The prospect of employees taking company vehicles home is as exciting as it is nerve wracking. While it can lead to huge benefits for your business and staff, with it comes some weighty potential drawbacks to consider.
If you’re considering letting your employees take your company vehicles home, then you really have two options to choose from. First, you can let employees park company vehicles at their homes and use them to commute to and from the office and job sites. The second option is allowing employees to take the vehicle home and also drive it on personal trips.
Can an employee use a company vehicle for personal use?
Allowing employees to use company vehicles for personal use is entirely up to you as a business owner. Either way, you will need to introduce a company vehicle policy that clearly defines the terms and conditions of company vehicle use.
We’ve put together this article to help you decide if letting employees take company vehicles home is the right move for your business and whether or not to let them also use it for personal use. We’ll cover the pros and cons, and offer helpful tips that you can implement to lower their risk—including how to create a company vehicle policy.
Letting employees take company vehicles home: pros & cons
There are pros and cons to letting employees take company vehicles home. All of these perks and setbacks apply when employees are driving your company vehicles and some are heightened with that added benefit of using the vehicles for personal use.
- Transportation to and from work: Your staff have reliable transportation to commute to and from work each day. This eliminates excuses for lateness or absences like, “my car broke down”.
- Recruitment appeal: This arrangement is an excellent perk to offer recruits when hiring in a competitive market. Adding this type of value to workers’ lives can help you attract the best candidates for the job. The appeal goes even further if you allow them to use the vehicles for personal use.
- Builds trust & job satisfaction: When you give employees the option to take work vehicles home with them, it establishes a level of trust between you and your employees. This level of trust goes even deeper if you let them use the vehicle for personal use.
- Cost: On one hand, you can save money by having your staff park the vehicles they use at their homes. You won’t need to pay for parking space at your office or facility. Some smaller home service businesses that do this can completely eliminate the need for any office space at all! On the other hand, if you also allow personal use of the vehicles, your fuel costs, as well as your insurance premiums, might go up — you’ll need to weigh these costs against the benefits above.
- Risk & liability: Oftentimes, tools and materials will be left in company vehicles overnight while they are parked outside your staff’s residence. If these items are not concealed properly or if they live in a neighborhood with a high crime rate, there is a risk of break-in or theft. Your company would also be liable for damages that occur during personal use.
- Privileges may be abused: When employees are given some liberties, such as taking company vehicles home, you may notice that some of these privileges get abused. For example, if an employee doesn’t follow policies and loans the vehicle to a family member, doesn’t keep the vehicle clean, or doesn’t perform regular vehicle safety checks.
If you choose to let employees take vehicles home and/or allow personal use, we recommend taking a few actions to minimize your risk as a small business.
How to lower the risk
Before you allow staff to take company vehicles home, there are a few steps you can take to make the process easier on you and your employees. Things like introducing a clearly defined company vehicle policy, offering training, and tracking the vehicles are a great place to start! Your approach will vary slightly depending on whether you allow them to simply take vehicles home and use them to commute to and from their home and job sites or if you allow them to use the vehicles for personal use.
To minimize risk and increase the safety of your drivers and vehicles, consider investing in a driver training or work safety program. This type of training can cover tips on how to drive safely, how to monitor and maintain the vehicles, where and how to park them (e.g. in a garage when possible), how to reduce the risk of break-ins and theft, how to deal with incidents like theft or accidents, and more. If employees are granted access to use the vehicles for personal use, additional training may be required to cover parking, maintenance, etc. when they are away from home.
2. Create a company vehicle policy
Company vehicle policies—sometimes referred to as company vehicle use agreements—help to outline basic rules for every employee who operates a company vehicle. It also describes the disciplinary actions that result from a lack of compliance.
How to create a company vehicle policy for personal use
Below we have outlined the most important items to include in your personal use company vehicle policy. Please use these as a guideline to building your own customized policy that fully reflects the needs of your small business. Should you choose to allow employees to take company vehicles home and not for personal use, simply exclude some of the personal use-specific sections below.
It is important to collect driver documentation before approving the employee use of a company vehicle. Keep documentation such as the driver’s license for your records and to send to your insurance company or insurance agent.
You should also perform a background check on workers and require proof of a clean driving record for an established number of years.
b. Personal use
If your policy allows employees to park their company vehicle at their home each night and use it for commuting to and from the office and jobs, but doesn’t allow for it to be used for personal use, it’s important detail what does and doesn’t count as personal use. For example, errands between jobs are inevitable; doctor’s appointments, stopping at the bank after work, picking their kids up from school, etc. It would be impractical for employees to go home to switch from their work vehicles to their personal vehicles.
Listing acceptable actions within the policy is important, along with listing what’s not acceptable. Activities that are higher risk for insurance complications, damage, or theft might make your ‘unacceptable activities list’. For example, taking the company vehicle out of the city or state, driving off road, or moving paints or other potentially damaging materials. Include these things in your policy, but more importantly, make sure your employees are clear on the distinctions.
c. Driver responsibilities
This section should cover a number of important driver responsibilities. It can include, but is not limited to, the following:
- Always lock vehicle doors.
- Monitor vehicle health by performing a daily or weekly routine safety inspection. This includes checking tire pressure, fluid levels, lights, etc.
- Document driving expenses.
- Fuel at designated stations and with certain fuel grades.
- Report damages to the vehicle or caused by the vehicle immediately.
- Report license suspensions immediately or any chances to driving status.
d. Driver rules
These are more serious policy items for drivers to follow, which could help control and reduce liabilities. If any of these rules are not followed, it could mean suspension of driving privileges or termination of employment.
- Obey traffic laws.
- No driving while intoxicated, fatigued, or medicated.
- No smoking in the vehicle.
- No distracted driving. For example, no driving while operating a phone or electronic device.
- No lending out the vehicle or allowing unauthorized drivers to operate it (unless required in an emergency).
It is important to include that all work safety rules apply when a company vehicle is used for personal purposes.
This includes break-ins, theft, stolen property (tools or the vehicles themselves), and accident procedures. It should include the procedures for staff to take should any of these incidents occur. For example, should an accident occur, employees will need to know how to deal with this accordingly. E.g. contacting the business owner immediately, following legal guidelines for exchanging information with other drivers, reporting the accident to the police if required, and never guaranteeing payment to the other driver or accepting responsibility without company authorization.
3. Track your fleet using GPS
When your staff knows that your company vehicles are being tracked, they’re much more likely to comply with your policies. As well, if anything goes wrong — either — you’ll have a record of where the vehicle was and when, and how safely it was being driven.
For business owners who might be on the fence about whether to allow personal use of company vehicles, adding GPS tracking is a great way to get some peace of mind. You can offer this perk to your employees without worrying about whether your policies are being abused.
Force by Mojio offers GPS fleet tracking for small businesses across North America. We give owners full visibility into vehicle health and driver behavior. For more information on Force’s tracking solutions call 806-855-8255 or start your free trial today and see first-hand how Force can work for your fleet. We’ll ship the tracking device to you free of charge and there is no pressure to continue after the trial.