Cost of ownership calculations for employer reimbursement

[broncoaz]

I'm going to be using my Lightning Pro as my work vehicle. Unfortunately due to the name matching program the dealer won't let me register it in the name of the company since I'm not an officer of the corporation. I currently have a Chevy 1500 that is 100% paid for by my employer, we are going to calculate an allowance program for my reimbursement and I want to make sure I have everything accounted for. Here is what I have so far:

$46639 MSRP
$2914.94 Sales Tax 6.25%
$500 Dealer doc fee
$275 Title/license fees
$4219.91 Interest on $0 down 48 month loan at 4%, I can probably get 3%
-$7500 Subtract federal incentive
$1000 Accessories (side steps, mud flaps, floor mats, etc)
$2506.85 Excise tax for 4 years
$4260 Auto Insurance for 4 years
$3000 Maintenance, I figured two sets of tires in 100K plus wiper blades and cabin filters annually
$8333 Electricity at 1.8 miles per KWH and 15 cents per KWH for 100K miles
-$18655.60 Residual value at 40% of MSRP
$47494 Total for 4 years
$990 per month needed to cover costs

My current ICE vehicle costs the company about $1500 per month using similar calculations, and is much better equipped than my Pro. I'm not looking to turn a profit, I just want to cover my actual costs and don't want to sell myself short. I will have one shot at this negotiation, and it could be the framework for future employee reimbursement. There will be times I will have to drive my Bronco or my wife's Tacoma for work trips where range is an issue (300+ miles in a single day in winter). I will plan on keeping a company gas card for times I drive my ICE vehicle, mileage reimbursement is out of the question. My assumptions for efficiency may be a bit low, but nobody has owned one of these trucks in winter yet. There will be level 2 charging at the offices, but I know I'll plug in the truck at home nightly regardless of the SOC. My assumptions for maintenance are also a guess, but I figure a heavy truck will be hard on tires. I could probably put the truck on the company fleet management program and take the maintenance out of this equation as it would bill directly. I'm taking a stab in the dark at the 40% residual value. My concern is that these trucks will be like a 2 generation old iphone by 2026, not worth much when there is something newer and shinier out there. Can anyone offer some constructive criticism on my process or specific items? Thanks!

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[besch2410]

I would drop the federal tax portion. That is based on your personal financial situation and not a fixed amount guaranteed by the IRS. If you somehow end up with $0 of taxable income for the year, then you'd get $0 of the incentive. The argument is that your employer is not entitled to any of your tax return when you qualify for some credit, etc. just because they sign your paycheck. The other thing to factor would be if you'll leverage public infrastructure for charging some % of the time. That rate would be something more like $0.40-$0.50/kWh vs. $0.15/kWh. Other than that, it seems like you thought it out quite well.

 

[merek]

$0.625 per mile. There's a lot of thought that goes into that number, and is honestly the most fair number for all involved.

Alternatively, they provide a vehicle in their name, with their insurance, and with their fuel.


I would personally not accept anything short of those two options, and think you are selling yourself short. I am not really sure if any other scheme is legal to be honest, and may have tax implications. I know some people have done it to avoid needing to properly obtain DOT numbers, commercial insurance, etc, but really you should not be accepting that personal liability.

 

[broncoaz]

I would drop the federal tax portion. That is based on your personal financial situation and not a fixed amount guaranteed by the IRS. If you somehow end up with $0 of taxable income for the year, then you'd get $0 of the incentive. The argument is that your employer is not entitled to any of your tax return when you qualify for some credit, etc. just because they sign your paycheck. The other thing to factor would be if you'll leverage public infrastructure for charging some % of the time. That rate would be something more like $0.40-$0.50/kWh vs. $0.15/kWh. Other than that, it seems like you thought it out quite well.

Good points. There is no way our family’s tax liability would be small enough to not collect the $7500. I’m hoping with L2 charging at the offices I can avoid public chargers much of the time.

I realized after the fact that I need to add in the Ford ESP cost to the calculations.

$0.625 per mile. There's a lot of thought that goes into that number, and is honestly the most fair number for all involved.

Alternatively, they provide a vehicle in their name, with their insurance, and with their fuel.


I would personally not accept anything short of those two options, and think you are selling yourself short. I am not really sure if any other scheme is legal to be honest, and may have tax implications. I know some people have done it to avoid needing to properly obtain DOT numbers, commercial insurance, etc, but really you should not be accepting that personal liability.

The current situation before Lightning is a vehicle in their name, with their insurance, and their fuel. If Ford was more flexible with the name match policy I could have the company just buy my Lightning like any other fleet vehicle. We have over 100 vehicles in the fleet with DOT numbers, commercial insurance, etc. The company isn’t trying to take any shortcuts, I’m the fleet manager. I am waiting to hear back from our agent to see if my owned vehicle can be put on the company insurance. I considered selling the Lightning to the company after I’ve owned it long enough to justify collecting the $7500. The only downsides I can see with that is paying sales tax again in the transfer and the company might have a harder time getting a commercial loan on a private party used vehicle.

$0.625 per mile for 25K miles per year ($1302 per month) would still cost the company less than my current work truck, so maybe that is the right way to approach it. I am concerned about my personal tax liability. Another company I worked for they gave us an untaxed car allowance, but it never exceeded my actual expenses so it didn’t cost me.

If I weren’t using the Lightning as my work truck there isn’t a good reason for me to own it. I already have a 2021 Bronco (that I drive ~200 miles per month) and my wife has a 2021 Tacoma. I was actually looking forward to the car allowance program because it would mean I’m getting compensated even if I choose to drive my Bronco sometimes. I have a 8/100K warranty on the Bronco to use up.

 

[broncoaz]

I spoke to the CFO late last week. They are looking at standard mileage reimbursement following all IRS rules to the letter or the company purchasing the vehicle from me second hand at some point and putting it into the fleet. They are not interested in doing a car allowance program of any kind. The mileage reimbursement program would be uncharted territory in the company. On the good side, mileage would be compensated the same regardless of which of my vehicles I drove.

 

[ExCivilian]

That sounds like a much better solution. The only thing I'd say is I doubt you're going to see 50,000 miles out of tires on this truck and won't be able to buy them for $1,500 per set. I'd estimate that $3K in "maintenance" should be closer to $5K.

 

[broncoaz]

That sounds like a much better solution. The only thing I'd say is I doubt you're going to see 50,000 miles out of tires on this truck and won't be able to buy them for $1,500 per set. I'd estimate that $3K in "maintenance" should be closer to $5K.

I‘m figuring 33K on a set of tires due to the weight, so I’d use the stock set plus two more to 100K miles. The factory Michelins don’t appear to be available, but these are good tires for most trucks and on the more expensive side for the size. Wiper blades and cabin filters are about $50 per occurance.

 

[ExCivilian]

I‘m figuring 33K on a set of tires due to the weight, so I’d use the stock set plus two more to 100K miles.

I'd agree with that. I was thinking about 35K, as well. I forgot about the original set

 

[MickeyAO]

Truthfully, if I was able to keep driving the Lightning for as long as I was employed there, I would sell the vehicle to the company. If there is a serious problem down the road, the company would be on the hook for it plus they have to handle the upkeep.

 

[broncoaz]

Truthfully, if I was able to keep driving the Lightning for as long as I was employed there, I would sell the vehicle to the company. If there is a serious problem down the road, the company would be on the hook for it plus they have to handle the upkeep.

Hopefully I’ll be employed there for a long time, it’s a great company. We (I) cycle the vehicles on a 100K mile or 5 year basis. The company wouldn’t still own the Lightning out of extended warranty.

 

[p52Ranch]

Way back in the day I had to provide a personal vehicle to support daily operations for the company I worked for. The company used Runzheimer International to determine our monthly reimbursement. It was a combination of fixed costs and mileage reimbursement. It always calculated out to an amount greater than the IRS mileage reimbursement. I had to keep track of personal and business mileage.

It was the most fair way to have an employee provide a vehicle and get appropriate reimbursement. Runzhiemer has many different vehicle standards that can apply. We were on a standard for something like a Ford Taurus. But they would have plans for pickup trucks, vans, etc.

 

[broncoaz]

Way back in the day I had to provide a personal vehicle to support daily operations for the company I worked for. The company used Runzheimer International to determine our monthly reimbursement. It was a combination of fixed costs and mileage reimbursement. It always calculated out to an amount greater than the IRS mileage reimbursement. I had to keep track of personal and business mileage.

It was the most fair way to have an employee provide a vehicle and get appropriate reimbursement. Runzhiemer has many different vehicle standards that can apply. We were on a standard for something like a Ford Taurus. But they would have plans for pickup trucks, vans, etc.

Interesting. I've never heard of Runzheimer International. I'll look them up.

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