Should Employers Have Company Vehicles?

A big question that many companies ask themselves is whether or not they should provide their employees with company vehicles. Many companies in a variety of industries could benefit from this. Whether it’s to assist employees in their commute to work or help them get around in their duties, this topic has become a major debate. Providing benefits to employees is known to lead to a more productive workplace, leading to harmony, and higher staff morale.

 Employees getting more benefits from their job has also proven to increase loyalty levels to their job and employer. Needless to say, benefits and good pay are to ingredients needed for creating overall satisfaction. One of the more popular benefits that have been on the rise is providing them with their own company vehicle. This vehicle is separate from company-owned vehicles that are done for certain tasks.

Instead, this is a car that the company provides that allows the employees to drive it on their commute to work, personal use, and work-related tasks that would need to be done outside of the company premises. Companies use to only provide a few company-owned vehicles that were solely meant to do tasks that only benefited the company or assign employees to use their own personal vehicle to do company-related tasks (often without any additional pay or incentives). Many countries within Europe have been giving their employees company cars for years now, should companies within the US do the same?

Being able to use a company car is a valuable benefit for employees, particularly those who struggle to have a means of solid transportation to work. Being able to use their company vehicle can provide employees with greater transportation flexibility and it also helps them avoid any need to rely on public transportation,  asking for help from loved ones, or ride-sharing services such as Uber. These are some of the biggest benefits for companies providing their employees with a company car.

Employee satisfaction will improve

Employees want to be satisfied at their job, employees tend to spend most of their day at work. They most likely see their coworkers more than they see their own family. So it’s crucial that employees enjoy their work setting.  This leads to a myriad of benefits for the company and the employees as well.  Employees who are satisfied with their work and their environment within their job tend to lead to have much happier lives, willing to be far more productive at work, loyal and will be willing to go the extra mile in being a team player.

Company cars don’t need to be luxury vehicles such as a Tesla or some other electric car. Instead, these can just be vehicles that are not run down and do not constantly need maintenance. Employees just want proper benefits and a reliable mode of transportation. Offering a proper mode of transportation can be life-changing for some. It shouldn’t be a surprise at all why employees with fantastic benefits tend to be far happier at their jobs. No matter the industry, employers can benefit by providing their employees with a proper company-provided vehicle.

Higher efficiency at the workplace

There’s no doubt about it that a satisfied employee is a productive employee. They tend to work far more efficiently, in a better mood, and happy employees work far better together. Providing the benefit of company vehicles to employees not only makes them happy but will improve their productivity as well, leading to productivity boosts through the company.

Public transportation and ride-sharing apps aren’t always the most reliable source of transportation. Some cities, especially those in rural areas do not provide public transport or offer anything such as Uber or taxis. Transportation can get really tough for employees. Unfortunately, there’s the dark truth that employees need to be able to financially afford to have a job. By giving employees a company car, will help them financially and it will give them peace of mind.

 There’s always the chance of an employee being late to work, but having unreliable transportation only increases this risk. It’s obvious that employees who show up late to work tend to have decreased work performance (due to time taken out of their day). Providing them with a company car or even allowing the employee to lease a car from their employer will drastically improve their punctuality, their work performance, help their stress, and it will also help employees for work that may be off-site.

So what about company vehicles that need to stay on-site? Even allowing your employees to drive those for their work-related tasks will improve their work performance. There won’t be any need to rely on their own personal vehicle for tasks, and this can allow the opportunity for the employee to learn to repair the vehicles as well. Something such as a Ford workshop repair manual can drastically save the company money from having to go to a repair shop. Instead, allowing companies to use company vehicles and allowing them to learn proper maintenance and repair can have major benefits.

It doesn’t need to be expensive for companies

There’s the idea that companies will need to completely pay for the company vehicles but there are plenty of leasing companies that have low monthly rates, and some companies who do provide this benefit will deduct a few of their employees to afford the company vehicle. This usually still tends to be worth it for employees.  In general, there are ways to cut costs when giving employees company vehicles, and it doesn’t need to be expensive.

 Are there any advantages or disadvantages to companies buying or leasing vehicles?

There are some pros and cons to leasing company vehicles.

Leasing Advantages

  • A deposit is not required
  • Fixed monthly rate
  • Often times the lease options are flexible

Leasing Disadvantages

  • Leasing companies often won’t allow more than 35,000 miles per year as this can be costly for them
  • No single upfront payment, only payments each month
  • The guidelines can vary depending on the leasing company, so companies will be required to do a lot of research. At times, buying may be far more cost-effective but there are also negatives to it as well.

Buying Advantages

  • List price tends to be cheaper than the leasing price
  • Can sell any time
  • No mileage restrictions
  • Can allow employees to repair the vehicle

Buying Disadvantages

  • Depreciation kicks in quickly
  • Need to finance or pay upfront for the cost

In both cases of a company offering company vehicles to their employees, it’s important to set up some guidelines.

Are there any disadvantages to giving employees a company car?

While there are plenty of beneficial schemes to offer employees a company vehicle, there are disadvantages to this as well. One of the biggest is the fact that it can be costly to a company. No matter the industry or service that the company supplies, a company car is going to be costly. There are nontaxable expenses as well such as maintenance, insurance, road tax, and other costs that vary per state. Another negative would be the environmental impact. If the vehicles are not electric, then chances are, all it’s doing is contributing to carbon emissions.

Transportation to and from work is one of the biggest contributors to carbon emissions. It’s important to show employees their importance and offer them benefits. But it can be difficult to make the decision of where to cut costs just to help out employees. There is always the chance of being able to make a deal with a leasing company or save money on a purchase when buying a car. Overall, it’s up to the employers, and what they want to prioritize.


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