Answer:
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Explanation:
A company vehicle policy is a guideline given by companies regarding the use of company vehicles. A company vehicle policy establishes which employees are eligible for a company vehicle. It also outlines the requirements for qualifying for a company car, basic rules employees must follow when using company vehicles, and disciplinary action for misusing vehicles.
All business leaders need to decide and put down on paper the policies that guide how all company vehicles are used from ordering to maintenance.
In research done by IPC on perks that employees prefer when joining an employer, 43% mentioned fully expensed company vehicles as one of them. This means that company vehicles are considered an important component of employee compensation. It is essential to have the best company vehicle policy to maintain a safe and productive fleet.
The company will purchase, issue to an employee, and meet all of the vehicle’s running and maintenance expenses. The vehicle will be registered in the company’s name. This scheme offers an employee the full usage of a car, sometimes with a limitation set down for private mileage. Mileage exceeding the set amount is charged to the employee at set rates (often benchmarked against the Automobile Association rates). According to research by IPC on company vehicle policy trends, the general practice is to dispose of the vehicle to the employee at market value after about five years.
Important points:
There are generally two models of company car benefit:
1) The fully expensed company vehicle model and
2) The total cost to the company model.
