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Company Car Fleet vs. CarData Vehicle Reimbursement Programs

REDUCE COSTS & RISKS

Are your fleet costs rising? Do you feel like you’re in the car business? Are you paying for personal miles? These are just some of the ramifications of providing company cars.

Company Cars are vehicles which are owned or leased by the company. The company assumes all responsibility and risk, and pays for all vehicle related expenses including depreciation, license, insurance, maintenance, accidents and fuel.  Drivers are often permitted to travel home with their vehicle, and use it for personal driving on evenings, weekends and during home-office commute. And regardless of who is driving the vehicle and when it is being driven, the company assumes the risk.

Operating a fleet of company cars is the most expensive of all the business vehicle programs. This is due to the fact that company assets are being utilized both professionally and personally.

When vehicles are not branded with the company logo, there is an opportunity to change and to ‘get out of the car business’. For sales and service workers industry has seen a strong move towards vehicle reimbursement and car allowance programs. The shift away from Company Cars has been motivated by three primary factors:

  • The cost savings available with Vehicle Reimbursement Plans
  • The need to mitigate corporate liability, especially during personal travel.
  • The demand to reduce usage of in-house managerial resources and the administrative expense of managing a fleet of vehicles.

When drivers provide their own vehicles, companies experience an opportunity to be more fiscally fair with their expenses. By reimbursing drivers based on their business use, costs can more accurately be accounted for. This accuracy results in a more efficient allocation of company resources, and a reduction of liability.

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What Our Clients Are Saying

At first, we were reluctant to move away from fleet management. We saw it as an integral part of our corporate culture and also thought of it as recruitment leverage. Unfortunately, after one of our vehicles was involved in a DUI it became clear that the program was simply too risky to maintain. CFO, Oil & Gas Business


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