The Company Car: To Offer or Not to Offer? That is the Question

by Michael Haberman on March 5, 2018 · 0 comments


Having a company car is a nice perk, or is it?

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At any forward-thinking company, management will seemingly attempt to provide employees with as many perks as possible, including the offering of a company car or vehicle fleet.

While this perk will no doubt be popular amongst employees and may make good financial and business sense, some important concerns should be addressed before such a policy goes into effect.

Think your business could benefit from a company car or vehicle fleet? Before taking the plunge, you may want to consider the following pros and cons.

Pro: Controlling Your Company’s Corporate Image

In some business settings, the corporate image being portrayed to the public can be influenced by the types of vehicles employees drive. For example, contractors tend to advertise their company name and contact information, along with details indicating they’re licensed, bonded and/or insured, on their vehicles. Meantime, hiring a high-end car service means you’ll likely be picked up by a town car or limousine.

Truthfully, in the business world, first impressions mean everything. And experts say if your employees spend a great deal of time on the road meeting with clients and/or if your company is a service-based business, maintaining a fleet of newer model, clean and well-maintained vehicles is an effective way to portray and control your message.

Con: Realizing Company Cars Create Newfound Expenses

Beyond refueling these vehicles when the gas tank nears empty, your company must also factor in occasional repair and routine maintenance costs. In addition to regular oil changes and tune-ups, these company cars will also require new parts or tires from time to time.

While certain maintenance expenses will be difficult to avoid, warranties may help alleviate some of the burden. For example, tire manufacturers usually offer a mileage warranty that guarantees you will get a certain number of miles out of each tire.

But if the tires on one or more of your company cars wear out prior to reaching that threshold, the manufacturer may offer a pro-rated refund for the difference in miles. With that in mind, ensure your employees are routinely checking tire air pressure and tread depth.

Pro: Knowing Where Your Employees are at All Times

These days, employers can easily track the whereabouts of their employees through a number of different tools. But to avoid confrontation and unease regarding the personal use of company cars, it’s best to be open and honest about any policies. Thus, if you decide to install some type of tracking system in your company car, transparency should be the name of the game.

Preventing employees from taking advantage of time and resources with a quick trip to the mall or bank after a business appointment is understandable. But, on the other hand, employees who know they will be monitored on the open road could very well discourage some from getting behind the wheel in the first place. Indeed, it becomes a fine line to balance.

Con: Realizing Employees May Balk at the Idea

While employees with older, unreliable vehicles may embrace the idea of a company car, those who own a newer model with plenty of bells and whistles may not be as enthusiastic. Indeed, even if the cars your company purchases come equipped with scores of safety features and a quality stereo system, they may not hold a candle to an employee’s personal vehicle.

To keep hard-working and high-achieving employees content and happy, you may want to occasionally allow exceptions to company car use.

Ultimately, You’ll Need to Weigh This Decision Carefully

Before committing to buying a company car or vehicle fleet to benefit your employees — and taking on the hefty upfront costs of doing so — it’s important to review some pros and cons.

Because while the idea may sound appealing and advantages may begin to pile up in your head, realize there are also some financial and safety concerns that may outweigh these benefits.

By studying these issues head-on — and without any inclination on either side of the fence — you will no doubt be able to make the best business-minded decision for your company.


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