Tips for Business Leaders Lending Company Cars

  • Establish eligibility criteria for company car usage, considering job responsibilities, driving history, and insurance requirements.
  • Select suitable cars based on job requirements, costs, and safety features while aligning with the company brand.
  • Ensure driver safety through comprehensive programs, clear rules, tracking systems, and regular car inspections.
  • Continuously monitor and evaluate the usage of company cars for improvements, cost-effectiveness, and efficiency.

As a business owner or executive, you understand the value of providing your team with the necessary tools they need to succeed. Company cars can go a long way in increasing productivity, improving morale, and expanding business opportunities. But lending company cars is not as straightforward as handing over the keys. Here are the essentials of lending company cars and tips for business leaders to ensure a smooth process.

Choose The Eligible Employees

The first step in lending company cars is to establish who is eligible to receive one. A clear policy outlining the eligibility criteria should be created to avoid any confusion or disputes in the future. It’s also important to regularly review and update this policy as necessary. Here are some factors to include in the criteria:

Consider Job Responsibilities

When establishing eligibility, each employee’s job responsibilities should be considered. Those with duties that require frequent travel or the transportation of goods and services are likely to benefit most from having a company car. It’s critical that the provision of company vehicles aligns with the needs of the business and aids in the execution of job responsibilities.

Review Driving History

A review of an employee’s driving history is a crucial component in the decision-making process. This review should go beyond just a check for a valid driver’s license. It should also include an assessment of any traffic violations, accidents, and the overall driving record of the employee. This will help ensure that only responsible drivers are given access to company cars.

Understand Insurance Requirements

Business leaders should familiarize themselves with the insurance requirements for company cars. These may vary depending on the state and the nature of the business. It’s crucial to ensure that each company car is adequately insured to protect the company and the employee in the event of an accident. Understanding and adhering to these requirements can save the company from incurring hefty fines or unexpected costs.

car keys on the foreground with man signing insurance document at the back

Select The Right Car

Once you have established the eligibility criteria, it’s time to choose the right car. The car selected should fit the job requirements and budget of the business.

Considering the car’s fuel efficiency, maintenance costs, and safety features is crucial. Additionally, the vehicle should be branded and customized to align with the company’s image, values, and culture.

The business should look into leasing cars instead of buying them if possible. This can help save money in the long run and provide more flexibility for when vehicles need to be updated or replaced.

Ensure Driver Safety

The safety of the drivers is of utmost importance. Businesses should consider enrolling drivers in a driver safety program, such as those offered by the American Safety Institute. These programs provide comprehensive training and assessment on safe driving practices to ensure that all employees operating company cars do so responsibly. In addition to enrolling in a driver safety program, businesses may also consider the following:

Implement a Clear Set of Rules

To help ensure driver safety, businesses should create and enforce a clear set of rules for operating company cars. These rules should cover topics such as speed limits, prohibitions on the use of cell phones while driving, and when vehicles must be serviced or maintained. All drivers should receive a copy of these rules and sign an agreement indicating they understand and will comply with them.

Install Tracking Systems

Installing tracking systems in company cars can help improve driver safety. These systems allow businesses to monitor the speed of their drivers and ensure that they are driving within legal limits. Additionally, tracking systems can be used to locate vehicles in case of theft or if a driver becomes lost.

Inspect The Company Car

A comprehensive pre-inspection should be done before a company car is handed over. This includes checking the car’s condition, mileage, and fuel level. A maintenance schedule should also be created to ensure the vehicle is regularly serviced and repaired as necessary. This ensures the car operates optimally and helps prevent costly repairs or replacements in the future.

Monitor and Evaluate The Cars’ Usage

Finally, it’s essential to continuously monitor and evaluate the use of company cars. This helps identify potential improvement areas and ensures the program remains cost-effective and efficient.

For instance, businesses should track the total miles driven, fuel costs, and maintenance expenses. Companies may also want to consider surveys or questionnaires to evaluate how employees use the cars and if they meet their job requirements.

In some cases, businesses may opt to install GPS or dash cams in their company cars to monitor the vehicles’ usage. However, this should only be done with the driver’s consent and with clear rules on how the data will be used and stored.

Lending company cars can be a valuable benefit for your employees and your business. However, it requires careful planning, execution, and monitoring to ensure success. By following the above tips, you can establish a successful company car program that improves productivity and morale and helps your business thrive.

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