Company Car Policy

Eligibility

This section should clearly identify which employees are eligible for company cars.  Often, this falls into two categories:

• Job need drivers
• Status or perk drivers

Job need drivers will be eligible for a vehicle due to the job role or function they perform. This could involve having to travel significant mileages or the need to carry of equipment or personnel during the employees regular duties. Often job need drivers may have a restricted selection of vehicles available due to the operational requirements of the vehicle and the ability to re-allocate a vehicle to another employee should the person leave the company.

Status or perk drivers are entitled to a company vehicle as part of their benefits package or related to their position within the company. This user group generally get a broader selection of vehicles to suit individual circumstances.

Vehicle Allocation

The vehicle allocation section should state what vehicles are available.  This could involve a grading structure, fixed list or value-based selection amount. Vehicle restrictions may be in place by manufacturer or other criteria; such as no two-seater vehicles, for example.

Other areas common to policies are the availability of optional extras, towing and further selection criteria such as maximum environmental emissions.

Car Allowance

This section should cover if it is possible to take cash allowance instead.

Where cash or car allowances are available, there should be clear guidance stating the levels of allowance, how the allowance is paid and any minimum requirements for cash allowance funded vehicles.  Some organisations choose to have a minimum vehicle specification requirement and have checks in place to ensure this is enforced.

Ensure it is clear that entitlement is dependent on being legally entitled to drive. Highlight that removal of vehicles is possible if a driver recieves a ban for any reason, or has a medical condition that will stop them from driving. The policy should include insurance restrictions such as what the vehicle can be used for and if any family members can also use the vehicle.

The policy should also cover circumstances where individuals are not entitled to a company vehicle and alternatives available, such as hire cars, or using their vehicle (the grey fleet).

Company car policies can range from a user chooser list where the employee can pick any vehicle within their budget allowance, to restricted lists where only certain vehicles are available.

The most suitable solution will depend on the size and complexity of the fleet. Larger fleets can attract additional discount terms from manufacturers which can lead them to restrict choice. For smaller fleets where there these discounts are not available there is less rationale to restrict choice.

Turnover of staff may influence the policy strategy. Where there is a higher turnover of staff it can be advisable to have a restricted choice, which will allow for easier reallocation to a new employee should someone leave the company.

This section should cover how employees actually get their company vehicle.

This will cover the process the driver needs to follow in order to obtain a vehicle quote, get an order approved, place the order with the leasing company or dealer and arrange for delivery.

The driver should know who to contact in event of a query and who is authorised to approve quotes on behalf of the organisation.

For new starters, you may want to include temporary vehicles whilst a new vehicle is on order. Alternatively, facilitate the re-allocation of existing spare vehicles within the fleet.

At vehicle delivery, employees should check for damage and ensure they have been made familiar with the controls of the vehicle so they can operate it correctly.

Many organisations have targets to reduce the environmental impact of the fleet.

The policy documentation should state any restrictions such as a CO2 cap.

Information should be provided relating to the selection and operation of electric and plug in vehicles.

Where an organisation operates a car salary sacrifice scheme this should be highlighted and detailed under seperate documentation as generally these schemes operate differently to a company car scheme.

Provide employees with enough information to understand the tax implications of taking a company car or cash allowance.

The tax implication of taking a vehicle may vary over the life of the agreement so it is important that employees are aware of this at the point of ordering the vehicle.

Your fleet management company usually provide this support, but it is worthwhile including some links to the HMRC website section which covers company car tax and areas such as the provision of fuel for private use.

Employees should be made aware that they are responsible for ensuring your company car is maintained in a safe and roadworthy condition at all times.

It is their responsibility to ensure the car is serviced in line with the manufacturer’s recommendations and regular vehicle checks are carried out in respect of brakes, tyres, fluids and lights.

Make drivers aware of all the key contact numbers and the process they need to follow to service or repair the vehicle.

The policy should cover how employees should fuel the vehicle using fuel cards or a pay and reclaim basis. Coverage should be given to electric vehicles where the process will likely be different to traditionally fuelled vehicles.

Clearly define the process for management of driving offences and fines. Outline the responsibilities for vehicle towing, or if the vehicle is taken abroad.

Ensure you describe the details of the insurance certificate along with a summary of the policy particulars.

Specific clauses on allowable use of the vehicle and highlight any exclusions.

Provide contact details for the insurance company in event of an accident or other claim such as theft or vandalism as well as the process they should follow if they are unlucky enough to be involved in a serious incident.

Make employees aware of what to do in the event of an accident. Develop a form which you can print and put in vehicles, providing employees with a script of what to say and do, for example:

• Stop the vehicle in a safe position
• If anyone is injured, call an ambulance and the police
• Provide name and address and confirm that company insurance covers the vehicle. Provide policy details if known.
• Obtain the name, address, registration number and insurance policy details of any other driver involved. If they do not have their insurance policy details to hand, ask the name of their insurer or, failing this, their broker or company name if a company vehicle.
• Note names and addresses of any independent witnesses.
• Make a note and rough diagram of what has happened. Then, if you have a camera, take pictures of the scene.
• Do not discuss who was at fault for the incident or admit liability.

Inform employees how you will pay for fuel or mileage.

If you issue a fuel card, the employee needs to know how they can use it, and the process for paying back the private element of the fuel.  If the fuel card covers private fuel, inform the employee about the taxation around this provision.

Where employees reclaim business mileage ,they should be made aware of the process and the rates which are paid.

If the fleet has introduced electric vehicles, there should be a clear process of how employees can claim their home electricity charging costs.

There are many situations where the status of an employee could change over time and impact the company vehicle provision.

Circumstances such as promotion, secondment, maternity or long term sickness must be explained, plus the effect on the employee made clear.

Returning the Vehicle

Vehicle return conditions and processes will include end of contract damage assessments, key for key exchanges or returning the vehicle due to redundancy or leaving the company.

It is impportant that employees are aware of the potential charges as some organisations choose to pass these onto the drivers where the drivers have mistreated their vehicles.

The Company Car Policy should include a detailed section relating to specific health and safety requirements. This may include:

• Drivers Health – eyesight or other reportable conditions which would stop the driver from legally being able to use the vehicle
• General Vehicle Upkeep – keeping the vehicle clean and serviceable at all times
• Mobile Phone – policy and re-enforcement of rules on the appropriate use of mobile phones
• Smoking – prohibited in company vehicles by law
• Safe Driving – covering areas such as speed, braking distances, road conditions and being wary of other road users
• Excessive Travel and Fatigue – never drive tired and take breaks frequently
• Drink and Drug Use
• Breakdown – what the employee should do if broken down.  Include the number of the breakdown service.
• Driver Training – any services which might be available to the driver voluntarily or suggested in the event of a serious incident

The policy appendix should include items such as:

• Company Car Order Form
• Salary Deduction Form (If Appropriate)
• Electric vehicle chargepoint installation process.
• Additional Driver Request Form
• Driver Acknowledgement Form