4 benefits of purchasing or leasing company cars

Purchasing or leasing company cars can offer several potential benefits for employers: 

1. Improved productivity

Employees often rely on personal vehicles, rideshares or public transportation for work-related travel, which can be less convenient and may incur personal mileage costs or require scheduling. 

If you provide company cars, employees have direct access to a vehicle for work purposes, which can save time, reduce logistical hurdles and prevent adding mileage to their personal vehicles.

2. Enhanced employee satisfaction

A company car is an extra perk that may show employees you value their efforts. Providing them can demonstrate you care about their safety and comfort, which can potentially lead to increased employee satisfaction.

3. Strengthened brand identity

When you purchase or lease company cars, you can often add your logo and contact information using stickers called decals. This can strengthen your brand identity and create awareness for pedestrians or drivers who pass the vehicle.

4. Increased sustainability

If sustainability is a core value of your organization, you can use company cars to reach your goals. For example, instead of requiring team members to rent vehicles that fall below your fuel-efficiency standards, you can provide electric or hybrid models.

Considerations when choosing a company car

When choosing a vehicle, consider balancing cost with functionality and brand image. Consider these factors:

• Purpose: Think about how you want employees to use their company cars. High-end sedans may be well-suited for executives, while employees who complete deliveries may prefer vans. 
• Maintenance requirements: Factor in the cost of maintenance and how it affects the cost of your company car program or increases downtime.
• Comfort and technology: Select navigation options, ergonomic seating, hands-free connectivity and other features for comfort and functionality.
• Fuel efficiency: Research the vehicle’s miles per gallon (MPG) rating. Fuel-efficient vehicles generally cost less to operate, and they can also help you reach your company’s sustainability goals. 
• Safety ratings: Choose vehicles with high safety ratings and features, such as advanced restraint systems, adaptive cruise control or blind spot detection.

5 best practices for managing a company car program

No matter which type of vehicle you choose, setting clear guidelines regarding maintenance, safety and acceptable use can be helpful. You might also include this information in your employee handbook.

Consider these steps when creating an effective company car program:

1. Develop clear policies

A company car policy typically documents rules related to vehicle usage and maintenance. For example, you might specify whether the employee can use the company car for personal errands or work-related purposes only. It can also help you communicate your expectations regarding employee conduct, such as impaired or distracted driving.

Consider these points for your company car policy:

• Accident reporting procedures: Outline the steps to follow if an employee is involved in a crash while operating a company vehicle. For example, you might require team members to call their supervisor within five minutes of the accident, provided it’s safe. You can also ask employees to take photos of their damaged vehicles or submit an incident report.
• Personal use: Explain what’s permitted for personal use. For example, you might limit transportation to immediate family members only. If you don’t allow personal use, you can state this clearly in your policy.
• Vehicle condition: Include guidelines related to keeping company cars clean. For example, you can require employees to remove trash from their vehicles after every trip.

2. Create a preventive maintenance schedule

Regular maintenance can help reduce repair costs and extend the lifespan of a company car. Before putting a new vehicle in service, create a schedule for oil changes, tire rotation and other common maintenance tasks, such as filling the windshield wiper fluid. Consider scheduling regular inspections to ensure company cars are safe for employees.

3. Provide employee training

To enhance safety, you might require employees to complete defensive driving classes or another type of training. Providing regular employee training may help you reduce the risk of accidents.

4. Use a global positioning system (GPS) or other tracking tool

Monitoring drivers can help you identify and correct harmful behaviors before accidents occur. It’s also possible to track fuel efficiency and other data, making it easier to reduce costs and plan more efficient routes. If you decide to track company cars, telling employees what data you’re collecting and why can help establish transparency at work. 

5. Determine when to replace company vehicles

At some point, the cost of maintaining and repairing a vehicle may exceed the car’s value. A replacement plan can help you determine when to purchase or lease a new company vehicle instead of fixing the older one.

Tips for effective fleet management

If you create your own vehicle fleet, you can manage it with an in-house professional, such as a fleet manager, or outsource the work to another company. In-house management may provide complete control over your fleet, but you may also need at least one employee with analytical and organizational skills to collect tracking data, schedule on-time maintenance, review accident reports and handle other fleet-management tasks.

Outsourcing this task can be cost-effective, as you don’t have to hire a fleet manager or ask current employees to complete additional responsibilities. Fleet-management companies generally have extensive experience with vehicle procurement, GPS tracking and auto maintenance, so they can successfully handle these activities.