Company Car Policy Elements
Your policy should start with the purpose of the document and the areas it will cover, such as eligibility and choice. This section should cover where the policy fits with other process documents (e.g. Expenses Policy). Plus, including contacts for queries regarding the policy is vital.
Also, include contact numbers covering all main fleet service providers, so employees have a quick route to the information they need.
Employee Eligibility and Vehicle Allocation
Define which employees are eligible for company cars. Often, this falls into two categories – “Job Need” or “Status” drivers.
Job Need drivers will be eligible for a vehicle due to the job role or function they perform. Generally, this involves significant mileage or carrying of equipment or personnel.
Status drivers are entitled to a company vehicle as part of their benefits package or related to their position within the company.
Ensure it is clear that entitlement is dependent on being legally entitled to drive. Also, 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. In addition, the policy must state what the vehicle can be used for and if any family members can also use the vehicle.
The vehicle allocation section should state what vehicles are available. This could involve a grading structure, fixed list or value-based selection amount. In addition, 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 and further selection criteria such as maximum environmental emissions.
If it possible to trade up or down, or if it is possible to take cash allowance instead, this is the section to cover these details.
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 Tax
Provide employees with enough information to understand the tax implications of taking a company car or cash allowance. 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.
Quote, Order and Delivery
Details should cover how employees actually get their company vehicle. This may be a selection from a fixed list or using a quote platform provided by the fleet management company. 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.
Running The Vehicle
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.
Clearly define the process for management of driving offences and fines. Also, 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.
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.
Fuel and Mileage
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 paid rates.
Changes in Circumstance
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.
Health and Safety
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
Company Car Policy Appendix
The policy appendix should include items such as:
- Company Car Order Form
- Salary Deduction Form (If Appropriate)
- Additional Driver Request Form
- Driver Acknowledgement Form