Company Fleet or Car Allowance: What's best for me?

When it comes to driving for work, companies have a couple of different options for getting their workers from point A to point B during office hours. However, choosing what will work best for everyone involved isn't necessarily black and white. We've researched the benefits of both to help you make the best decision for your organization.

Company Vehicles

Company fleets are a great option for companies who want a little more control over how much they are spending on company travel, as well as the actual vehicles their employees are using. While the initial cost of building a fleet might discourage smaller companies from making such a commitment, it is important to consider how having total control over your vehicles can benefit both the organization, as well as your workers:

• You have the freedom to select the make and model that best represents your organization and fits your budget. Whether you want a luxury brand to elevate your company's status, or you are looking for something more eco-friendly to reduce your organization's carbon footprint, the decision lies solely with you.
• You can brand away. Owning the vehicles means that you can do as much branding on the vehicle as you want! It helps make a statement about your organization when your workers get to where they are going, and can be a great marketing tool while they are on the road.
• All vehicle maintenance is up to the company, so you know exactly what got done and when. This includes any recalled parts, oil changes, and, if necessary in your area, changing to and from winter tires.
• You control the paperwork. You know how old the vehicle is, where it was bought, all the work that has been done, and , most importantly, when the registration and insurance need to be renewed. 

Car Allowance (Personal Vehicles)

Instead of investing in a fleet of vehicles for their employees to use, some companies allow employees to use their personal vehicles for work purposes. This can be beneficial to both parties.

• It can be more cost effective for an organization if very few workers need to drive for their job on a regular basis. Instead of investing in multiple vehicles, gas, insurance, etc., the company only needs to cover the gas and mileage for the trip. Employers may also choose to assist with registration and insurance costs to offset the extra use of the vehicle.
• It allows employees more flexibility in how they schedule their day. Workers using their own vehicles have the freedom to schedule appointments on their way to and from the office. This is particularly helpful if a client is located on their commute, or out of town and making the meeting requires a slightly longer drive.
• Drivers are more comfortable in their own vehicles. They know how it runs and handles in almost every weather and road condition. Braking distance and overall handling of a vehicle can mean the difference between life and death in certain situations. Not only does this allow them to make better decisions about whether they should proceed with or cancel the trip, this knowledge can help them make better overall decisions on the road.

However, this doesn't mean that employers are off the hook, or that employees have the right to drive however they would like.

Even though the use of a grey fleet can save a company time, money, and the hassle of car shopping, the employer is still responsible for making sure the vehicle is well maintained and that all the appropriate paperwork is in order. There are a couple of ways this can be done:

• Paying for gas, mileage and other related costs of driving for work. This requires workers to submit their receipts to the organization and get reimbursed only for costs incurred while they were on the clock (parking fees, gas, etc.).
• A travel allowance. Based on expected travel costs, the company would give the worker a dedicated amount of money to be spent on gas, maintenance, mileage, and parking without needing to submit receipts.

Employers must also keep records of their yearly (or more frequent) vehicle inspections, and ensure that any issues have been resolved, as well as provide workers with a written safe driving policy which outlines your expectations of workers who drive for work, as well as the consequences for not complying.

Meanwhile, even though it is their own vehicle, employees are expected to follow their employers safe driving procedures and keeping the vehicle maintained according to their yearly (or more frequent) inspections. While it is the worker's responsibility to keep their license up to date, the company may also wish to keep track of when licenses need to be renewed.

Decision Time

The only person who can decide which option is more suitable for your organization is yourself and your management team. This is just the tip of the iceberg when it comes to evaluating your options, but we hope it helps get you started.

If you have already been through the process of building your fleet, add your voice to the conversation. Let us know in the comments how you came to the decision you did and why it worked for you. You may just help someone else make their decision too.