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Company Car Rules for Employees Driving your Fleet

Oct 24, 2019

What is a company fleet of vehicles?

Businesses who own or lease vehicles for employees to use for business and everyday purposes are said to have a company fleet.

Some businesses also use their company vehicles as an incentive to employees. You may use them as a recruitment or employee retention tool for example.

Company fleets can comprise of both cars and vans.

What are some key things to keep in mind when running a company car fleet?

Your business may need to have a fleet of vehicles given the nature of the work that your employees carry out. Or you may choose to offer a company car incentive to employees. Whatever the reason behind employees driving company vehicles, there are some things that as a business you need to keep in mind.

Whether you purchase or lease the vehicles that you provide to employees, these three areas are likely to impact on your business:


Depreciation refers to the loss of value that a business asset will experience over time. There are obvious risks with regards to business finances if you own the vehicles in your fleet – and depreciation will be a key factor to take account of.

Factors which can affect depreciation include mileage, condition of the car and wear and tear. You will therefore want to stay on top of how your vehicles are being driven and looked after by your employees.

Fuel Costs

Fuel costs can be one of the most significant expenses associated with running a fleet of company cars. Factors such as how the car is driven, and the current price of petrol and diesel will mean this can fluctuate significantly. Deciding how to manage fuels costs will be a big part of your fleet management strategy when it comes to your company fleet.

There are also tax implications which apply to company car and fuel benefit payments which you will need to take into consideration.

Fines and Penalties

The person driving the vehicle will be responsible for any fines or penalties that are issued. Yet as a provider of a company car you will also bear some responsibility too. This involves ensuring that you have met all of your duty of care responsibilities and that the vehicle is roadworthy.

Speeding can be a particular concern for fleet managers, as not only can it result in a fine, but it can see other costs such as insurance premiums increase. As well as the higher fuel consumption and therefore costs associated with driving at higher speeds.

Read more about some of the impacts that employees getting caught speeding in a company car may have on your business here.

Company car policy for employees

A company car policy will set out the rules that employees driving a company car will need to adhere to.

Putting company car rules in place can help protect your fleet vehicles and your business, as well as ensure that you adhere to any health and safety requirements which apply when you are providing vehicles to your employees.

Vehicle use – it is important to stipulate if the vehicle can be used for personal as well as business use. Equally, you will also likely want to define what the vehicle can’t be used for. This may include any other business purposes (other than those involved in the course of doing business for your company). That the vehicle can’t be used for racing or rallying, to be hired out, to be used to teach anyone to drive in as a few examples.

Who can drive the vehicle – if you allow the vehicle to be used for personal use you will likely want to define who can drive the vehicle. Can an employee’s spouse or partner drive the vehicle for instance? Or is only your employee allowed to drive the company car?

Responsibilities of the company and driver – It is a good idea to set out exactly what, as a business you will be responsible for with regards to the company vehicle you are supplying.

Company responsibilities – businesses who allow employees to drive company vehicles must fulfil a duty of care to their drivers. This includes ensuring that all company vehicles are safe to drive before providing them to employees as well as ensuring that regular servicing and maintenance checks are scheduled and performed. The company is also responsible for insuring the vehicle with appropriate cover.

Drivers responsibilities – the driver is responsible for the driving of the vehicle. They must abide by road rules and laws, inform you as a company if they incur any penalties or fine. It’s also important that employees driving company vehicles document any driving related expenses such as fuel and tolls, carry out regular maintenance checks such as tyre pressures, oil levels and screen wash etc. If the driver notices anything wrong with the vehicle it is important for them to inform the correct person in the company so that any maintenance issues can be resolved.

Fine and penalties – The driver is ultimately responsible for any fines or penalties issued. It is important to be clear about how you will recover the money from your employees for any fines incurred. This could include deducting from their wages or having a separate agreement.

Notifying you of any events – If anything were to happen to your company vehicle whilst it is being driven by an employee, as a business you would want to be kept informed.

This includes things such as:

  • The vehicle being stolen
  • The vehicle being involved in a road traffic accident
  • The driving being stopped for a driving offence eg: speeding, drink driving etc

When the employee must return the vehicle – being given use of a company vehicle is a privilege extended to employees. So, a good policy to include in your company car rules for employees is when the vehicle must be returned. This could include when the employee’s contract is terminated or if the employee doesn’t adhere to the company car rules for example.

These are just a few areas that you may want to consider adding to a company car scheme policy. There will likely be other areas that as a business you may want to include.

If you run a fleet of company cars or if employees use their own vehicles for business use, you must fulfil your duty of care as an employer to ensure that vehicles are roadworthy, the driver has the relevant driving licence in place and that insurance is in place to cover business use. Legislation can see businesses and individuals facing much tougher penalties for accidents that happen which involve those driving for work.

At Anthony Jones, we specialise in fleet insurance and can help you find the right cover regardless of the number of vehicles in your fleet. If you have any questions about your insurance needs, or your risk management strategy, do get in touch with us on 020 8290 9099 or email us at commercial.motor@anthonyjones.com

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