5 Reasons Why Reimbursement Plans Outperform Fleet Management
If your business is thinking about implementing a company car policy or if you’re reconsidering a current policy, you may be wondering about the pros and cons of opting for a vehicle reimbursement plan versus a fleet program. While offering a company car to mobile employees was once considered a normal business practice, increasing cost-cutting measures have resulted in many companies taking a closer look at the cost, reduced productivity and other factors associated with the in-house management of corporately owned vehicles.
For many companies, this introspective look has resulted in a migration away from fleet management toward vehicle reimbursement plans. Corporate managers have found the VRP model to be less costly and less time consuming for their administrative staff.
Reduced Risk Exposure
Because your company’s fleet vehicles become your employees’ daily car, this vehicle will not only be used for work-related travel, but for personal travel as well. Additionally, it may end up being used by someone other than your employee –such as your employees spouse or even an inexperienced, younger driver. A VRP mitigates the corporate liability occurring for use of the company car outside of business purposes.
A big advantage of implementing a VRP is the increased productivity that you will see among administrative staff. Staff members who had previously dedicated a large portion of their day to managing a fleet of cars can now concentrate on other tasks.
Fleet programs are the most expensive of all business vehicle programs. This is because the employer pays for both business and personal driving. That includes title, license, insurance, and accidents.
Fleet programs result in the employee being assessed a taxable benefit for the personal use of the vehicle. This is not so with a nontaxable vehicle reimbursement program.
With the high employee turnover rates experienced by certain industries, it’s essential that companies are able to administrate vehicle programs in a more efficient way. This need positions the vehicle reimbursement program as an ideal solution.
To learn more about these systems or for more information about choosing a Vehicle Reimbursement Program, please contact CarData by phone at 1-866-550-5188 or send an email to firstname.lastname@example.org.