Things to Consider when Making a Company Car Policy


Companies can limit unnecessary expenses for their company cars by creating company car policies. Here are some of the things that company owners should consider when making their own company car policy:

Entitlement to a company car

The company should disclose the reasons why a certain employee is entitled to have a car. The reason of company car use should also be justified. It is better if the purpose of a company vehicle is necessary to the employee’s nature of work (sales person, executive, etc.) A promotion to a higher job grade could also be a basis for a company car entitlement. The company should also state if the employee can choose a certain model of car.

Employee’s responsibilities

The company should also state the responsibilities of the employee when it comes to the company car maintenance. The employee should be reminded of the things to remember when using the company car to avoid damages. The sanctions for car damages must also be stated, such as salary deductions, etc. Rules for work-related and private use of the company vehicle should be clearly imparted to the employee/s.

Insurance, taxes and other expenses

To avoid bigger expenses, companies usually depend on contract hire services rather than the direct purchase of cars from suppliers. The company and the service provider agree to certain terms regarding the company vehicles. This is also the reason why conditions should also be given to the employees in compliance with those terms. It should be specified whether or not the car is personally insured to the employee. It should also be clear whether other people who drive the car are covered under the insurance policy. The employee should also pay for company car tax. It should also be declared who will cover fuel costs – whether the company or the employee himself. Some employees have an agreement to reimburse their fuel expenses from the company. The company should also consult the contract hire service to ascertain whether there are any Health and Safety Policies for the cars and if so, these specifications should also be disclosed.

Withdrawal of company car disclosure

The grounds for the withdrawal of company cars should also be clear. This will help in some cases, including the termination of employment or demotion.

Terms and conditions

It will be beneficial to the company and the employee to have a written agreement. This could protect either of the parties in some instances.


For excellent contract hire or company car leasing services, contact ALD Automotive, one of the most reliable fleet management service providers, on 087000-111-81.

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