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Read moreFor many industries, company cars are a requirement. Utility companies, trucking fleets and government agencies (fire trucks, ambulances, etc.) all may need to provide vehicles to their employees at times for business purposes.
Some companies may also choose to do this as a fringe benefit for their employees; and in this case especially, it’s critical to understand the ramifications. Organizations need to know the ins-and-outs of providing company cars for employee benefits, the tax implications, policy considerations and tips for responsibly—and safely—providing company cars to employees.
As with many aspects of business, there are both benefits and drawbacks of providing company cars for employee use. If a business owner is considering providing company cars, they’ll first need to weigh the pros and cons to ascertain if it is a feasible option or not. Here’s a closer look at a few of the positives and potential pitfalls:
Pros:
Cons:
Most companies will allow employees to not only take company-owned vehicles home, but also use them for personal reasons. In these cases, it’s important for companies to set limits and appropriate policies that spell out how company owned vehicles can and cannot be used.
These policies should be comprehensive, put in writing and signed by employees. Creating personal use of company vehicles policy can seem daunting, but there are publicly available resources and templates that can simplify the task.
Whether the company uses a template or creates its own, any personal use policy should include the following components:
It is essential that all drivers of a company car understand the very specific rules they must follow. As mentioned above, these should be spelled out in a vehicle use policy. These rules should encompass the following:
This is not an exhaustive list, and companies should ensure they have a well-thought out list of rules and limitations that employees must adhere to.
When it comes to providing company cars, there are many factors that must be weighed before a decision is made. If your company has made the decision to offer this benefit, here are some additional considerations to keep in mind:
Providing company cars can be a great benefit for an organization and its employees, but it’s not a decision that should be taken lightly. Taking into consideration all of the potential positives and challenges can help business owners make an informed decision.
For more insights on fleet technology adoption, view our most recent Fleet Tracking Trends Report.
Tags: Cost control, Revenue & ROI
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