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This report provides benchmarking data to chemical industry companies wishing to implement a vehicle reimbursement program for field employees who drive for work. The analysis examines how chemical companies can adjust their vehicle reimbursement programs to align with their financial and operational goals. This report is of use to people who make decisions about vehicle programs: from finance and operations professionals to fleet managers, this report is critical for professionals in the chemical industry.
This analysis examines vehicle reimbursement programs across the chemical industry, in companies whose employees drive personal vehicles for work. The companies in the pool were found to have operations in forty-six states and Canadian provinces with significant concentrations in Texas, Ohio, and California. Companies employ two primary reimbursement methodologies: Fixed and Variable Rate (FAVR) programs and Tax-Free Car Allowance (TFCA; IRS 463 Accountable Allowance) programs. Both approaches combine fixed monthly allowances with variable per-mile reimbursement rates to address the diverse costs of driving for work.
The data reveals a notably balanced distribution between FAVR (48.9%) and TFCA (51.1%) programs, suggesting both methodologies serve the industry’s needs. Analysis shows chemical companies typically operate with longer-distance, lower-frequency trip patterns compared to other industries, with monthly mileage averaging 1,442 miles across approximately fifty-three trips. These program characteristics reflect the unique needs of chemical industry operations, including broader geographic coverage and specialized site visits.
Section 1: industry-wide metrics
Overall program distribution
Of these the drivers in our study, we found that 48.9% of the pool were using FAVR programs, while 51.1% were using TFCA Programs
Fixed and Variable Rate (FAVR) programs are tax-free reimbursement methods that combine fixed monthly allowances with variable cents per mile rates. The FAVR approach is based on actual local costs for vehicle expenses, providing a more accurate reflection of regional variations in operating costs. However, FAVR requires detailed record-keeping and compliance measures to maintain its tax-advantaged status. FAVR programs require the following compliance measures to remain tax-free:
- Five drivers must remain on the FAVR program.
- All drivers must cover at least 5,000 miles per year.
- The standard vehicle profile must not exceed $61,200 (2025 figure; updated yearly).
Meanwhile, Tax-Free Car Allowance (TFCA) programs offer a tax-free method for vehicle reimbursement, provided the payments remain at or below the IRS standard mileage rate of 70 cents per mile for 2025. While this approach requires drivers to maintain documentation of business purposes and track their mileage, it presents a more streamlined compliance process compared to FAVR programs. Organizations can implement TFCA with relatively straightforward recordkeeping requirements while still maintaining its tax-free benefits.
Geographic footprint
Companies in the chemical industry using vehicle reimbursement programs have a broad geographic reach, spanning 46 states and provinces, including the Canadian provinces of Ontario and Quebec.
The highest concentration of drivers is found in Texas, with 17.0% of the total pool. Ohio follows as the second most concentrated area with 7.6% drivers, while California ranks third with 6.2%. Program participants maintain a particularly strong presence throughout the industrial midwest and gulf coast regions, concentrated in major chemical manufacturing corridors across North America.
These geographic patterns are in line with the concentration of the chemical industry in general—with the top states for chemical production and distribution, besides those already mentioned, being Pennsylvania and Illinois.
Industry characteristics
Analysis of vehicle use patterns in the chemical industry reveals characteristics that set it apart from other sectors. Drivers typically complete approximately 53 trips per month, with each trip averaging 27.17 miles. This translates to an average monthly mileage of 1,442 miles, or an average annual distance of 17,301 miles per driver.
The chemicals industry also has higher mileage bands compared to other industries, particularly the construction sector, with annual mileage ranging between 15,000 to 20,000 miles. (The average of all industries is approximately 11,200 miles per year.) This elevated mileage reflects the nature of chemical industry operations: extended territory coverage and regular long-distance site visits.
Table 1: key operational metrics
Metric | Industry Average |
Monthly Mileage | 1,441.74 |
Monthly Trips | 53.07 |
Miles per Trip | 27.17 |
CPM | $0.27 |
Monthly Fixed Rate | $555.44 |
Monthly Reimbursement | $926.24 |
Cost structure evolution
We analyzed twenty-two months of data, from January 2023 to October 2024, to see trends in both fixed and variable rates. Fixed rates started at $534.10 in January 2023 and showed a gradual increase over time, reaching $562.16 by October 2024. A notable surge occurred in mid-2024, with rates reaching their peak at $601.53 in September 2024.
The variable rate, measured in cents per mile (CPM), demonstrated different patterns during this period. These rates fluctuated within a range of $0.25 to $0.31, showing a moderate upward trend overall. The most stable period for variable rates was observed between April and July 2023, when rates held steady at $0.27 per mile. However, the latter part of 2024 was marked by increased volatility in these rates.
Section 2: program design considerations
Industry-specific factors
In the chemicals sector, field sales and service workers need vehicles that meet operational demands. Vehicles must be capable of transporting product samples, safety equipment and documentation while providing reliability for travel to (and onto) industrial sites. Average territory coverage of 1,442 miles per month, across regions, are standard. Representatives travel between industrial parks and plants, covering multiple states. These travel patterns require vehicles that can handle distance and road conditions.
Representatives make on average 53 trips per month to multiple facilities. Visits require access to industrial facilities, loading zones, and compliance with regulations. Vehicles must fit protective equipment while meeting entry requirements. Representatives rotate between customer locations, facilities and distribution centers in industrial clusters. Vehicles must adapt to route changes and customer needs, making reliability essential for territory management.
In 2025, FAVR vehicle reimbursement programs allow for tax-free reimbursements on vehicles that cost up to $61,200. More expensive vehicles may be suitable for chemical industry outside sales reps.
Cost management strategies
Chemical companies can tailor vehicle reimbursement programs by adjusting fixed and variable cost components based on location and business needs. For fixed costs, companies can select vehicle profiles that match job requirements while controlling MSRP thresholds, set insurance coverage levels appropriate to risk, and adjust vehicle age allowances to balance reliability with cost. Variable costs can be managed through implementing zip code-specific reimbursement rates that reflect local operating costs.
The system calculates tax-compliant rates by combining these inputs with market data, allowing companies to maintain competitive reimbursement while avoiding overpayment. For example, a sales representative in Las Vegas would receive a rate based on local fuel prices, insurance costs, and territory-specific mileage patterns, with the fixed portion reflecting the selected vehicle profile and business-use percentage. This approach ensures fair reimbursement while providing cost control levers through both fixed and variable components.
Geographic analysis
Chemical manufacturing and distribution follows distinct regional patterns aligned with industrial corridors. The Gulf Coast region, centered in Texas and Louisiana, holds the highest concentration with 20.3% of drivers, driven by proximity to petrochemical facilities and ports. The Great Lakes region follows closely at 20%, leveraging established manufacturing infrastructure and waterway access. The Northeast Corridor maintains 8.7% of drivers, serving dense industrial clusters.
Coastal regions experience higher cents per mile rates due to increased fuel prices and maintenance costs. Central states benefit from lower fixed rates due to reduced insurance premiums and vehicle costs. Remote locations command premium rates to compensate for extended travel distances and limited service infrastructure.
The chemical industry is therefore well positioned to benefit from data-based vehicle reimbursement programs, which offer geographically sensitive rates to drivers. With drivers covering diverse and large territories, local vehicle expense data is critical for fair and accurate payments to drivers using personal vehicles for work.
Recommendations
The chemical industry’s vehicle reimbursement programs reflect unique operational requirements and safety considerations not found in other sectors. With high mileage bands and widely distributed teams, mobile teams in the chemicals industry are the prime example of a workforce who can benefit from robust vehicle reimbursement programs.
Program balance shows an even split between FAVR and TFCA programs across the industry. Fixed rates trend higher than other sectors due to specialized vehicle requirements and extended mileage needs. Companies consistently report longer mileage patterns compared to other industries, reflecting the extensive territory coverage required.
Trips average 27.17 miles, significantly longer than typical sales routes (an average of 19 miles for all industries), while monthly frequency averages 53.07 trips. Monthly mileage reaches 1,442 miles, concentrated within established chemical manufacturing corridors that shape territory design.
Cost trends demonstrate steady evolution in the market. Fixed rates have shown gradual increases over the observed 22-month period, while variable rates maintain relative stability despite recent market volatility. Regional variations in costs align closely with industry concentrations, particularly in major manufacturing corridors.
For chemical companies implementing or revising their vehicle reimbursement programs, this analysis suggests that geographically-sensitive, fixed and variable rate programs (either FAVR or TFCA) can complement mobile teams who need to balance the demands of safety and compliance requirements, extended territory coverage, balance between fixed and variable costs, and regional cost variations in chemical manufacturing corridors.
The most effective programs will be those that balance cost efficiency with the unique operational requirements of the chemical industry while maintaining strict safety and compliance standards.
Sources
Chemical Sector Profile | CISA
2025 Chemical Industry Outlook | Deloitte Insights
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