Weighing the Pros and Cons of Providing a Company Car

How often does your staff have to travel? Do most of your employees commute to work? Do your employees have to travel to perform their job duties? There are a lot of reasons why workers need to be mobile. When you have a staff that needs to be able to attend meetings outside of the office or that have to travel to provide their services, they need a reliable form of transportation.

You may have wondered whether investing in a fleet for your workforce is a good idea. Should you provide a company car to your employees? Before you make a decision, you must weigh out the pros and cons of providing a company car.

Transportation Is Guaranteed

Public transportation does not work for everyone. If you live in an area where public transportation is less common or if your company isn’t close to any train or bus lines, your employees may have difficulty getting to work. If the public transportation hours are limited, you may have employees that are chronically late.

If you provide them with a company car, you don’t have to worry about your employees being unable to make it to work. Many families also share only one car. If someone in the family needs the vehicle for an emergency or a different obligation, your employee would still be able to use the company car to make it to the office. You may even see fewer car breakdowns.

Advertising Is a Bonus

Your company car could help get the word out about your brand. Many companies showcase their corporate logo on company cars. Most employees will be hesitant to put the company’s branding on their personal vehicles. However, with a company car, you can put your branding without a problem.

Also, a company car can shape your image. For instance, if your employees attend a lot of corporate meetings or if they have business lunches, you want them to show up in a good-looking car. If they show up in a rundown and old car, it might look like your company is less successful. Being able to afford a company vehicle shows that your company is successful and that you invest in your staff.

The Company Has Oversight

If you have a mobile workforce and your employees use their vehicles, you have no way of knowing where they are during business hours. For instance, if a staff member had a meeting in another city and didn’t show up. You could find out where he or she is through trackingOpens in a new tab..

Also, you can have more control over the safety features in the vehicle. There could be safety features that you consider important. When your staff is on the road, performing tasks for your company, you are liable if there is an accident. With a safe car, you can ensure that there may be fewer injuries or risks of an accident. Besides, you don’t have to worry about your staff’s cars breaking down.

Risks Are Higher

One thing to keep in mind about a company car is that the car can be a higher liability. If an employee has an accident in the company car, then you may be liable for it. Even if the employee has an accident outside of business hours, you could still face liability charges. If you do decide on a company car, you make sure that you have a reasonable insurance policy. Your insurance coverage could help mitigate the risk.

Cars Are a Large Investment

To buy a fleet of vehicles for your company can be a large expense. You require a lot of capital to be able to buy your vehicles upfront. Most companies do not want to be in a position where they have to choose between an inventor and a vehicle. There are ways that you can reduce the expense, however. You can consider leasing the vehicles or look into other forms of auto financingOpens in a new tab.. It is important that you look into your options to figure out which will be best for your financial situation.

Not All Employees Want a Company Car

While the majority of employees may be more than happy to use the company car, you may have some that do not want to or staff members that cannot. Some people choose cars based on specific safety features or for accessibility reasons. For instance, if you have an employee with chronic back pain, he or she may require a more comfortable car. People with disabilities may need a personal car with several modifications to be able to drive. To deal with this problem, you may want to allow some exceptions. If a person has a solid reason to use his or her personal car, then you should allow it.

Cars Require Maintenance

If your company owns the car, then your company is also responsible for the maintenance and upkeep of the vehicles in your fleet. When you purchase cars for your company, you have to plan for the expenses that go with car ownership. Your vehicles have to be maintained at least once a year and sometimes more than that. You should have a maintenance plan and schedule for your employees to follow. This will also ensure that your vehicles last longer.

Vehicles Depreciate in Value

In all businesses, there is equipment that depreciates over time. Company vehicles are no exception to that. Most people know that when a vehicle leaves the lot, it begins to depreciate. If you purchase the vehicles outright, you can get your money back in business success and productivity, but you will not be able to recover any lost money from the vehicles themselves. If you want to upgrade, you cannot sell the vehicles at the price you paid for them.

In some instances, it may be easier to lease a vehicle and be able to replace the vehicles at the end of your lease term. This can make it a lot easier to swallow the monthly payments. You don’t have to worry about the resale value of the cars when it’s time to upgrade to a newer model. Another point to keep in mind is that a good car can last for years. You will know when it’s time to replace your vehicle based on the vehicles’ mileage and maintenance costs. For instance, after the first 50,000 milesOpens in a new tab., you will have to spend more on maintenance. You should replace your vehicles when the cost to maintain them exceeds what it would cost to upgrade to new ones.

There are a lot of advantages in providing vehicles to your employees. With all of the advantages, however, there are always going to be challenges that you have to overcome. In general, however, most employees appreciate the ability to drive the company car. You may find that your employees treat it as a benefit and you may be able to recruit more people based on the fact that you provide a vehicle.

When it comes to choosing whether or not you want a company vehicle, you should always weigh the pros and cons. While a company vehicle can be great for branding and convenience, they also cost money. You have to make sure that your company will be able to benefit from the investment.

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