Company Vehicle Programs Verses Paying IRS
Mileage To Employees
Author: Cullen Kennedy

As more and more companies develop employee vehicle programs,
it is important to understand the liabilities and benefits
versus simply paying employee IRS mileage to drive their own
personal vehicles, or use company cars. With the increase in the
IRS mileage allowance, those companies who currently pay
employees the IRS reimbursement rate for business miles are
leaving money on the table relative to having a company vehicle
program. And this is especially true for those with higher
business mile drivers.

As we review the economics, putting drivers who travel more
than 12,000 business miles a year in a company provided fuel
efficient car or SUV, like a Chevy Impala or a smaller SUV, is a
no-brainer relative to paying IRS mileage. But an important
factor to consider is what your liability exposure from either
method is, in regards to personal or business use of company
vehicles. There are some interesting facts that most people may
not be aware of when taking these decisions into consideration,
and educating oneself on the history of cases and all current
federal, state, and local laws is important.

Most businesses focus on the liability the company takes on
when adding a company vehicle program. This makes sense, and is
a common practice in order to try and evaluate potential risks
for a company. For example, if an employee is driving a company
vehicle for personal matters, and becomes involved in a personal
injury accident where they were at fault, there is liability
exposure there. And it is understandable that an employee's
company would not want to be held accountable for damages
incurred if said employee didn't follow specific rules and
guidelines regarding company vehicle use. However, the largest
liability damage awards in these cases, which are well into 7
figures, involved employees driving their own personal vehicles
on company business, not company vehicles on personal business.
So now the situation is reversed, and if the employee became
involved in a personal injury or death accident where they were
at fault, the company would then be held liable for a higher
portion of damages.

So the facts speak for themselves in this case; larger
liability exposure comes from allowing employees to drive
personal vehicles on company business, and not the other way
around. And sometimes driving a personal vehicle for company
business is a common situation that can not be avoided easily,
which will put a company at a greater liability risk. Evaluating
risk is a tough decision for any individual or company, but
paying IRS mileage in addition to covering personal injury
liability becomes much more expensive than a well maintained
company vehicle program. And there are ways to further reduce
the costs of such programs, which makes them affordable for more
businesses that most people are aware of. Especially in regards
to leasing options, or using hybrid or alternative fuel cars and
trucks, there are numerous options available when choosing a
company vehicle program that is right for your business.

Copyright © Flex for the Future


About The Author: http://www.flexforthefuture.com Flex for the
Future provides alternative fuel vehicle leasing of hybrid cars
and biodiesel trucks to agricultural businesses.