New job with car allowance

Hi there,

I've just been offered a new job and as part of the 'Package' there's a car allowance of £3.5K. The job is Design Director for a mid-sized creative agency. Not sure if it's relevant but the salary before the allowance is £72K plus a 15-30% performance bonus.

I live and work in London, and haven't ever had a car since living here.

What exactly is a car allowance and does it need to be spent on a car? If so, can it be a leased car or do I actually need to buy one?

I appreciate that these are answers that HR could provide but I thought I'd ask here for some impartial advice.

Many thanks