Building a car policy that will steer you in the right direction

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Building a car policy that will steer you in the right direction
December 1, 2016

Offering company vehicles to your employees, whether as a perk or necessity, can be a large expense that may, if not administered effectively, cost you more than it should.

Which employees will receive a company vehicle?

The use of a company car is typically concentrated among executives, managers, sales, and employees conducting off-site services that require a vehicle. To establish a policy, you need to determine the eligibility of employees with respect to their role. For example, an employee working for a cleaning company will need a specific category of vehicle such as a small truck to transport equipment. A sales person visiting clients may warrant a more luxurious option. Therefore, a detailed needs analysis must be performed prior to determining the employee to vehicle relationship.

What options would you like to offer?

The range of options offered to employees can span from all-inclusive (car lease, license, insurance, maintenance and repairs, roadside assistance and fuel) to basic. Prior to establishing your policy, you need to determine exactly what you would like to offer to each employee, as well as outline how the offer fits into the employees’ overall role and compensation package.

What type of vehicles will be included in your policy?

You need to determine the category of vehicles required based on your corporate goals and employee needs. Elements influencing the decision around vehicle types can be governed by anything from average mileage logged to the type of materials that need to be transported. Regardless of whether or not employees have a say around the available options, cost optimization can only be achieved if the company has final say over the brand, model, equipment and options.

What are the specific rules?

You should coordinate the different aspects of cost optimization, employee requirements, HR classification, etc. to define the rules of the policy. Every employee should receive clear instructions, namely: the car catalogue, the lifecycle of the vehicles, the rights and responsibilities of the drivers, the conditions in case of absence, repair procedures, etc. The vehicle must be regarded as a working instrument entrusted to its user. As part of your policy, you must also factor in regular servicing of the vehicles, maintaining them in a safe and road worthy condition at all times.

A clearly defined car policy will ensure that all parties are aware of their responsibilities and options, acting as a reference document and clarifying any uncertainties. This will be an essential tool for your car fleet manager, and is the first step towards streamlining your car fleet operations. Ayming’s experts can help by providing guidelines towards building the best car policy for your organization, as well as providing you with strategies towards controlling costs.

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