tax rate is huge on the car; in about three years you will have paid in tax the equivalent of the purchase price of a new car (if it's a gas-guzzler). It's more like five years if it's gas-efficient. Electric and Dual-fuel cars are exempt from road tax and congestion charges, but not from the taxable benefit. And you'll have to keep on paying it for as long as you get the benefit. Plus, if you lose your job you lose your car; not a very good deal.
If you take an allowance instead, you can buy a car outright. If you're the kind of people who buy a new car every three years, and get yourself a gas-efficient one, then the car benefit's a good idea. On the other hand, if you hold on to the ratty old thing until it dies some ten years later, then the allowance is a better deal.
If you're only here for a year or two, then you might make out ahead with the car benefit, but if you bought a car you could sell it when you go and perhaps come out ahead.
If you're here on an expat package which includes a Tax Equalization package, you're not paying any more tax than you would if you remained back home; so under those circumstances it pays to take the car.
Three years is the break-even point.
