Company Car Policy

Most small businesses don’t have a company car policy because they only run a few vehicles. However, before you dismiss the need for you own company car policy carefully consider the following points. Having an effective, clearly communicated policy in place can greatly cover you as a business owner / manager.

Basic benefits of a company car policy are to see your employees are:

  • Hold of a valid licence for the car / vehicle they are driving.
  • Policy documents and licences are made available for inspection.
  • Report licence changes or disqualification.
  • Correctly dealt with car accidents, road traffic and parking offences.
  • Insure vehicles for business use (employee-owned vehicles).
  • Understand their responsibility for security of both vehicles and contents.
  • Do Not attempt to drive their company car under the influence of alcohol or drugs. (including prescribed medication).

Company Car Policy facts

The officers of the Company Car Policy or the individual with delegated responsibility for licence checking are personally responsible, under The Road Traffic Act, if they allow someone to drive a company car / vehicle they are not entitled to drive.

The Employment health and safety law / policy applies to on-the-road work activities as to all work. It has been estimated that up to a third of all road car traffic accidents involve somebody who is at work at the time. It is recommended that you have a company car policy.

Company Car Policy Health and safety

Within any company car policy, health and safety should be a major consideration with both, company owned vehicles and employee-owned vehicles, particularly in light of the issues surrounding corporate manslaughter. In a recent survey, 60% of the companies admitted that they did not have a company car policy nor do they recognise driving for work as a risk. In addition, more than half said they did not assess new drivers and 16% admitted that they do not even bother to check drivers have a valid road car licence. Between one-quarter and one-third of all road car accidents involve someone who was working. It is now being recognised by many health and safety advisers that road car driver safety applies to both company vehicles and employee owned vehicles used for business. 

The H.S.E. Guidelines on Driving at Work strongly recommend that drivers’ licences are checked when they join a Company, or are first invited to drive a company car on behalf of the Company, and periodically thereafter. So in terms of administration, your company car policy is important in order to keep up to date driver records covering matters such as valid driving licences, maintenance and service records and insurance documentation.  A company car policy applies equally to all drivers that use a vehicle on company business.

Your company car policy should:

  • Ensure only drivers that have permission to do so use vehicles on company business.
  • Include a system to maintain records of the drivers driving licence and insurance policy.
  • See that the company car is driven safely and kept in a roadworthy condition and in compliance with current legislation.
  • Ensure company drivers report any accident or incident involving the Police.
  • Ensure the Company car is used only to carry goods and passengers on authorised business.
  • Inform staff of the records required by the Inland Revenue, and provide clear advice on the tax payable on the company car. 
  • The company car policy should make it clear how expenses should be claimed and authorised.
  • The company car policy should inform staff of their responsibility for loss or damage to personal property carried in Company vehicles.