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Company Vehicle Policy; What Is It, and Why Have it?

Posted by Wilmar, Inc.

company vehicle policy

Business owners who wouldn't allow an employee to set foot in a worksite without safety gear surprisingly allow them to drive company vehicles without any policies to govern them. If you're a business owner and fit such a description, then it's vital you put a firm company vehicle policy in place. 

Doing so is for your good as fleet vehicle accidents are among the most expensive injury claims that a business can face. 

Additionally, when a company car is involved in a traffic accident, it puts not only money on the line, but the welfare of your employees and the reputation of your company as well.

vehicle management guide

What is a Company Vehicle Policy?

As the name implies, a company vehicle agreement is a set of guidelines which outline employees eligible for the company's fleet of vehicles.

It also governs those employed to drive the company's cars. This policy is created with the sole aim of ensuring the employees eligible for an entity's vehicles use them properly.

Thus, the entity has the right to amend or terminate this policy at any given time.

Some of the vehicles under this policy include but not limited to work trucks, graders, or regular cars.

A good policy usually explains:

  • What a company vehicle is,
  • The business or work-related uses of a company vehicle
  • The permitted personal uses of a company vehicle

In most businesses, employees are eligible for a company vehicle if:

  • They travel for more than the required number of miles per year for work-related duties such as meeting with customers or vendors.
  • They need to use a company vehicle as part of their daily job, for instance; delivery drivers.
  • It's a benefit of their job.

Once assigned a company car, employees are usually allowed to drive it beyond working hours. However, even then, they are expected to adhere to the requirements of the policy.


company vehicle policy

Why is a Company Vehicle Policy of the Essence?

Providing company cars to your employees is a good idea. It helps them perform their duties efficiently. For instance, get to work early and meet clients on time. A company vehicle policy is of the essence as it;

  • Promotes Clarity

A formal and easy to understand company car policy promotes clarity in that it makes it clear to employees what they can or cannot do using the company's vehicle.

  • Accountability

With a clear and consistent car policy in place, it's easy for you to hold drivers or any other party accountable when they fail to meet their responsibilities.

For instance, if an employee is arrested driving recklessly and your policy is against this, it'll be easier for you to hold them accountable for their actions.

 Keep in mind your policy is what the law, regulators, and even insurance company use to hold you accountable.

So when an employee causes an accident through drunk driving, and you had no policy in place, chances are your insurer will reject your claim. In other words, a formal and well-documented policy can help limit your liability when an employee violates a particular rule while using a company car. 


A company car can be of great benefit to your employees, especially if your business premise is remotely located.

Also, giving employees a vehicle proves that you care for their wellbeing and appreciate the role they play in your company. Hence it motivates them to work even harder.

 However, put a company vehicle policy in place to safeguard the reputation and limit the liability of your company in the event an employee violates it.

That said, learn how Wilmar Inc. can help you manage and increase the efficiency of your fleet today!

fleet safety guide

Topics: Fleet Safety, Fleet Management


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