Fleet Allowance & Reimbursement
For a variety of reasons, many companies choose to reimburse their people for the business use of their vehicle. High turnover, uncomfortable limiting vehicle choice, low kilometre applications and the burden of managing a company vehicle fleet can all be influential factors in choosing this strategy.
Companies typically handle reimbursement in one of two ways: through an allowance or a reimbursement by kilometre approach. Offering your people an allowance is the easier of the two approaches, but it shifts the burden of tax treatment to your people and can often be the least equitable. For instance, someone who drives 30,000 business km’s per year is given the same allowance as someone who drives 15,000.
Reimbursement, on the other hand, is typically fair from a kilometre reimbursement rate (see chart below). But there are many fixed expenses to owning a vehicle and this approach does not necessarily reimburse every employee fairly. There are other options available called Fixed and Variable Rate (FAVR) Plans that offer a fixed allowance combined with a kilometre reimbursement. This option is most fair, but difficult to administer and manage, so it is rarely used.
A company provided option is a smart solution for your employees. The cost of providing vehicles is often less than what companies reimburse their employees and it provides a valuable employee benefit that could help to recruit, retain, and potentially provide you with valuable marketing opportunities to promote your business.
We often hear that the administrative burden of managing all the costs and activities of company vehicles is what businesses struggle with most, and this is where we can help. Enterprise provides you with a local account team to act as your fleet manager, handling every aspect of the fleet, from the research for vehicle selection, to maintenance, fuel, risk management and all the registration and titling transactions. All of this can be consolidated into one monthly bill. Our team will handle all the logistics of working with your drivers to get vehicles in and out of service and handle all calls to manage the maintenance and physical damage activity, setting you up for a seamless transition into implementing a company vehicle program.
The proof is in the numbers. See for yourself with our proprietary tools that break down your total operational cost factor by factor, including tax, cost of funds, inflation and time value of money. You’ll be able to compare your present reimbursement program against a company provided program with ease and understanding, discovering how companies are able to cut their overall costs from 10-20% by implementing a fleet management solution.
We have successfully implemented plans in a variety of industries – healthcare, courier, security, product promotion, home-related services, sales and executive fleets. With the flexibility to assess the opportunity, we have the experience to discover the optimal approach to consider for your unique situation. Whether you manage a team locally or nationwide, learn how Enterprise Fleet Management can help.
Keeping track of all the transactions that make up your total cost of ownership and setting up the procedures to monitor them is not easy. Enterprise offers the systems and the expertise to represent your company’s checkbook to not only save you money, but allow your team to focus on what is most important – your customers.
One of the most important steps to optimizing your fleet’s potential is choosing the right vehicles. We’ve got the vehicle selection tools and industry experience to help you make the right choice.
Tracking and analysis of your fleet’s operations day-to-day and throughout its entire lifecycle gives you confidence that you are making the right decisions to operate at the lowest possible cost.
Enterprise has been helping the needs of local and state municipalities as well as the nonprofit community for over 55 years. We understand the needs of your organization and are committed to assisting you in the management and reduction of core expenses, freeing up cash to invest in the people you serve.