Is vehicle reimbursement really worth it? As a business, this may be one of your considerations. It all depends on each company and its situation, so there’s really no right or wrong answer. Sometimes, an employee has to travel outside the office for certain tasks. The two main options to consider are whether to provide reimbursement or offer a company car. Generally, it may be more beneficial to have a vehicle reimbursement program and here are some of the reasons for this.
1. Spending Efficiently
As a business, you want to make sure you spend money wisely, efficiently and effectively. Sometimes, no matter how hard you try, there’s no choice but to use a vehicle for business and even personal purposes. If you want to have a company car, this will be a huge investment up-front.
2. Less Risk & Liability
If the company owns and provides a vehicle and provides this to an employee, the company can be held responsible in the event of an accident. It does not matter if the accident occurred during business or personal use. As far as reimbursements are concerned, if the accident took place during non-business hours, the company is not held responsible. If it occurred during business hours, the company’s insurance will only pay if the claim is more than the employee’s amount of coverage.
3. Choice & Flexibility For Employees
An employee can choose a vehicle that suits their needs for both business and personal use. For example, if an employee has kids, he or she can choose a vehicle that has lots of space for driving about after working hours. Someone who takes long trips on the weekend can choose a vehicle that’s smaller and has better fuel efficiency to cut down on costs.
4. Reasonable Reimbursement
With a carefully tailored vehicle reimbursement program, you can make sure that all employees are reimbursed a fair amount that’s just right. By calculating specific factors such as insurance costs, maintenance fees and many more, you can arrive at a fair figure so that you don’t overpay or underpay. This way, with an accurate system in place, no driver has an upper hand on anyone else and everyone is treated fairly, including the business itself.
5. An Easy-To-Use Software/Application
By using specific software, customized reimbursement will be made simple and accurate as well. This would mean less administrative work. In fact, the software can measure accurately an employee’s commuting habits and distinguish between personal and business use. This way, the company does not absorb the expense of personal use which is likely the case without proper administration. All drivers know where they stand once they understand the dynamics of this program so it’s a win-win and fair situation to all parties concerned.