How to Care for a Company Car

What’s the benefit of a company car as an employee?

Overall, having a company car can offer a range of benefits that can make your job more convenient, cost-effective and enjoyable.

1. Cost Savings: Companies with their own fleets typically cover the costs of purchasing, maintaining and insuring the vehicle, which can save you a significant amount of money compared to owning your own car, especially if your job entails a lot of daily or long-distance travel.

2. Convenience: You don't have to worry about the hassle of buying, selling or maintaining a car through your day-to-day work, and your personal car, if you have one, will incur less mileage as well as wear and tear.

3. Tax and Insurance Benefits: In some cases, you may be able to receive tax benefits for using a company car, such as deducting the cost of gas and mileage on your taxes. You’ll also be able to estimate lower mileage for your personal car since it’s not being used for commuting, which means you can lower your insurance rates.

4. Brand Image: Depending on the kind of company you work for, having a car that’s visually aligned with your organization’s brand can unify the whole fleet under your company’s branding and, in turn, promote the business while you drive.

5. Safety and Reliability: Companies are responsible for providing well-maintained, reliable vehicles that are regularly serviced, which can provide peace of mind for you as a driver and reduce anxiety on the road.

6. Quality Insurance Coverage: Company cars often come with comprehensive insurance coverage sponsored by the business, which can provide more protection in case of an accident than your own policy could.

7. Flexibility: Depending on the company's policies, you may have the flexibility to use the company car for personal use as well, which can be a significant perk that doesn’t require you to have a personal car at all.

8. Environmental Impact: Many companies are investing in more environmentally friendly vehicles, such as electric or hybrid cars, which can reduce your carbon footprint as a driver without necessitating a personal EV purchase.

Driving a company car versus a personal vehicle

So what should you be considering as you operate a company car that differs from using your personal vehicle? The biggest discriminator, obviously, is that the car is not technically your property, but it’s still your responsibility. With that in mind, there are a few things to keep in consideration that become really important in the day-to-day use of your company asset.

1. Record and report everything

Fleet vehicles tend to require a closer eye than your personal vehicle. You’ll want to keep track of mileage, fuel expenses and any other expenses related to the car. This will make it easier to report expenses and claim any tax deductions.

It’s also important to stay attentive to the state of your vehicle as you operate it. The second you detect anything unusual, it’s important to report those issues and get them taken care of as soon as possible in order to avoid any unplanned downtime.

2. Follow through on your daily inspections

Fleets often require daily vehicle inspection reports for operation, especially if your company uses rotating fleet vehicle driver assignments to multiple people or locations. You should expect to receive some driver training on how to conduct your inspections, whether it’s a paper form or a fleet vehicle inspection app, as well as what to look for in specific components of your vehicle each time you do it.

It may be tempting to rush your inspection results, especially on busy days when you’re in a hurry, but pencil whipping your way through inspections can result in key indicators of potential vehicle issues being missed.

3. Be careful to adhere to traffic laws

Bad road etiquette, tickets or wrecks can be detrimental to your company’s insurance rates and reputation, so many companies have zero-tolerance policies for undesirable driving behaviors. It’s vital to make sure you comply with speed limits and prioritize safe travel as you use your company car to avoid getting into any incidents that could result in an accident or infraction.

Many fleets are also equipped with telematics devices, which can be used to gauge driver behavior, like harsh braking or speeding. If you’re not focusing on positive driving behaviors, it can be hard to deny telematics data that points to less than ideal driving on the road.

4. Determine when to use the company car or your personal vehicle

Ordinarily, your company will provide clarification on what it means to use a company car for personal use, and it can look vastly different from operation to operation. Personal use is often expected and allowed, but it means those activities and mileage become taxable on your W-2. If your company allows it, you can use your company vehicles for personal purposes, but you’ll want to be selective about when you do it in order to avoid as much tax liability as possible. If you have a personal vehicle as well, make sure you utilize it for any non-work travel.

5. Stay on top of maintenance

Depending on how you engage with your company vehicle, it’s possible that you’ll either be responsible for basic maintenance on your vehicle as you use it, or your company will handle regular maintenance on a predetermined schedule that you’ll have to abide by. This schedule will sometimes seem more stringent than your own personal vehicle maintenance schedule, but it’s important to stay on top of maintenance to keep your car in the best shape possible.

It’s likely that your company will use some sort of driver management system that has a maintenance tracking component. You’ll want to be sure to stay up-to-date on how to use your company’s system of choice so you can remain compliant with maintenance timelines.