Your company car policy: striking the right balance between satisfaction, safety, and savings

Roughly one in every five (21%) employees in the UK have access to a company car, whether it's part of their overall remuneration package or an essential component of their role. Additionally, 34% of senior managers and 44% of directors in the UK have access to a company vehicle (Fleet News, 2023).

For fleet agreements to function properly it is critical to create regulations and rules within your fleet policy document that can be easily understood by your drivers, that add genuine value with regard to duty of care and that are enforceable and monitorable. In short, your company car policy should specify the expectations of the company and the drivers in a way that encourages safe, conscious, and sustainable use of company vehicles.

Policies can be difficult to establish, especially if employees have different demands and expectations, or if your policy needs to cover a blend of personal, business, and logistical vehicle use. This is where Athlon can help.

1. State the exact function of the vehicle - If the benefit of the car is function-related, specify which role it’s designed for.
2. Ensure you define who can drive the company car – Also include the conditions under which this is permitted. Should employees be able to borrow a colleague’s vehicle? Are spouses and partners insured on the policy? Its important to avoid ambiguous language.
3. Capture company car responsibilities - The policy must include expectations of driver responsibility in the event of a collision, traffic fine, or theft of the vehicle. Ensure that if the worst happens, your drivers know what to do next.
4. Include insurance information - Clearly state the insurance policy associated with the company car, as well as the franchise scheme, so that this information cannot be disputed and is understood by everyone.
5. Provide full visibility on fuel - If you provide a fuel card or other fuel arrangement, make sure the policy clearly states what the company car can be used for and what is considered private use. This is critical because private use can be regarded as a Benefit In Kind and may result in tax implications for the employee.
6. Describe the current charge arrangement - Include rules for how the employee must charge their company car if it is a plug-in hybrid or fully electric vehicle, which are becoming more common in UK business fleets. This can include charging frequency, rules for charging at home and on the road, the types of charging locations to use, and so on. Include information that will encourage healthy charging habits that protect the integrity of the battery, improving long term performance.
7. Specify rules surrounding car modification - Depending on the use agreement, some employees may inquire whether they can make changes to their company car. This could include installing a tow bar or roof rack or installing cherished (personalised) registration plates
8. Highlight replacement arrangements - On occasion, such as when a car needs to be repaired or serviced, your employees may need to temporarily switch vehicles so they can continue driving. A policy outlining replacement vehicle provisions helps to reduce headaches by ensuring that everyone is aware of the details before their regular vehicle is unavailable.
9. Avoid making car handover uncertain - Employees will eventually leave your organisation. Others may need to take extended leave from their position. If they were driving a company car, both they and the company would need to know what happens to the vehicle in such circumstances.