Are Company Cars Going Extinct in the Next Decade?
For years, company cars were commonplace for a number of industries. From workers in the finance industry to technicians, it seemed that just about every employee before the Millenium had a company vehicle—but is that still the standard?
If you’re thinking about getting a fleet of vehicles for your business or are just curious about this issue, you’re in the right place. In this post, we’ll discuss some of the pros and cons of company cars and talk about some alternatives you may consider.
Pros and cons of company cars
Company cars aren’t necessarily going extinct in the modern age, but they may be less common now that there are other options available. Nonetheless, there are still plenty of businesses that find this solution to be the best for their employees’ and organizational needs.
Some of the advantages of investing in company vehicles include:
- Reliability: If you’ve ever had employees with car issues, you know that this can become extremely stressful for your business. But when you invest in company cars for your employees, you have a little more control over the situation. Just be sure to get them serviced at a mechanic that’s well-versed in the vehicle make you choose. For example, you’d likely trust a Mercedes-Benz North Houston service center to maintenance your Benz rather than a Ford dealership.
- Professionalism: When you work in a white-collar industry like finance or real estate, one of your most important duties is to look professional and sophisticated at all times. Having a company car that impresses your clients and makes them feel comfortable can do a lot for your business’ success.
- Perks: Besides boosting reliability and company appearance, company cars can also function as a great perk for your employees. If you have limited parking, a carpool system can improve your employees’ commute. And if your staff has a long commute, putting miles on a company car instead of their own might be a more appealing offer.
Along with the many positives of company cars, there are of course some drawbacks, too. Here are a few things to consider:
- Increased liability
- High insurance costs
- Tax complications
If you’re not quite ready to commit to buying a fleet of vehicles for company use, then you might consider some alternative ways to access some of the benefits. Here are a few.
- Vanpool: Many companies that have parking issues or just want to do their part with carpooling will opt for vanpooling solutions. This can be a more economical, lower-risk option than buying company cars, but it still maintains many of the same benefits. Enterprise vanpool and carpooling is available in many cities across the U.S. from Phoenix to Manhattan and just about everywhere in between.
- Rideshare: Another option is to finance your staff’s ridesharing expenses. Uber and Lyft are the major players on the market, but there may be some other options in your city as well. A ride pass with Uber is one way you can monitor the expenses of ridesharing for your company.
- Auto allowances: If most of your staff have their own cars that they’d prefer to use, you might give them an auto allowance as an incentive for using their cars for business purposes each month. How much you allocate totally depends on their mileage and your company’s preferences.
- Vehicle fleets: You don’t have to buy a company car for every staff member in your organization, especially if they’re only used for standard business procedures like providing service and maintenance to customers. Instead of purchasing individual vehicles, you might consider buying a fleet of vehicles that employees can use. Just be sure everyone has been approved to drive them so that you don’t run into any insurance issues or liabilities later down the road. Speaking of insurance, make sure each driver is covered under a company car insurance plan—not only will this protect your employees, but it will also protect your business and other drivers on the road.
Company cars may be less common now than they have been in the past, but they are still a viable solution for certain industries. Before buying vehicles for your business, refer to this guide to consider the pros, cons, and alternative options. For branding and marketing purposes, you could also use wrap vinyl on the car to add your logo and company information.