Despite the complexity of today’s business tax laws, it’s still quite common for businesses to provide company vehicles to employees. It’s not always a good thing; from the cost of the vehicles themselves to the taxes employees face for using them, there are multiple disadvantages to the practice. Here, readers will find out Why Your Business Needs a Driving at Work Policy, and they’ll also learn the pros and cons of company vehicles.
Employees See Company Cars as a Valuable Benefit
The use of a company vehicle is an important benefit for workers, especially those with families. With access to a second vehicle, an employee will have more transportation flexibility and will find it easier to get to work. Company cars are a great perk for those who don’t have personal vehicles. When companies provide cars, employees don’t have to use unreliable, often-late public transportation.
Adding an Unnecessary Expense
Although most of today’s company cars are relatively inexpensive, the cost of purchasing a fleet of vehicles will add up quickly. If a company is located on a public transportation route or most workers already have vehicles, investing in corporate cars would be an unnecessary expense.
Cars Must be Maintained and Periodically Replaced
It’s easy to think of a company car as a one-time expense, but reality is different. Company cars, especially if they’re frequently driven, need service, repair, and maintenance. Over the years, the cost of maintaining and insuring a corporate fleet is significant. These cars will eventually need to be replaced, which is another expense for the company. For small businesses and startups, the cost of starting a corporate fleet may be too high.
Should Companies Provide Cars to Their Employees?
In some situations, company vehicles may offer significant benefits to employees. If the office is remote, these vehicles will help staff members arrive on time. The perk may motivate some employees, showing them that they’re valued. The value of the corporate vehicle system depends on the business’ circumstances. If an owner wants to give employees benefits and can absorb the cost of a vehicle fleet, investing in corporate cars may be a good idea.