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Six Vehicle Trends Transforming The Construction Industry


AAG: This article delves into the transformative vehicle trends sweeping across the construction industry. As construction companies grapple with challenges ranging from cost escalations and sustainability regulations to technological integration, six pivotal trends emerge. These include the rise of vehicle reimbursement programs as a cost-containment strategy, the importance of financial monitoring, adhering to ever-tightening environmental standards, prioritizing driver safety through liability management, offering driver benefits to retain talent, and harnessing technological advancements to stay competitive. Together, these trends illuminate the evolving landscape of the construction industry and underscore the sector’s commitment to innovation, efficiency, and sustainability.


As the construction industry evolves and the demands on construction companies shift, so too do the challenges that govern elements of their business, from cost escalation to sustainability regulations. Whether it’s keeping up with technological advancement, ensuring driver safety, or determining benefits for drivers, we’ll explore six trends shaping the way the construction industry approaches vehicle programs.  

Cost Escalation: Maximize Operational Efficiency

Persistent supply chain disruptions have driven up the cost of sourcing cars and car parts for business owners in the construction sector (and inflation doesn’t help.) 

Switching from a company fleet to a vehicle reimbursement program is a pragmatic way to contain costs. Programs such as a fixed and variable tax-free allowance reimburse employees for a comprehensive range of travel-related costs, from fuel to maintenance, and the often-overlooked but substantial depreciation of vehicles. 

The fuel cost alone can weigh heavily on a firm’s operational budget, particularly when projects are spread across geographically diverse locations. Vehicle maintenance expenses compound the financial toll as vehicles visiting construction sites rigorous wear and tear due to continuous use in demanding environments. These maintenance costs, if left unchecked, can significantly erode profitability.

The wear and tear experienced by vehicles in the construction industry can rapidly decline their value over time. Depreciation not only affects the company’s balance sheet but also impacts the resale value of the vehicles. Acknowledging and addressing this aspect of travel expenses is integral to a comprehensive cost management strategy.

Construction companies can use their reimbursement programs to minimize taxes and reroute those funds to maximize operational efficiency. These programs ensure that employees are fairly reimbursed for their travel expenses and that the company’s financial books comply with the IRS’s stringent tax codes. As a result, funds that might have otherwise been lost to tax waste are safeguarded and redirected toward more productive purposes.

The funds reclaimed through tax savings represent more than mere numbers on a balance sheet; they are the lifeblood of growth and innovation. When construction companies manage their resources efficiently and minimize tax waste, they position themselves to invest in critical areas that drive productivity and profitability. These funds can be funneled into research and development initiatives, equipment upgrades, talent acquisition, or even expansion into new markets. 

Financial Monitoring: Avoiding the Fleet Management Black Hole

In the construction trade, vehicle programs can often be a financial black hole because expenses are difficult to track and manage costs effectively. In other words, fleet costs can become a black hole. Fleet management companies and lease partners could make it challenging for their clients to quantify the actual cost (or financial impact) of their fleet. 

For example, according to the most recent data, employees drive an average of 75 miles every day,[1] traveling to sites, picking up supplies, or quick trips to sign a contract. But this mileage that companies can write off as taxes at the end of the year. They just need to be using the right tools. This would equal about $10,000 in tax write-offs every year. But if that mileage goes uncaptured it therefore goes unclaimed.

Vehicle reimbursement programs can help streamline administrative processes of manual expense tracking and reimbursement, reducing the administrative burden on employees and the company. Substituting manual expense tracking with automated vehicle reimbursement programs alleviates the administrative burdens that have traditionally hampered the efficiency and productivity of traveling employees.

[1] Field Service 2012 PDF | The Aberdeen Group

 Sustainability Regulations: The Importance of Compliance

As governments and regulatory bodies impose stricter environmental standards and emissions regulations, sustainability has become an ever more critical focus in the construction industry. According to the EPA, transportation represents 28% of U.S. greenhouse gas emissions, with road transportation accounting for 81%. A sustainable fleet management strategy prioritizes fuel efficiency, reducing reduction targets, and lowering operational costs. 

So, to comply with stringent environmental regulations including the Clean Air Act, some companies today are “greening the fleet” by switching to electric vehicles (EVs) and alternative fuel vehicles (AFVs) to lower carbon emissions.  

Liability Management: Prioritizing Driver Safety

Before you procure a fleet, it helps to understand the risks associated with running a fleet. One of the biggest risks is accidents; if your employees are involved in an accident while using the company vehicle, it could cost the company a lot of money.

Since the FMC may not have sole liability, oftentimes companies are responsible for organizing their own insurance policies.

Let’s talk corporate liability. Who do you want taking on the risk associated with driving on the weekends, the individual driver, or the company they work for between 9am-5pm on weekdays? Self-insurance involves setting aside funds to cover potential accidents and other losses due to risk. By self-insuring, you’re reserving cash flow for any unexpected challenges that come towards the business.

Although self-insuring motor vehicles may seem beneficial, one of the major drawbacks is that cash won’t be used to generate revenue. Moreover, in the event of a catastrophic accident, can you be sure that you have enough funds to cover damages? What about the loss in goodwill? The impact on the company’s reputation? Relationships with partners and clients?

It costs more to insure a commercial vehicle than a personal one. A commercial insurance policy could be double a personal car insurance premium. A business use endorsement on a $1500 policy can add anywhere from $60 to $100. The presumption before the pandemic was you drove your car five days a week, so insurance policies are arranged accordingly, commercial policies being set to mitigate the high risks of driving company vehicles all day long.

Companies might seriously consider obtaining catastrophic business insurance in order to be fully protected from accidents over one million dollars. This form of insurance provides outstanding coverage for any unexpected financial losses due to a major incident.

Driver Benefits: Beyond 401(k)s and Health Benefits

Infrastructure Investment and Jobs Act: Congress passed this act in November, aiming to address some challenges, but the industry still requires about 650,000 additional workers in 2022 to meet demand. 

Retaining skilled labor is more important than ever. Today, employees are resigning due to stagnant wages amongst the rising cost of living and the lack of employee benefits. To remain competitive, construction companies are exploring creative ways to provide additional incentives to their employees beyond traditional benefits like 401(k) plans and health insurance. 

Vehicle reimbursement benefits can be a valuable perk, and construction companies are leveraging Cardata to provide fair market payments to drivers. These benefits not only enhance the financial well-being of employees but also contribute to increased job satisfaction and loyalty. 

With reimbursements, fairness is vital. Not only does this lead to better pay and profit, it increases employee retention and attracts new talent. Talented workers have more options than ever, so offering an attractive compensation package is essential. 

Technological Advancement: Staying Ahead of the Curve

The construction sector must harness the power of innovation. This entails the integration of cutting-edge construction management software, data analytics, and automation into every phase of the project lifecycle. These tools empower construction firms to optimize their operations, enhance project oversight, and mitigate the risks of external economic forces.

By leveraging cutting-edge software and data analytics, construction firms can gain deeper insights into supply chain dynamics and anticipate market shifts while fine-tuning their procurement processes.

Construction leaders are turning to software to solve data gaps, enhance efficiencies and improve profitability. By increasing visibility over driver mileage and route tracking, businesses are building their intelligence and streamlining productivity. Replace idle cars and unsubstantiated payments with accountable, tax-compliant options.

These shifts are reshaping the way the construction industry operates, particularly as companies consider restructuring their vehicle fleets. Not only does responding to these trends future-proof your business, but both employers and employees reap the benefits.


The construction industry, a stalwart of economies worldwide, is undergoing a seismic shift, driven in large part by evolving vehicle trends. From grappling with the rising operational costs due to persistent supply chain disruptions to complying with stringent sustainability regulations, the industry is pivoting towards more efficient and innovative solutions. The emergence of vehicle reimbursement programs, driven by a desire to both maximize operational efficiency and provide employee benefits, underscores the industry’s dedication to adaptability and financial prudence. With mounting emphasis on ensuring driver safety, construction companies are reevaluating their risk management strategies to safeguard both their financial assets and their most valuable resource, their employees. At the forefront of this transformation is the recognition of technology’s pivotal role in enhancing productivity and decision-making. As the construction sector embraces these trends, it not only fortifies its current standing but also charts a trajectory that ensures its relevance and resilience in the future. The implications of these shifts resonate beyond balance sheets and operational protocols; they signify a renewed commitment to growth, innovation, and the welfare of all stakeholders involved.

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