How To Create A Solid Company Car Policy

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Whether your team uses vehicles for daily operations, periodic business travel, or as a fringe benefit, companies need an adequate policy and procedure for distribution. While company vehicles offer many conveniences to businesses and team members, improper use, reckless behavior, and careless mistakes can lead to liabilities and risks. Company vehicle policies serve as a guide for team members to protect the car and reduce the likelihood of adverse outcomes. 

Why Implement A Company Car Policy? 

On the surface, it may seem like having adequate car insurance and requiring team members to have a valid driver’s license is all that’s necessary to distribute a company vehicle. However, these factors are the bare minimum. For example, a team member could have a license, but their driving record is riddled with speeding tickets. Giving them a company could result in an accident. 

A company vehicle policy minimizes these risks by including eligibility requirements, rules, and consequences. When drivers know the company’s expectations, operational procedures, restrictions, and potential outcomes for misuse, they’re more inclined to be responsible when using company vehicles. 

What Should Your Company Car Policy Include? 

Now that you understand what a company vehicle policy is and why it’s important let’s look at key elements to incorporate. 

Eligibility And Prerequisites

The first consideration is who is eligible to receive a company vehicle and the prerequisites necessary to get approved. For example, anyone that uses a car to perform their jobs, travels out-of-state for business or negotiates a company vehicle as part of their hiring agreement can submit a request. However, these team members must also have a valid driver’s license and a decent driving record over the past few years. 

If a team member is eligible for a company car and meets the prerequisites but has a disability, your policy should clearly state solutions to accommodate their needs. 

Rules Of Conduct

While following local traffic laws is a given, adding additional clauses regarding team member conduct when using company vehicles is ideal. For instance, to keep drivers safe and reduce the risk of an accident, you might mandate that team members wear their seatbelts, avoid cell phone usage, and never drive under the influence. 

Company vehicle policies should also outline when a team member can and cannot use a vehicle. For example, you may opt for company use only. If personal use is allowed, you may have limitations like miles per year, maintenance responsibilities, and restrictions like allowing others to drive the vehicle. 

Rules of conduct should also include accidents.  Let’s say a driver was attending a conference in Chicago and got in a wreck. What would you want them to do? For starters, they should ensure everyone is okay (if possible). 

Next, call the local authorities to file a report and collect contact information from the driver and any witnesses. Then contact the office to notify someone to file a claim with the insurance company. The final steps would be to seek medical attention and consult a car accident lawyer in Chicago for further guidance. 

Disciplinary Action

What happens if a team member doesn’t adhere to the rules of conduct? As no one is perfect, your disciplinary action doesn’t have to be harsh the first time. You might have a one-on-one conversation to discuss where they went wrong and provide advice on how to avoid the problem in the future. 

The second time might result in a written warning or temporary suspension from using the company vehicles. However, if the team member’s behavior is repetitive, malicious, or dangerous, it may be best to prevent them from driving company vehicles immediately. 

Employer Responsibilities

Just as a lease agreement outlines landlord responsibilities, a company vehicle policy should include the employer’s obligations. Providing a safe vehicle with updated inspection stickers, registration, and insurance is at the top of the list. Other responsibilities might include scheduling maintenance and repairs, covering vehicle costs, and providing roadside assistance services. 

Company cars can quickly shift from assets to liabilities. Developing a company vehicle policy is the most practical way to reduce the likelihood of the latter. It’s an agreement between employers and team members that’s necessary to protect the vehicle and reduce the chances of risky and expensive outcomes. As you create your policy, use the above factors to ensure your contract is fair yet efficient. 

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