Company Car Policy

This company car policy template can be used to establish your company’s policy on the use of company cars by employees. It is ready to be customized to your company’s needs and circumstances.

The Policy Principle and Definition

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A company car is any vehicle owned by the company but assigned to employees for short-term or extended use. Company cars are given to employees to support their official transportation, either because it is a necessary tool in the discharge of duties, or as an occupational benefit.

The company car policy spells out company guidelines for using company cars, how employees qualify to use them, the attendant obligations, and disciplinary process in the event of a breach. The company car policy lays down a professional and legal structure to protect both the employee and the company and inform the resolution of any misunderstanding or conflict.

The Policy Provision Highlights

The company car policy applies to all employees who drive company cars, either as their main job description or in fulfillment of it thereof, or those who may be granted the use of a company car for short or long term use

Who is Eligible for a Company Car?

An employee qualifies for a company car if they satisfy these criteria:

  • They need to travel a set distance per year to meet clients, partners or agents
  • Use of a company car is an inherent prerequisite to their duties (e.g., drivers of delivery vans)
  • Their job, work contract or position in the company offers them a company car as a benefit

Assigning and revoking company cars to employees will be at the sole discretion of the company. Employees who are not assigned one but feel entitled to one should consult their respective managers or HR office for clarification.

The use of company cars outside official working hours is permissible, but employees must agree to abide by this company car policy.

Company Car Requisite Conditions

To qualify for a company car, an employee must meet the following conditions:

  • Have a valid vehicle driver’s license.
  • Have a clean driving record of a minimum of two years. This means they must not have been convicted of a traffic offense or found guilty of an accident.
  • Once the above conditions are met, employees will need to complete and sign a company vehicle form signifying understanding and acceptance of terms. A copy of the driver’s license will be attached to the form and deposited at the employee file.

Company Employees With Disability

The company is always willing to make a reasonable compromise to accommodate employees with disabilities who are equally entitled to company cars and parking spaces in the context of this company car policy. Exceptions would be employees who take medications that disrupt their sense of judgment or motor fitness, rendering them unfit to drive. Such employees, with due respect, shall not be eligible for company cars.

A Company Vehicle Driver’s Obligations

Our company requires employees with company cars to adhere to all conditions of the company car policy and to obey company rules and national laws. In particular, they must:

  • Follow all traffic laws and respect fellow motorists
  • Not use their phones in any way while driving
  • Not drive under the influence
  • Not allow unauthorized people to use company vehicle unless prompted by an emergency
  • Not to lease, sell or lend company car
  • Not smoke in the company car
  • Report damages or any mechanical issues with the assigned cars to the HR or maintenance department promptly
  • Document and keep records of all expenses associated with the use of the company car
  • Regularly check the car for optimum functionality by ensuring appropriate levels of parameters like tire pressure and car fluids
  • Not park the company car in dangerous places or leave it unlocked and unattended
  • Not use the company car to give driving lessons to another person
  • Not double park, block entrances or commit related violations that are liable for fines and vehicle impoundment
  • Whenever applicable, wear glasses and contacts while driving

An employee whose driver’s license has been suspended must report the same to HR, and the company retains the right to recall and reassign the car until such a time that the employee will be eligible to drive again.

An employee’s driving may be compromised by fatigue or sickness, in which case such employees should avoid driving. Should they fall sick during a business trip where the use of the company car is necessary, they should immediately consult with HR for proper guidance.

In Case of a Car Accident

In case of an accident with a company car, the HR department should be informed immediately so they can alert the insurance company. Employees should never accept responsibility or liability whatsoever without company endorsement.

In all such cases, a high sense of personal judgment will be required of the employee, who may wish to report the accident to the local police if it is serious. Legal guidelines must be given due regard for exchanging information with other drivers.

Company Obligations

Our company is committed to the safety of all our employees while preserving our public image and legal integrity. In pursuit of this, we shall:

  • Ensure cars are safe and serviceable before assigning them to employees
  • Ensure cars remain in good condition through regular maintenance
  • Share this company policy with all employees who are assigned company cars and require them to sign to certify that they have read and understood it. The policy will always be annexed to the general employee manual accessible to all staff
  • Insure our vehicles with a reliable company

The company will keep a comprehensive record of fleets with their mileage and dates of manufacture. Any car deemed too old or whose maintenance cost is above reasonable average may be retired at the discretion of the company. The employees shall be responsible for taking the company cars under their care for maintenance in liaison with HR or line supervisor.

It’s important to bear in mind that the company will not:

  • Pay fines for employees who are charged with traffic offenses
  • Bailout employees who are arrested while driving company cars

Reducing Company Vehicle Costs and Protecting the Environment

For all their convenience, cars are expensive to maintain, costly to use, and harmful to the environment. Our company will always choose eco-friendly cars for employees who in return are expected to exercise due diligence and responsibility in the use of company cars to save costs and minimize negative environmental impacts.

For instance, it may not be necessary to use a company car:

  • When and where public transport is reliably faster and cheaper
  • When business appointments are far enough such that it would be better to fly or take a train
  • When a business can be accomplished without it

Disciplinary Prospects

Flouting our company car policies will result in disciplinary consequences, ranging from verbal reprimands, written warning or outright revocation of the company car.

In case of more serious offenses, the company would consider termination of the employee’s contract or legal action. Such offenses include, but are not limited to, hiring the company car for commercial purposes, or being charged for dangerous driving or driving while intoxicated.

Company policy template

Download this policy sample:

Google Doc – Letter
PDF Document – Letter (.pdf)
Microsoft Word – Letter (.docx)
OpenDocument Format – Letter (.odt)
Rich Text Format – Letter (.rtf)
Plain Text – Letter (.txt)
Google Doc – A4
PDF Document – A4 (.pdf)
Microsoft Word – A4 (.docx)
OpenDocument Format – A4 (.odt)
Rich Text Format – A4 (.rtf)
Plain Text – A4 (.txt)

Disclaimer: This information is meant to provide general guidelines and should be used as a reference. It may not take into account all relevant local, state or federal laws and is not a legal document. Neither the author nor World Manager will assume any legal liability that may arise from the use of this information.

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