There are pros and cons to both company cars and car allowances, and the right option for you will always be based on your individual circumstances and preferences.
With a company car, your employer will buy a car for you to use. As you don’t have to buy the car yourself, you won’t have to worry about it losing value or being tied into a finance agreement. You might also benefit from lower Benefit in Kind taxation, especially if the car has low or zero emissions.
However, you’re unlikely to be able to choose your company car, you won’t ever own it, and you might need to pay an additional fuel benefit if you use it to drive in your personal life too.
A car allowance will typically be added onto your annual salary so that you can buy or lease a car yourself. That means you’re free to choose your dream car (if it’s in budget) and how you pay for it - you could even choose a lease if you like that flexibility.
On the flip side, you’ll be personally liable for making the car finance repayments and covering any running costs. You’ll also likely pay tax on the allowance as it’ll be added to your monthly salary and could push you into a higher tax bracket.