Vehicles As Employee Benefits
BY: Jac Guerrero • Jan 10, 2020
A successful company is usually made-up of empowered individuals. Empowerment comes from different forms and depends on job descriptions. Most often, it is relative to the position and tasks.
One of the most effective tools in empowering an employee is a vehicle. The company vehicles are normally classified as a ‘Service/Company Vehicle’ or as an ‘Assigned to the Employee Vehicle.’ There are also times that you would see a company giving out cash for vehicle benefits and allow the employees to choose whatever they feel will suit them.
In most cases, the free use or assignment of vehicles is part of the benefits being enjoyed by employees. It may not be present in all organizations but employees can expect it at big corporations especially if the job requires it.
These are the common practices for vehicles benefits:
1. Company or Service Vehicle
The company or service vehicle arrangement is an effective and practical tool in making sure that the concerned employee’s tasks can be finished on time. It can be issued either to the employee or to a department as part of their trade tools. The company chooses the make and brand of the vehicle for it must suit the business purposes and funds allocated. To further maximize the use of the vehicle, the company has the prerogative to either put some ads on it to promote its products and services or maintain it as a company private vehicle by retaining the original make, color, and image of the vehicle.
For this arrangement, the company pays for the driver, vehicle maintenance, fuel, insurance, etc. The service vehicle is replaced based on a company defined equipment effectiveness and time of use.
This type of plan is present in companies with a concentration on services, logistics, infrastructure, government offices, foundations, etc.
2. Assigned Vehicle to Employees
Almost all employees aspire to have this type of vehicle benefit. The ‘Assigned Vehicle to Employee’ is a benefit where the company assigns a vehicle to an employee depending on his/her job assignment and position. The budget differs on the position and there is an assurance that the vehicle will become an employee’s asset for a nominal amount after a specifically defined time of use.
In this type of set-up, the company procures the vehicle and assigns it to the employee for his/her use only. The company allocates funds for the maintenance, fuel, and insurance of the vehicle to ensure that the employee will be able to effectively use the vehicle in performing his/her job. Some companies allow the employee to use the vehicle for personal use as a form of add-on incentive.
This program is usually in consumer and pharmaceutical companies and banking and finance industries.
3. Cash for Vehicle Benefits
There are employees who will opt to have the ‘Cash for Vehicle Benefit’. In this type of program, the company gives out the budgeted cash and allows the employee to choose his/her preferred vehicle as long as it fits the budget. The company normally allows the employee to cover the remaining amount needed for the vehicle if the employee chooses a higher and more expensive model. The vehicle is for the sole use of the employee and after a given number of years, the employee has the first right to buy the vehicle from the company.
Expenses for vehicle maintenance, fuel allowance, and insurance are still under the account of the company and it is being given to the employee on a monthly basis.
This type of arrangement is currently being applied at selected industries like Telecommunications and Consulting Groups, and most of the time given to management positions.
These three different practices for vehicle benefits may differ depending on the company’s guidelines and management’s decisions and capabilities. Relatively, this type of business tool enhances the employees’ performance and provides felt incentives to the employees. Enjoy the company benefits!