For some businesses, company vehicles serve a variety of purposes. They can be used for business travel, transport inventory or materials, or providing a service to customers. In some cases, company vehicles may also be used for personal use, such as commuting to and from work.
However, there are typically restrictions on how company vehicles can be used for personal use. Employees may be required to reimburse the company for any personal use of the car. For instance, an employee who uses a company car for commuting may be required to reimburse the company for the cost of gas and wear and tear on the vehicle.
While company vehicles offer companies and their worker’s many perks, there are cons and challenges to providing employees with company vehicles. Here are some of the most common issues:
The cost of purchasing, maintaining, and insuring company vehicles can be expensive. Depending on the size of the fleet and the type of vehicles, there can be a significant financial investment involved. In addition, there are ongoing costs associated with fuel, maintenance, and insurance.
It is essential to carefully consider the costs before deciding to provide company vehicles. In some cases, it may be more cost-effective to provide a stipend or allowance that employees can use to cover their own transportation costs. Alternatively, there may be ways to reduce costs by choosing less expensive vehicles or negotiating better rates with suppliers.
For example, a company that provides its employees with fuel-efficient cars may save money on gas costs. A business that purchases vehicles in bulk may be able to negotiate a discount with the supplier. The same goes for company vehicle repairs.
Repairing company vehicles can be a significant expense for businesses. To help offset vehicle maintenance costs, some firms require employees to reimburse the company for any personal use of the vehicle. For instance, an employee who uses a company car for commuting may be required to reimburse the company for the cost of gas and wear and tear on the vehicle.
All company vehicles need regular maintenance for them to stay in good condition. This includes regular tune-ups, oil changes, and tire rotations. Depending on the type of vehicle, there may also be other required maintenance, such as replacing the battery or air filter.
Maintaining company vehicles can be a time-consuming and expensive task for businesses. In some cases, it may be more cost-effective to outsource the maintenance of company vehicles to a third-party vendor. However, it is essential to carefully research any vendor before hiring them.
For example, you invested in Subaru vehicles for your employees. It only makes sense that you find certified mechanics to repair your Subaru vehicles. This way, they can offer your required maintenance and repairs and any other needed services specific to your vehicles.
Get quotes from multiple vendors and read online reviews. Ask for references from businesses who used the vendor in the past.
When a business provides employees with company vehicles, the business becomes liable for any accidents or injuries they incurred while the employee is driving the car. Usually, employees often feel pressure to meet deadlines or quotas, so they take risks while driving. In addition, business owners are often held responsible for the actions of their employees while they are on the job.
According to reports, employers spend an average of $60 billion yearly due to work-related car crashes. This includes accidents while the employee is driving for work-related purposes and personal use. It is essential to have strict rules and policies regarding company vehicles.
For example, employees should be prohibited from using their phones while driving and required to follow all traffic laws. It is also a good idea to require employees to undergo driver safety training. This can help them learn how to safely operate company vehicles and avoid accidents.
Additionally, businesses should have insurance policies in place that cover employees while they are driving company vehicles. This can help protect the business from liability in the event of an accident.
Policies and Procedures
When businesses provide company vehicles to their employees, it is essential to have strict policies and procedures regarding the use of the cars. Employees should be required to sign a policy agreement that outlines the rules and regulations for operating the vehicle.
This should state that employees are responsible for obeying all traffic laws and following any other company policies regarding the use of company vehicles. Employees should also be required to reimburse the company for any personal use of the vehicle.
It is also a good idea to have a tracking device installed on company vehicles. This can help businesses track the vehicle’s location and ensure that employees are using it for work-related purposes. Tracking devices can also help companies to monitor employee driving habits and identify any safety issues that need to be addressed.
Providing company vehicles to employees can be a great perk that helps attract and retain talent. However, it is essential to be aware of the challenges of maintaining company vehicles. By carefully researching vendors, having insurance in place, and implementing strict policies and procedures, businesses can help protect themselves from increased liability and other challenges associated with providing company vehicles to their employees.