Sample Company Car Policy

Sample_Documents

DISCLAIMER: This is a sample template provided for informational purposes only. It does not constitute legal, tax, or financial advice. Organizations should consult their own legal and tax advisors and tailor this document to reflect their specific business needs, geographies, and applicable laws.

Document Header

Document Title	Company Car Policy
Document Type	Company Car Policy
Category	Perquisites & Programs
Company	<Company Name>
Policy Owner	Total Rewards (<Owner Name/Title>)
Version	<Version Number>
Effective Date	<Effective Date: DD MMM YYYY>
Last Review Date	<Date>
Next Scheduled Review	<Date> (every <12/18/24> months)
Approved By	<Approver Name/Committee> on <Date>
Contact for Questions	<Email/Distribution List>

Purpose and Objectives

• Provide a clear, consistent framework for the provision and management of company cars and related benefits at <Company Name>
• Align the company car program with Total Rewards strategy, market competitiveness, cost efficiency, sustainability, and employee experience
• Mitigate legal, tax, and safety risks through defined standards, controls, and responsibilities
• Support business operations and talent needs, particularly for roles requiring frequent travel or transport of equipment
• Offer equitable access and transparent decision-making aligned with job requirements and market benchmarks

Scope and Applicability

In Scope

• Eligibility criteria for company cars and cash allowances in lieu of a company car
• Vehicle selection guidelines, acquisition methods (lease, company-owned, reimbursement), and replacement cycles
• Program financing, imputed income and taxation considerations, and employee contributions
• Fuel, charging, maintenance, insurance, accident management, and roadside assistance
• Personal use rules, driver conduct, safety, and environmental standards
• International assignment considerations and cross-border compliance
• Processes for ordering, handover, return, transfers, leaves, and termination
• Roles, responsibilities, metrics, exceptions, and governance

Out of Scope

• Sales incentive travel policies and expense reimbursement not related to company cars
• Pool vehicles used exclusively for logistics or operations unrelated to employee benefits
• Contractor, vendor, or consultant vehicle arrangements unless explicitly included by contract
• Local driver benefits (e.g., chauffeur services) outside of defined executive eligibility

Geographic Applicability

• This policy sets global minimum standards. Local addenda supplement this policy for <Country> and must comply with local laws and tax rules
• Where local laws in <Country/Region> are more protective of employees, local law prevails
• Any deviation from global minimums requires approval as per the Exceptions and Governance section

Policy Overview

• <Company Name> provides company cars to eligible employees where vehicles are essential for business needs or as part of a competitive Total Rewards package
• The program prioritizes safety, sustainability, and cost control, with standard equipment and emission criteria
• Employees may opt for a cash allowance in lieu of a company car where permitted, subject to tax and proof-of-insurance requirements
• Personal use is permitted only as described in this policy, and any tax or imputed income is the responsibility of the employee
• Vehicles remain the property of <Company Name> or the leasing provider and must be returned upon request, role change, or employment separation

Guiding Principles

• Equity and market alignment
• Transparency and data-driven decisions
• Simplicity and administrative efficiency
• Safety and environmental stewardship
• Compliance with all applicable laws and regulations

Eligibility and Vehicle Tiers

Eligibility Criteria

• Employees in roles with verified business use exceeding <X,XXX> km/month or <X> business travel days per month
• Sales, service, and field roles with customer-facing duties requiring regular travel
• Executives and senior leaders as defined by grade <Level/Grade Range>
• Employees with documented medical or accessibility needs requiring specific vehicle features
• Eligibility is subject to local approval by the manager, HR Business Partner (HRBP), and Total Rewards

Vehicle Tiers and Selection

• Vehicles are categorized by job grade and business need
• Each tier specifies maximum total cost of ownership (TCO), safety requirements, and environmental criteria

Tier	Eligible Grades	Example Vehicle Class	Monthly TCO Cap	Emission/Range Criteria	Notes
Tier 1 (Field)	<G1–G3>	Compact/Small SUV	<Amount> per month	CO2 ≤ <g/km> or EV with range ≥ <km>	Highest fuel efficiency required
Tier 2 (Professional)	<G4–G6>	Mid-size Sedan/SUV	<Amount> per month	CO2 ≤ <g/km> or EV range ≥ <km>	Standard connectivity and safety tech
Tier 3 (Manager)	<G7–G8>	Mid/Large Sedan/SUV	<Amount> per month	CO2 ≤ <g/km> or EV range ≥ <km>	Optional driver assistance packages
Tier 4 (Executive)	<G9+>	Premium Sedan/SUV	<Amount> per month	CO2 ≤ <g/km> or EV range ≥ <km>	Chauffeur service only where local law and role justify

Standard Specifications

• Minimum 5-star safety rating (where rated in <Country>), ABS, ESC, front/side airbags
• Connectivity: hands-free, navigation, and telematics compatible with fleet management systems
• Winter/summer tires as required in <Country/Region>
• EV preference where infrastructure and business needs allow; hybrids where EV is not practical
• Accessibility accommodations provided upon documented request and approval

Vehicle Procurement Options

Company-Lease or Company-Owned Vehicles

• Primary method is an operating lease through approved suppliers <Vendor Name> and <Vendor Name>
• Lease terms: <36/48> months or <X,XXX> km per month, whichever occurs first
• Early termination fees handled per vendor contract; costs due to employee-initiated changes may be charged back
• Company-owned vehicles may be used in <Country> where leasing is impractical

Cash Allowance in Lieu of Company Car

• Available in selected markets subject to local practice and legal/tax rules
• Monthly allowance by tier: Tier 1 <Amount>, Tier 2 <Amount>, Tier 3 <Amount>, Tier 4 <Amount>
• Allowances are taxable income and subject to payroll withholding
• Employees must maintain valid insurance with business-use coverage, vehicle inspections as required, and proof of compliance annually
• Reimbursement for business mileage may be provided at <Amount> per km/mile in addition to allowance where permitted, subject to local caps

Approved Makes and Models

• Procurement, Fleet, and Total Rewards maintain a list of approved vehicles per market balancing TCO, safety, and sustainability
• Requests for non-standard models require exception approval

Taxation and Reporting

• Tax treatment varies by <Country> and may result in taxable benefit-in-kind (BIK) to the employee
• Payroll will impute income for personal use and certain fringe benefits as required
• Company provides year-end statements (e.g., <Form Name>) summarizing taxable values where applicable

Illustrative BIK Methods (Examples)

• Percentage of list price: taxable benefit equals <Percentage> of manufacturer’s list price adjusted for CO2, fuel type, or EV status
• Cents-per-kilometer method: personal use kilometers multiplied by <Amount> per km
• Flat value for fuel benefit: fixed annual value of <Amount> if company funds private fuel

Example Calculation (Placeholder)

1. Vehicle list price: <Amount>
2. Applicable BIK rate: <Percentage>
3. Annual taxable benefit: <Amount> x <Percentage> = <Amount>
4. Monthly payroll imputation: <Amount> ÷ 12 = <Amount>
5. Employee marginal tax rate applied per <Country> rules

Note: These are placeholders. Consult local tax advisors in <Country> to confirm methods and rates.

Employee Contributions and Cost Controls

• Personal upgrades above tier caps are allowed where vendor supports net pay deduction; employee pays 100% of incremental cost, including taxes and insurance differentials
• Optional accessories must be business-justified or paid personally
• Private-use fuel is not covered unless stipulated; if covered, corresponding taxable benefit will be reported
• Misuse, negligence, fines, or damage outside normal wear may be charged back to the employee subject to local law
• Telematics may be used to validate mileage, safety, and maintenance compliance where permitted by law

Fuel, Charging, and Energy

Fuel Cards and EV Charging

• Eligible employees receive a fuel card for business fuel purchases; private fuel is prohibited unless explicitly allowed by local addendum
• EV charging reimbursement options:
  • Home charging: reimbursed at <Amount> per kWh with required proof (e.g., meter data) or a standardized rate per <Country>
  • Public charging: reimbursed at actuals with receipts via expense system <System Name>
  • Workplace charging: no-charge where infrastructure exists; benefit may be taxable in <Country>

Mileage Reimbursement for Private Vehicles on Business Travel

• For employees on cash allowance or temporary use of private vehicles, business mileage reimbursed at <Amount> per km/mile up to <Monthly Cap Amount>
• Odometer logs or telematics are required

Insurance and Accident Management

• Vehicles must be covered by comprehensive insurance meeting at least <Amount> third-party liability limits
• Deductible/excess per incident: <Amount> borne by <Company/Employee> based on fault and local law
• Accident protocol:

1. Ensure safety and contact emergency services
2. Notify insurer and fleet provider <Vendor Name>
3. Complete accident report within <X> hours in <System Name>
4. Arrange repair at authorized shops only

• Roadside assistance 24/7 via <Vendor Name> hotline <Number>

Maintenance, Repairs, and Replacement

• Preventive maintenance per manufacturer schedule is mandatory
• Repairs must be performed by authorized service centers
• Tire replacement: covered for normal wear; damage from abuse may be charged back
• Replacement vehicle provided for repairs exceeding <X> days, subject to availability and tier equivalency
• End-of-lease inspections conducted by <Vendor Name> under fair wear-and-tear standards published in local addendum

Personal Use and Driver Conduct

Personal Use Rules

• Personal use is permitted where local law and tax rules allow and within reasonable limits
• Commuting between home and regular work location may be considered personal use in <Country>; employees are responsible for any associated tax
• Vehicles may not be used for ride-hailing, delivery for pay, racing, towing beyond limits, or activities prohibited by insurance

Authorized Drivers and Passengers

• Only the employee and approved household members with valid licenses may drive, subject to insurer consent and local policy
• Transport of company property must be secured and comply with safety standards
• Transport of non-employee passengers is permitted for reasonable personal use; liability is governed by insurance terms

Driver Conduct and Compliance

• Drivers must hold a valid license for the vehicle type
• All traffic laws must be obeyed; fines and penalties are the employee’s responsibility
• Alcohol, drugs, or impairment while driving is strictly prohibited and may result in disciplinary action up to termination
• Mobile device use limited to hands-free operation; texting while driving is prohibited
• Fleet telematics safety scoring may be used where permitted; coaching may be required for low scores

Environmental, Safety, and Accessibility Standards

• Preference for EVs and low-emission vehicles to meet <Company Name> sustainability targets of <Percentage> EV adoption by <Year>
• Idle reduction and eco-driving practices encouraged and may be supported by training modules
• Safety features such as advanced driver assistance systems are recommended or mandatory by tier
• Reasonable accommodations for employees with disabilities or medical needs will be provided upon request, consistent with applicable laws

Ordering, Handover, and Return Process

Ordering a Vehicle

1. Manager submits eligibility request in <System Name> with business need and estimated mileage
2. Total Rewards validates tier and TCO cap; Procurement assigns approved vendor <Vendor Name>
3. Employee selects vehicle within approved list and confirms any personal upgrades
4. Fleet provider issues quotation; manager and employee acknowledge policy terms
5. PO issued by Procurement; order placed with vendor
6. Lead time communicated; temporary vehicle arranged if necessary

Vehicle Handover

1. Employee completes driver declaration and provides license documentation
2. Handover inspection checklist completed with vendor
3. Insurance, fuel/charging card, and telematics activation performed
4. Employee receives driver pack including safety and accident procedures

Vehicle Return or Replacement

1. Fleet alerts employee of end-of-term <90> days prior
2. Inspection scheduled; repair of chargeable damage may be arranged pre-return
3. Vehicle returned to designated location; final charges reconciled
4. Replacement ordering follows the standard process

Transfers, Leaves, and Terminations

Internal Transfers or Role Changes

• Eligibility reassessed; vehicle may be retained, swapped, or returned based on new role and tier
• Upgrade or downgrade aligned to new tier at next replacement cycle unless justified earlier

Leaves of Absence (LOA)

• Paid LOA: vehicle may be retained subject to local practice and tax implications
• Unpaid LOA: vehicle typically returned or suspended; employee may assume lease cost with approval
• Parental leave: follow local laws; company strives to maintain continuity while managing cost and compliance

International Assignments and Cross-Border Use

• Cross-border driving must comply with local insurance and customs requirements; obtain written approval
• On assignment to <Country>, local car policy applies; home-country car arrangements may be suspended

Termination of Employment

• Vehicle must be returned on or before last working day
• Any outstanding fines or damage charges reconciled in final pay as allowed by law
• COBRA or equivalent benefits do not apply to vehicle provision

Employee Data and Privacy

• Fleet and telematics data may be collected for safety, maintenance, and cost management in accordance with privacy laws in <Country/Region>
• Access to identifiable data is restricted to authorized roles; aggregated reporting preferred where possible
• Data retention aligned to <Company Name> policies and vendor contracts

Roles and Responsibilities

Total Rewards

• Define eligibility, tiers, and allowances; maintain global standards and local addenda
• Partner with Finance on budgeting and with Legal/Tax on compliance
• Own policy communication, training, and governance

Procurement and Fleet Management

• Select and manage vendors, negotiate contracts, and monitor service levels
• Oversee ordering, maintenance, replacements, and end-of-term processes
• Maintain approved vehicle lists and coordinate telematics

Finance and Tax

• Budget, forecast, and account for TCO; manage payroll imputation and reporting
• Validate tax treatment per <Country> and coordinate with external advisors

Legal and Compliance

• Review policy for legal risks, privacy, and regulatory compliance
• Manage claims and disputes with vendors and third parties

HR Business Partners and Managers

• Validate business need and support eligibility decisions
• Ensure employees comply with policy and complete required training

Employees

• Safely operate and maintain vehicles; follow policy and local laws
• Keep accurate mileage logs and promptly report incidents
• Pay personal-use taxes and any approved contributions

Vendors and Insurers

• Provide vehicles and services per contract; ensure SLAs and compliance
• Deliver accurate billing, reporting, and support

Implementation Guidelines

Program Design and Market Benchmarking

• Use market data from <Source/Vendor> to set TCO caps by tier and country
• Evaluate EV feasibility by region infrastructure and business patterns
• Model cash allowance versus lease cost, considering tax gross-up effects

Budgeting and Funding

• Plan annual fleet cost at <Amount> per vehicle per month by tier, inclusive of depreciation/lease, insurance, maintenance, energy, and admin
• Apply contingency of <Percentage> for fuel price volatility and residual value risk

Systems and Data Integration

• Integrate HRIS, expense, payroll, and fleet platforms (<System Names>) for eligibility, mileage, and imputation
• Establish data feeds for telematics where legally permitted

Controls and Audits

• Quarterly audit of mileage logs, fuel card transactions, and maintenance adherence
• Exception reporting for out-of-policy behavior (e.g., frequent fines, missing services)
• Annual attestation of driver’s license validity and insurance (for allowance recipients)

Change Management and Training

• Provide new-joiner driver safety training and annual refresher modules
• Communicate local tax changes that impact employee imputation
• Offer EV education (charging, range planning, reimbursement process)

Metrics and Reporting

Metric	Target/Benchmark	Frequency	Owner
Fleet TCO per vehicle vs. cap	≤ <Amount>	Quarterly	Finance
EV/low-emission adoption rate	≥ <Percentage> by <Year>	Quarterly	Total Rewards
Safety incidents per million km	↓ year-over-year	Quarterly	Fleet
On-time maintenance compliance	≥ <Percentage>	Monthly	Vendor
Employee satisfaction (driver survey)	≥ <Score/5 or % favorable>	Semi-annual	TR
Tax and payroll accuracy	100% compliant	Monthly	Payroll/Tax

Exceptions and Governance

• Exceptions must be rare, justified by business need, and time-bound
• Requests submitted via <System/Workflow Name> with supporting documentation

Approval Matrix for Exceptions

Exception Type	Minimum Approvals	Additional Requirements
Vehicle outside tier cap	Manager, HRBP, Total Rewards	Cost analysis and justification
Fuel for personal use	Manager, Finance	Tax imputation confirmation
Non-standard model or accessory	Procurement, Total Rewards	Safety and TCO review
Retention during extended LOA	HRBP, Legal	Local law compliance memo

• All approved exceptions documented and reviewed during quarterly governance meetings

Risk Management and Compliance

• Compliance with road safety laws, emissions standards, insurance regulations, and data privacy laws in <Country>
• Vendor contracts must include liability, data protection, service-level, and audit clauses
• Incident escalation protocol established for serious accidents or regulatory inquiries

Review and Approval Process

• Total Rewards maintains this policy and coordinates updates with Legal, Finance, and Procurement
• Review cadence: at least annually, or upon material changes in tax law, market costs, or business strategy
• Version control:

1. Draft prepared by Total Rewards
2. Legal/Tax review for compliance
3. Finance review for budget impact
4. Procurement and Fleet review for operational feasibility
5. Final approval by <Approver/Committee>
6. Publication in <Intranet/Policy Repository> and notification to impacted employees

Local Addenda

• Each country or region publishes a local addendum specifying:
  • Approved makes/models, fuel/charging reimbursement rates, and insurance requirements
  • Tax methods, imputation rates, and validation documentation
  • Any mandatory legal notices or translated policy terms
• Local addenda must not conflict with global minimum standards unless stricter by law

Glossary of Terms

• Benefit-in-Kind (BIK): Taxable value assigned to a non-cash benefit per local law
• Total Cost of Ownership (TCO): All-in cost including lease/depreciation, energy, maintenance, insurance, taxes, and admin
• EV: Electric Vehicle
• Hybrid: Vehicle powered by both internal combustion engine and electric motor
• Telematics: Technology that monitors vehicle usage and diagnostics
• Fair Wear and Tear: Industry standard for acceptable condition at vehicle return
• SLAs: Service Level Agreements between <Company Name> and vendors

Appendices

Appendix A: Example Allowance and Caps by Country (Placeholders)

Country	Tier 1 Cap (TCO/month)	Tier 2 Cap	Tier 3 Cap	Tier 4 Cap	Cash Allowance Range
<Country A>	<Amount>	<Amount>	<Amount>	<Amount>	<Amount>–<Amount>
<Country B>	<Amount>	<Amount>	<Amount>	<Amount>	<Amount>–<Amount>
<Country C>	<Amount>	<Amount>	<Amount>	<Amount>	<Amount>–<Amount>

Appendix B: Sample Handover Checklist (Abbreviated)

• Driver license verified and recorded
• Insurance certificate issued
• Fuel/charging card activated
• Telematics enrollment completed
• Vehicle condition documented (photos)
• Safety kit present
• Accident protocol instructions provided
• Maintenance schedule and authorized service list provided

Appendix C: Fair Wear-and-Tear Examples (Guidance)

• Acceptable: minor surface scratches under <X> cm; tire tread above <mm>
• Chargeable: cracked windshield, deep dents, tire tread below legal minimum, missing keys

Communication to Employees and Managers

This section is intended to be read by employees and managers. It summarizes the key points in plain language. For full details, refer to the policy above and your local addendum.

What This Program Offers You

• If your job requires regular driving for business or you are in an eligible role, <Company Name> may provide a company car or a cash allowance. The goal is to support your work, keep you safe, and make the experience simple

Who Is Eligible

• Eligibility is based on your role and business travel needs. Your manager and HR partner will confirm whether you qualify and which vehicle tier applies

Your Choices

• Company car: choose from approved models that meet safety and environmental standards for your tier
• Cash allowance: in some countries, you can receive a monthly allowance instead of a car. This is taxable and requires you to maintain business-use insurance. You may also claim business mileage per local rules

What the Company Covers

• Lease or vehicle cost within your tier cap, standard insurance, routine maintenance, and roadside assistance
• For EVs, workplace charging when available; home or public charging may be reimbursed per local addendum

What You Are Responsible For

• Driving safely and following all traffic laws
• Keeping the car in good condition and completing scheduled maintenance
• Paying for personal upgrades, personal fuel if not covered, and any fines or damage due to misuse
• Reporting accidents right away and following the accident protocol
• Paying any personal-use taxes required by your country’s rules

How to Get a Vehicle

1. Talk to your manager about your business need
2. If eligible, you will receive instructions to select a car within your tier
3. Confirm any personal upgrades and review the costs
4. Complete the driver declaration and provide your license
5. Pick up your car at the scheduled time and review the handover checklist with the vendor

Charging, Fuel, and Mileage

• Use your fuel or charging card for business travel
• If you receive mileage reimbursement, submit your logs and receipts using <System Name>
• For EVs, keep charging receipts as required and follow the local process for home and public charging

Personal Use and Family Drivers

• Personal use is generally allowed, but it may be taxable. Household members may drive only if they have a valid license and are permitted by insurance
• Do not use your company car for paid ride-hailing, deliveries, or other prohibited activities

When You Change Roles, Take Leave, or Leave the Company

• We will re-check eligibility if your role changes. During some leaves, you may keep the car; during others, you may need to return it. When you leave <Company Name>, return the car on or before your last day

Safety First

• Never drive under the influence of alcohol or drugs. Use hands-free if you must take a call. Seatbelts are mandatory for all occupants

Support and Contacts

• Roadside assistance: <Vendor Hotline Number> (24/7)
• Accident reporting: <System Name/Link> within <X> hours
• Policy questions: <Email/Distribution List>

Thank you for helping us maintain a safe, sustainable, and cost-effective program. Drive safely and reach out if you have questions.

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Document Information:

• Document Type: Company Car Policy
• Category: Perquisites & Programs
• Generated: August 25, 2025
• Status: Sample Template
• Next Review: <Insert Review Date>

Usage Instructions:

1. Replace all text in angle brackets < > with your company-specific information
2. Review all sections for applicability to your organization
3. Customize content to reflect your company's policies and local regulations
4. Have legal and HR leadership review before implementation
5. Update document header with your company's version control information
6. At bottom of the document you find a short example on how the content could be communicated to end-users, for instance employees.

This sample document is provided for reference only and should be customized to meet your organization's specific needs and local legal requirements.