The company car is one of the major status symbols in the American workforce. Unfortunately, these vehicles can cause major problems for companies that are unprepared for the reality of having company cars. Below are just three things you must keep in mind when planning for company cars.
Who Gets The Car?
Company cars can be a great perk, but you have to put at least some thought into who gets the vehicle. If there’s a specific position where that employee typically receive a company car, you must make sure you are comfortable giving that perk to everyone who will work in that position. Withholding this kind of perk can be a nightmare in the HR world and can lead to some major problems in your workforce. Always make sure you have firm rules about who does—and importantly, who does not—get a car at your place of work.
Who Is Liable?
Liability is going to be one of the biggest issues when dealing with a company car. If the driver is in an accident, who actually has liability? Figuring this out will largely require understanding when the employee is allowed to use the car and under what circumstances it can be used outside of company business. It’s not a simple question to answer and there’s a fairly large body of case law concerning liability in company vehicles. If you haven’t already checked it out, it’s probably a good idea to talk to an auto accident attorney to make sure your bases are covered.
Maintenance
Who is responsible for taking care of the car? Where will it be serviced? More importantly, who is going to pay the bill? Car maintenance can be tricky with company vehicles. You’ll not only have to decide if it’s the company or the driver who is responsible for maintenance or repairs but also how compensation for either of those issues will work within your company. This can not only lead to some very difficult payroll issues but it can also lead to tax problems. Always make sure you have clear policies in place for maintaining and repairing company cars.
If your business is going to offer company cars, make sure that you’re ready for all eventualities. Look into liability, repairs, and even to whom they will be offered. The more questions you can answer ahead of time, the more problems you can avoid. With the right preparation, you can avoid turning company cars into a major company liability.
