The outlook of businesses toward giving employees vehicles is positive. A large number of cars are sold each year, and many are purchased by companies. Cars can be very beneficial to both the employer and the employee. However, the risks that are involved cannot be ignored.
Sometimes a business is not confined to one location. Providing a car can be very beneficial and will help your employees move around with ease.
The Top Reasons a Company Vehicle Will Help You
Here we are going to look at the pros and cons of businesses giving their employees company vehicles. If at the end you think that buying a vehicle for your employees is the right move, you might want to check out the options at Robbins Nissan.
1. A Car Can Offer Advantages for the Employee
An employee can get so many benefits by owning a company car. For instance, an employee who has a family can experience more flexibility when dealing with both family and work.
A second car might come in handy in guaranteeing that the employee will arrive at work.
There are circumstances when an employee does not even own a single car. A company car will come in handy as it will ease transportation issues since they will no longer have to experience the hassle of getting public transport.
2. They Can Be a Source of the Salary Sacrifice Scheme
A salary sacrifice scheme is an arrangement between an employer and an employee to reduce cash payments that the employee is supposed to receive. In return, the employee will get non-cash benefits. It is completely legal and can have mutual benefits for both the employer and the employee.
However, it is crucial for employers to understand that a salary sacrifice scheme does not mean that an employee can get money below the minimum wage. A contract should be established to ensure that even if there are significant changes, they can be dealt with.
When it comes to company cars, they are subject to taxes. If an employee decides to take on a salary sacrifice scheme it should be well-thought-out.
3. Source of Motivation for the Employees
A company car can be a source of motivation for employees to be more productive. In addition, they will feel valued and cared for by their employers.
4. Money and Time-saving for an Employee
Buying a car can be expensive. Therefore as an employer, you will take on buying or leasing a car and the employee won’t have to worry about doing so. In the long run, he or she can end up saving time and money that might have been used when buying a personal vehicle.
5. An Employer Gets Full Control of the Business
Sometimes a business requires special cars. It is easier to provide such kinds of cars because they will ensure productivity and they may be cost-effective. As an employer, you will have much more control, instead of an employee owning a personal vehicle. If you have many company vehicles being used by your employees, invest in a fleet management software. Managing the vehicles becomes much easier.
6. Branding
A company car gives a business the opportunity to brand them; they can be seen by many people. In the long run, the company car can help you build your business image.
However, if you end up using old cars, they can easily ruin your business image with potential customers. Also, if you are trying to convey a down-to-earth image and the employer shows up in a luxurious car, then the wrong business image will be portrayed.
The Top Reasons a Company Vehicle Might Not Be a Great Investment
Here is the thing with getting a company car – it needs to be cost-effective for you. Unless you have a good turnover and many top-notch employees to take care of, it might not be a good idea to invest in one.
1. They Are an Unnecessary Extra Expense
Getting company cars can be a source of unnecessary expense incurred by the business. For instance, if your business is located where there is easy transportation, then there is no need to get company cars for your employees.
2. The Employee Is Subjected to Taxes
Once an employee has been given a company car, then it means all the taxes that come with a car are all on the employee. An employee needs to calculate the amount of taxes that they will be subjected to pay.
3. Vehicle Liability Arguments
If for instance you buy a used car and an employee is involved in an accident due to malfunctions, the employer can be sued. The company can be held liable for the following:
- Negligent maintenance of the vehicle
- Negligent hiring
- Negligent lending
- Respondeat Superior
