Does the Company Car Still Work for You?


Some businesses provide employees with a company car as a hiring-and-retention tool. Some do it because company cars also can be viewed as a tactic in their branding strategy, serving as mobile advertising (in the old sense) and to impress customers. Admittedly, offering a company car has helped some businesses achieve those objectives.

However, distinguishing business use vs. personal use has always been a problem for company car programs , especially when a fuel allowance is part of the plan. While precise mileage tracking is possible thanks to advanced technology, fuel consumption is a more difficult data point to pin down.

With company cars, correlating reported mileage against the fuel expensed could be a way to estimate if the fuel actually was used for work, but frequent price changes and regional discrepancies would call for some remarkable math skills. Fact is, it’s difficult to precisely determine personal vs. business fuel consumption, yet as a significant, recurring cost, it’s an important variable to consider when calculating the ROI of your company car program and deciding whether it still works for you.

Other Biz vs. Personal Use Considerations
Do you pay for the car 7 days a week or for 5 days? With a Company Car program the business pays to “own” the car seven days a week, instead of the five business days (or approximately 71% of a week’s time) when the car is used for work. The question becomes, is a business paying for 2 days of personal use?

Let’s consider another factor of vehicles on the road, liability. The liability risk to the company is “baked-in” to company car programs. One of our customers was dealing with exactly these challenges and switched to a FAVR (Fixed and Variable Rate) program as the solution. You can read their case study to get the details.

Eliminate Ambiguity & Leverage Data
CarData FAVR programs take the guesswork out of a Vehicle Reimbursement Program, reduce risk and only “pay” for the car when it’s being productive.
Vehicle profiles are matched to the type of duties required and policies set around vehicle retention, and they offer the added benefit of empowering the driver to use the vehicle they prefer. We also ensure and monitor that drivers have appropriate business use insurance, employees have coverage in case of accident, and the business is not liable. CarData averages fuel prices daily for our customers and uses that data in determining driver reimbursement. And to make sure business mileage is spot-on, CarData’s Mi-Route mileage app leverages GPS tracking to automatically capture mileage, and then pushes the data to the cloud as one part of driver reimbursement and IRS-accountable reporting.

We’ve mentioned data a few times in this post. While perks aimed at attracting top talent and the impact of marketing strategies are valid (although a little fuzzy), the concrete mileage tracking CarData enables, as well as measurable cost reductions, are “actionable data” you can use to make informed business decisions. We also should mention that our annual reviews give you another view into we how the program has helped, and an opportunity to be adjusted to reflect your changing business needs and goals.

We would welcome the opportunity to discuss your VRP and how we could help you move to a plan customized for your needs now and going forward. Just let us know at, 866-550-5188 or on our site!

About CarData Consultants
CarData provides precision vehicle reimbursement programs for the mobile workforce. CarData services save money, reduce risk, and remove administration. CarData programs are compliant with the IRS and the CRA procedures.