Why Drivers & Employers Benefit From Tailored Vehicle Reimbursement Programs

Increasingly, businesses are recognizing the problems with traditional transportation solutions; fixed reimbursement systems, in-house and rental fleets, even most forms of flexible reimbursement are rife with inefficiencies and waste. Fortunately, where there’s a problem, there’s a solution: custom vehicle reimbursement programs utilizing fixed and variable rates in combination. These solutions benefit both sides of the employer/driver equation, creating a more effective solution than any before—research shows such solutions cut costs and improve driver efficiency and satisfaction. Still not convinced? Consider these six ways both sides benefit:

Fair Payment

With a custom vehicle reimbursement program built for your needs, you ensure your drivers receive the reimbursement they deserve; not too much, not too little. By integrating fixed and variable expenses, assessed by a robust database of vehicle prices and depreciation rates, mileage bands, insurance costs, license fees, local taxes, maintenance costs, and every other major factor in determining how much it costs a driver to do their driving on your behalf, you avoid overpaying. You avoid underpaying. Nobody loses out on either side, and no driver has a leg up on any other driver.

Zero-Incentive Reimbursement

When drivers have no incentive to drive, and no incentive to stay off the road, they’re going to take the most efficient, effective route for any given job. You’ll encourage natural efficiency in your drivers, without infuriating them by paying insufficient reimbursement. What other approach can possibly get your drivers going as efficiently as possible without damaging morale? There’s a reason research shows these behavior neutral solutions as unilaterally superior to other transportation programs.


When you misgauge the reimbursement due to a driver, you end up with one of two results: One, you waste money by paying the driver too much, incentivizing them to take more and longer trips than necessary for their job. Two, you underpay your drivers and damage your employer-employee relationship unnecessarily, eventually leading to complaints, high turnover, and the myriad other downsides of mistreating your workforce (even if unintentionally). By choosing a customized solution, built to recognize the specific expenses inherent to your drivers’ transportation needs, you get amazingly accurate, fair payment for every driver. Everyone wins.


Customized smart reimbursement solutions take all the hard work out of your reimbursement plan, leveraging a robust database in combination with a simple online application to produce one of the simplest approaches to reimbursing drivers available. That means less administrative overhead, fewer mistakes and missteps, and a much, much easier time explaining how it all works to your drivers. Convenient, defensible, and extremely accurate; what’s not to like?

Allotment of Liability

With a custom vehicle reimbursement program, you don’t have to own a fleet of vehicles, or rent one, or cover drivers for their every waking moment behind the wheel. You only need to cover their costs when they’re driving on your behalf, and they can drive the cars they want: your liability goes down, they get to use their preferred vehicle and take it home each day, and everyone comes out ahead, happy, and only responsible for themselves. Yet another win/win courtesy of custom vehicle reimbursement programs.

Non-Taxable Reimbursement

A non-taxable reimbursement strategy benefits both the employer and the employee. A reimbursement program that makes used of fixed and variable rates like CarData is designed to meet IRS guidelines while ensuring all travel expenses are reimbursable as non-taxable payments. Drivers’ reimbursements will be excluded from their gross income, and businesses will see cost savings by means of a reduction of FICA payroll taxes.

Want to know more?

If you’re curious about the hard data supporting the use of custom vehicle reimbursement programs, want to know more about the systems involved, or would like to start making the move towards using such a system for your own drivers, check out the CarData Learning Center; it has all the data you’ll need to make an informed decision for you and your drivers.