Company Car or Driver-owned?

Should your travellers get the keys to a company car or be reimbursed to drive their own?

By Julie Charles

Few decisions in business travel can invoke as many opinions, from corporate travel and treasury departments, to human resources, procurement, sales and marketing.

“Depending on the company, the choice often comes down to a balance between culture, image and cost,” says Phil Gilmour, VP sales & client services, eastern region at TLS Fleet Management, Toronto, one of Canada’s largest independent lease financing firms and fleet managers.

“The CFO might be all about the bottom line, but I think sales and marketing are looking at different types of ROI from a company car, including the image and brand you want to project, while HR will view it as compensation,” Gilmour says. “I think everyone deserves a place at the table as it relates to their area, from operations to corporate travel.”

Deciding Factors
Cost and risk are two most often-cited reasons to rethink car policies. One Montreal-based travel and fleet manager for an engineering firm (who requested his company not be identified), says cost and risk triggered management to review current policy, which leases a small fleet of unbranded corporate vehicles used by sales and service executives.

“It’s something we’ve been asked to look at, not just for potential cost savings, but to limit risk,” he says. A final decision has yet to be made.

Off the Hook for Liability
When a company owns or leases a car, the employer holds 100 per cent liability over use of that vehicle, even during personal use and if someone else gets behind the wheel.

“Who is driving your company’s car outside of business hours, on evenings and weekends and vacations and holidays?” asks John Domsy, president of CarDATA Consultants Inc., an Oakville, Ont.-based company that designs and administers car allowance and reimbursement programs. “Could that company asset be in the hands of a teenage son or daughter?”

Domsy has seen clients switch from corporate cars to an auto expense reimbursement program partly in response to accident claims for cars in personal use.

Plus, there are cost savings to shifting ownership: “If it’s a company car being used for personal use on weekends, that’s two out of seven days of a company’s costs that can be saved—or 28.6 per cent savings,” says Domsy.

What do Travellers Want?
The ultimate decider might be, what’s fair to the driver? “I get this question all the time from salespeople: ‘Should I own my own car or take a company-leased car?’” says Anne Babej, VP, professional development at the Canadian Sales Professional Association, Toronto.

Generally, the more ground travelled, the less fair it is to have employees assume wear-and-tear to their own vehicles. “If you’re driving 24,000 km or more a year on business, you generally don’t want to use your own car,” she says.

“If you’re a business to business salesperson, a car is still part of the compensation package—just look at the job ads for sales reps,” says Babej.

“A car can still be considered a sales tool, and the kind of car is the extension of their brand.”

other articles in this section

The Waiting Game

Q&A with Suzanne Neufang, Executive Director, GBTA

By the Numbers

Keeping Corporate Data Safe

Are Your Female Business Travellers Safe on the Road?

Flight Turbulence

What’s your Data Plan?

Get it in Writing

Follow the money

In Harm’s Way

It’s all in the timing

Covering Trouble in Paradise

Flight Plan

For Safe Keeping

Smooth Moves

On the Safe Side

At Your Bleisure

Cover me!

Uber. Airbnb. Lyft…

Q&A with Anthony Pollard

Data Dilemma

Getting on track

So Long, Swipecards

Take your Best Shot

Benefits of Integrating Mobile Payment Platforms

Trend Setter, Dorothy Dowling

Newest Cloud Technology

Is it Time to Dust Off your Corporate Travel Policy?

The Future Travel Credit Management Solution

Planes, trains and data plans

When employees fall ill on the road

Burnout Busters

The Rules of Compliance

Communal Spaces Boost Hotels' Comfort Factor

Making the most of travel and expense management systems

May the Best Vendor Win

Evaluating disaster recovery plans

On the Road Again

Hotels Taking Wellness to a Whole New Level

Corporate Travel Tracker

Controlling Corporate Travel Costs

The Anti-stress List

The Blurred Line Between Corporate Travel Manager and Planner

Big Flight Discounts for Small Businesses

Are Business Travellers Putting Corporate Data at Risk?

Timesaving Mobile App for Superior Car Service

Company Car or Driver-owned?

10 Healthy Travel Tips

Navigating Emerging Markets

Business Travel Etiquette

Rogue Travellers on Spending Sprees!

Business Travel and Health

Social Media and Travel Programs

Baggage Handler Confidential

Travel Expense Reporting

Buses Mean Business

Travel Budgets Analyzed

Q+A with Ron DiLeo

Progressive Extended-Stay Programs

Dynamic Hotel Pricing

The Perfect Travel Management Company

The Kindest Cuts

Green Businesses

Travel Policy Compliance

Car Sharing: The leaner, greener choice!

Expense Accountability

Hotel Program Success

Costly Corporate Credit Card Programs

Travel Less, Save More?

Dynamic Pricing

Travel Program Success

Meetings Abroad: Are you Prepared?

Maneuvering Through the RFP Process

Cross-Border Air Travel

Time for a Travel Policy

10 Ways to Avoid Business Travel Pitfalls

Bargaining Table Car Rental Tips for Corporate Planners

Creating Travel Policy Compliance

Sustainable Travel Tips

Crucial Travel Policy Changes to Save Time and Money

Tipping Guide for Business Travellers

Corporate Travel Policy

Passport Essentials and Other Requirements

Managing your Company's Travel Risks

Duty of care to travellers goes beyond borders