as self-employed or employee

For self-employed individuals, the company car is a business expense. Deductibility varies according to CO2 emissions: from 100% for electric vehicles to a minimum of 40% for fossil fuel models. In addition, you pay road tax and possibly BPM in the Netherlands.

Employees with a company car are faced with the Benefit in Kind (BIK). That is a flat-rate amount added to taxable income. The calculation is based on list price and CO2. An average mid-size car gives a monthly BIK of €150 to €250. That can noticeably reduce your net salary. More about BIK and net salary can be found in our detailed article.

4. Total cost of ownership: the hidden costs

In addition to purchase or leasing, you pay for:

• Fuel or charging: diesel costs on average €0.35 per km, electric €0.07 per km.
• Maintenance and tires: count on €0.05 to €0.12 per km, depending on the type.
• Insurance: comprehensive insurance for a €20,000 company car quickly costs €800 to €1,200 per year.
• Depreciation: the largest cost item for new cars.

For a small diesel van (e.g. Peugeot Partner), total monthly costs are around €500 to €700 excluding VAT, including depreciation over 5 years. A larger model (e.g. Mercedes Vito) easily reaches €900 to €1,100 per month.

5. Seasonal influence: why October is a smart time

Many companies review their fleet in the last quarter. New models are presented at autumn auto shows, which temporarily increases demand for used vehicles. If you want to sell your company car, an appraisal in October can therefore yield a higher price. It can also pay off for buyers: dealers offer extra discounts to meet annual targets.

6. Electric company cars: higher purchase, lower operating costs

Electric vans like the Mercedes eSprinter or Ford E-Transit have a higher list price, but benefit from favorable tax schemes. Deductibility is 100%, and in some regions premiums are available. Moreover, energy costs are lower. Over a 5-year period, total cost of ownership can be comparable or lower than a diesel variant, especially at annual mileages above 20,000 km.

7. Making the right choice

Whether you need a van for deliveries, sales representation, or construction materials, price is only one side of the coin. By factoring in all cost elements and estimating residual value, you get the most out of your investment.

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