Company Car Policy
A company car policy outlines the guidelines for using company-owned or leased vehicles for both work and personal purposes. It establishes which employees are eligible to use these vehicles to meet their transportation needs, whether related to work or personal activities. There are two types of policies: the company-owned car policy and the company car lease policy. A company-owned car is purchased by the company and can be used by employees for work and, with approval, for personal activities. In some cases, personal use of the car is offered as a benefit. A company car lease policy involves the company entering an agreement with a leasing firm, where the car is leased rather than owned. Leased cars often come with restrictions on usage, flexibility, and customization.
Policy Brief and Purpose
The company car policy outlines the responsibilities, guidelines, and rules for employees to lease a company vehicle for both work-related and personal use. Company cars are provided to employees to meet their transportation needs. These guidelines are designed to create a straightforward and employee-friendly policy that ensures smooth, hassle-free commuting for selected employees to perform their official duties.
Scope
This policy applies to all employees eligible for the use of a company-owned or leased vehicle for business and personal purposes.
Policy elements
Company Car Types and Availability
Eligible employees can choose between two options: the company-owned car scheme or the company-leased car scheme.
Under the company-owned car scheme, employees are provided with a company car that is insured, maintained, and customized to meet their transportation needs. The car is exclusively for work-related use, with limited personal use during work hours. Employees do not have ownership of the vehicle and cannot choose the type of car assigned to them.
Under the company-leased car scheme, employees can select the type of vehicle but are required to contribute to the lease payments, as the company has partnered with a leasing provider. Employees will have ownership of the vehicle until the end of the lease term. Early termination is possible, but the employee must pay the remaining installments and any applicable charges or penalties.
For employees with disabilities, the company will provide reasonable accommodations. However, those on medication that impairs their ability to drive will not be eligible for either car option.
Procedure for Obtaining a Company Car
Check Eligibility Criteria
To qualify for a company car, whether leased or owned, refer to the eligibility criteria. These criteria typically include the employee’s designation, a valid driving license, a clean driving record, and the number of hours traveled per day for work.
Choose a Scheme
Once eligibility is confirmed, the employee must select either the company-owned car policy or the company car lease policy. Note that with a company-owned car, employees have no ownership rights and cannot choose the type of vehicle. In contrast, a leased vehicle allows for personal selection.
Forward Requirements to HR
After selecting a scheme, the employee should forward their requirements to the HR department. For a company-owned car, the vehicle will be recorded as a company asset. For leased cars, HR will initiate contact with the leasing company, allowing the employee to choose their preferred vehicle.
Sign an Internal Agreement
The employee must sign an internal agreement regarding the maintenance, safety, and use of the company car. For leased vehicles, a separate agreement will outline the terms for purchase, use, and periodic payments throughout the lease duration.
Submit Necessary Documents
Employees must submit required documentation, which may include invoices, insurance policies, insurance cover notes, and any other documents as specified by the organization.
Obtain and Maintain the Company Car
Once all agreements are signed and documents are submitted, the company car will be delivered. Employees are responsible for maintaining the vehicle and must keep records of trips and expenses incurred during work-related travel.
Procedure for Returning a Company Car
Ensure the Car is in Good Condition Regardless of the reason for returning the vehicle, employees must return the company car in the same condition it was received. This includes:
Cleaning and vacuuming the car.
Emptying personal belongings.
Returning all keys associated with the vehicle.
Gather All Car Documents
Before returning the vehicle, ensure that all relevant documentation related to the car is collected and returned alongside the vehicle.
Return the Car According to the Scheme
Company-Owned Car: Employees can return the vehicle at any time.
Leased Car: For leased vehicles, early termination of the agreement is only permitted if the employee pays off the remaining installments and any applicable charges or penalties. Once all fees have been settled, the vehicle can be returned.
Employee Responsibilities
Employees must ensure that the vehicle is properly maintained, including regular servicing, inspections, and cleanliness.
Any personal use of the vehicle must be pre-approved by management.
Drivers must comply with traffic laws, drive safely, and avoid reckless behavior.
In case of an accident or vehicle damage, the employee must report the incident immediately to their manager and follow the company’s accident reporting procedures.
Employees are responsible for ensuring the vehicle has valid insurance, if required, and keeping the vehicle’s documentation up to date.
Company Responsibilities
The company will provide a safe and well-maintained vehicle for eligible employees.
The company will cover costs associated with work-related use, such as fuel, insurance, maintenance, and repairs.
The company will inform employees of any restrictions or limitations regarding vehicle use, particularly for leased cars.
Disciplinary Actions
Non-compliance with the company car policy, such as improper use, failure to maintain the vehicle, or violations of traffic laws, may result in disciplinary action, which can include loss of vehicle privileges or other penalties.
Disclaimer:
This policy is meant to provide general guidelines and should be used as a reference. This is not a legal document. Easy HR will not assume any legal liability that may arise from the use of this policy.