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Our PageToday’s businesses need flexibility, especially when it comes to managing their fleets of company cars. Rising fuel costs, inflation, sustainability pressures, and evolving employee preferences are driving organizations to rethink how they approach fleet management. So now enter mixed fleet solutions: A strategic combination of company cars and personal vehicles under a Vehicle Reimbursement Program (VRP).
Let’s break down why a mixed fleet could be the game-changer your business needs and how it can help you cut costs, streamline operations, and future-proof your fleet.
What are mixed fleet solutions?
A mixed fleet is exactly what it sounds like: combining company vehicles with employees’ personal vehicles for business use. Employees who drive personal vehicles are typically reimbursed through a FAVR reimbursement program or similar VRP models, which means fair compensation while keeping operations efficient.
Here’s where it shines:
- Company cars are perfect for roles requiring heavy-duty use, branding, or specialized equipment (think construction).
- VRPs work great for employees who drive less frequently or who don’t need a dedicated company car but still use their vehicle for business purposes (think sales)
This mixed model keeps your fleet nimble, reduces overhead, and empowers employees with choice and flexibility.
Financial benefits
Reduced Fixed Costs
Owning a fleet of company vehicles is expensive. From leasing payments to depreciation and maintenance costs, these expenses pile up fast. Mixed fleet solutions let you offload some of these burdens. By reimbursing employees for personal vehicle use, you minimize the need for new vehicles, insurance premiums, and repair costs.
Here’s an example. Maintaining a company car can cost you around $8,500 per year (not including fuel). Shifting to a VRP reduces this to mileage-based payments, which are obviously much lower.
Optimized Reimbursements
With the right fleet management tools and a smart reimbursement program, you can make sure that mileage payments align with IRS guidelines, keeping reimbursements tax-free and cost-effective.
The 2025 IRS mileage rate is 70 cents per mile, meaning businesses can offer fair, accurate reimbursements without incurring taxable benefits.
Lower Fleet Management Costs
Mixed fleets reduce reliance on large company fleets, making room for better fleet management cost analysis. By scaling down and using telematics to track both company and personal vehicles, businesses can cut fuel costs, optimize routes, and avoid unnecessary expenses.
Fact: Businesses spend an average of $0.64 per mile on fleet vehicles. A hybrid model can bring this number down significantly.
Tax Advantages
Shifting employees to a FAVR reimbursement program eliminates the tax inefficiencies of flat allowances, which are taxable as income. This transition alone could save your company tens of thousands annually in unnecessary taxes.
Streamlining fleet operations with tech
Managing a mixed fleet doesn’t have to be complicated because fleet management technology does the heavy lifting.
Automation
Streamline reimbursement payments, fuel card tracking, and vehicle maintenance schedules with integrated fleet software.
Real-time telematics
Monitor driver behavior, reduce fuel waste, and improve fleet risk management with real-time data insights.
Payment solutions
Centralize all vehicle-related expenses like fuel, EV charging, leasing costs, and maintenance into a single dashboard.
The best fleet management software supports seamless integration of company cars and personal vehicles, simplifying administration and cutting back on manual tasks.
Flexibility for your business and employees
Mixed fleets aren’t just about cost savings they’re about aligning with both your business needs and your employees’ preferences.
Employee Benefits
- Drivers who use their personal vehicles for business mileage have the freedom to drive the car they want.
- Fair mileage reimbursement means they’re compensated for wear and tear, fuel costs, and other expenses.
- Employees don’t need to worry about restrictions associated with company cars (like personal use charges).
Business Flexibility
- Scale up or down depending on demand, which is ideal for construction fleet management or businesses with seasonal peaks.
- Shift capital expenses from vehicle ownership to more flexible operational costs, keeping your bottom line healthy.
Overcoming challenges
Admin Complexity
Managing two fleet systems (company cars and VRPs) might seem daunting, but fleet management solutions simplify the process. Use automation and real-time telematics to track mileage, manage reimbursements, and maintain compliance with IRS mileage rates.
Employee Resistance
Some drivers may worry about losing company cars, but with education on the benefits of FAVR programs (e.g., tax-free payments, heftier reimbursements, choice of vehicle), most concerns can be addressed.
Fleet Divestment
Selling off fleet vehicles can be tricky, but phased transitions, rebates, and partnerships with remarketing experts make it manageable.
A real-world success story
One mid-sized logistics company transitioned 40% of its fleet to a VRP. Here’s what they saw:
- 30% reduction in fleet management costs by decreasing reliance on company cars.
- Increased driver satisfaction thanks to fair reimbursement for personal vehicles.
- Lower attrition rates thanks to aforementioned employee satisfaction
Is a mixed fleet right for you?
If your fleet is bogged down by high maintenance costs, inefficiencies, or rigid systems, it’s time to rethink your strategy. Mixed fleets deliver cost-effective flexibility for businesses of all sizes, smarter fleet operations with optimized tools and technology and a path toward sustainability and financial freedom.
Final thoughts
Mixed fleet solutions aren’t just a trend—they’re the future of corporate fleet management. By blending company vehicles with personal vehicles under reimbursement programs, businesses can reduce costs, increase flexibility, and align their strategies with modern challenges like sustainability and driver satisfaction.
Whether you’re running a construction fleet, managing small business needs, or scaling for growth, a mixed fleet approach could transform your operations. Start exploring how mixed fleets can optimize your business today.
Need help implementing a mixed fleet strategy? Let Cardata guide the way.
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