Giving your employees the use of a company car can seem like a great idea, particularly if their jobs involve travelling to several different locations on any given day. But, as always, offering a company car can be a lot more complicated than it may at first seem. As an employer, you’ll need to think about policies and procedures, legal restrictions, taxes, and your company’s reputation and profitability. If you’re thinking about offering company cars to your employees, here are some factors to keep in mind.
#1. Is It Worth It?
First of all, make sure that offering a company car scheme is worth it for your business. If you’re offering a car scheme that allows employees to also use their cars for personal use provided that this is funded by themselves, it may well be beneficial in terms of employee retention, satisfaction, productivity, and loyalty. But, will it help your company save or make more money? If your employees regularly travel for work and your company is regularly reimbursing their expenses, consider whether a company car scheme will make this easier, and whether any additional cost will be worth the investment – for example, company cars are usually more reliable than public transport and tend to look more professional when visiting clients, for instance.
#2. Consider Insurance Costs:
There are several different routes that you can take when it comes to finding the right insurance policy for your company cars. If you’re providing cars to your employees through your company that they are also able to use personally, then it may be worth instructing them to source their own, suitable business insurance that you can cover the difference for. If you’re arranging a fleet of company cars for several employees of your business, then it’s worth looking into fleet insurance. If you want to find the best fleet insurance quotes, take a look at the quotezone.co.uk website. Quotezone is a UK-based business fleet insurance comparison site that will connect you with suitable insurers for the best quotes. All you’ll need to do is enter the details of your company and fleet into their simple form, and they’ll do all the hard work for you. They will pass your details onto suitable fleet insurance policy providers, who’ll be in touch with a motor fleet insurance quote.
#3. Keeping Records:
Since company cars are a taxable business expense, it’s crucial that you are prepared to keep strict records of all company car use, and that your drivers will agree to do the same. This is especially important in the case of company cars that are used for both business and personal purposes and your company reimburses drivers for any business use. No matter who drives the car, if the lease or ownership is in the company’s name, then the lease payment or other expenses incurred will be deductible as business expenses. Ensuring that all company car drivers keep accurate records is important, as this will ensure that you are able to correctly reimburse driving expenses, prove business use for tax purposes, and deduct any depreciation expenses.
#4. Choosing the Right Car:
So, if you’ve decided that offering company cars to employees is the right step for your company, the next factor to consider is the type of cars that you are going to offer. There are several factors to take into consideration when choosing company cars for your fleet. First of all, you’ll need to consider what the car is being used for on a daily basis. For example, if they are for business purposes only and will only need to carry one or two passengers at a time, reliable hatchbacks are usually the way forward. But if the vehicles are going to be used for carrying more passengers, goods or equipment, you will likely require a larger car or even a van. Take the time to sit down with your drivers and consider everybody’s needs and requirements before making a decision. Don’t forget that fuel economy, reliability, age, and technical specifications should also be considered when choosing a type of company car.
#5. Measuring and Tracking Performance:
Last but not least, although every business that offers company cars would like to think that their drivers are committed to upholding their good reputation on the road, this is sadly not always the case. Consider using dashcam devices and telematics for each company car, to get a better idea of the individual habits of each driver and make it easier for you to work on improving driver performance before it becomes a serious issue. In addition, telematics devices can also make it easier for you to track your fleet without the need to directly contact the driver and distract their attention from the road. And, both telematics and dashcam data can be extremely useful to your insurance company in the event of an accident, regardless of the party at fault.
Is a fleet of company cars the best decision for your business? We’d love to hear from you in the comments.