Many businesses have employees who need to travel outside the office to get work done. This presents the company with two primary options: implement a company car program or provide vehicle reimbursement. Let's go over the pros and cons of a vehicle reimbursement program.
Perhaps the most important reason to use a vehicle reimbursement plan is to make sure businesses are spending their money effectively. A company car can be a massive up-front investment. No matter how strict the rules are, businesses will also wind up paying for some personal usage of the car.
A vehicle reimbursement plan can also reduce your liabilities, risks and associated expenses. With a company car, an employer can still be responsible for accidents or incidents. This applies if it occurs during business or personal drives. This could lead to increased insurance costs.
It's nearly impossible to choose vehicles that will satisfy all your employees. With a vehicle reimbursement program, your employees have agency over what they want to use. If one person wants to use a big truck and another wants a fuel-efficient hybrid, they can. This can potentially boost morale.
A vehicle reimbursement program can only work if your employees have reliable access to cars. This isn't a huge problem for most companies. But, it's still something to keep in mind because it could impose an undue burden on some of your workers.
If your line of work requires specific types of vehicles, providing cars for your workers may be a better option. This could be rugged, all-wheel drive cars or vans. Your employees may not have access to these specific types of vehicles.
Companies are often hesitant to do a vehicle reimbursement program because of the difficulty of tracking and maintaining it. A good program needs to be highly accurate and distinguish between business and personal drives. Also, it has to be easy to use and offer robust reporting.
Choosing the right program for your business can be a challenge. But, don't ignore how products and technology can help ease some of your concerns. For example, mileage tracking and expense reporting for teams used to be a giant pain. But thanks to fleet management solutions like MileIQ for Teams, businesses of all sizes can implement effective vehicle reimbursement programs.
MileIQ for Teams provides accurate and accountable mileage tracking, as well as robust reporting for expenses. It's also a simple app with a pleasant interface, ensuring your workers will actually use it. Finally, it offers world-class support and security, so you can spend less time worrying about mileage and more time growing your business.