Comparing Vehicle Reimbursement with Fuel Cards for Manufacturing Companies

Why Fuel Cards Cost More Than You Think

Fuel prices change every day, and depending on the location, the cost can vary significantly. For manufacturers, that makes fuel one of the hardest expenses to predict and control. When employees have unrestricted fuel cards, companies often end up paying for personal fuel as well, and those extra costs add up quickly. Moving to a business mileage-based fuel reimbursement program helps fix that. Because reimbursements are tied directly to business driving, manufacturers see a noticeable 25% reduction in spend. On top of the savings, this shift also reduces administrative work and creates a greater sense of fairness across the workplace.

Why Mileage-Based Reimbursement Changes the Math

Fuel cards may feel like a step forward from paper receipts, but they don’t solve the underlying problem: companies are still paying for all fuel, not business miles. You can’t press “pause” on a gas tank. That means personal fill-ups can still slip through, and instead of managing spend strategically, managers get stuck counting gallons. Mileage-based reimbursement flips the model. Instead of paying for what goes into the tank, it reimburses only the miles driven for work. No more, no less. That shift removes the gray area around personal fuel use and ties every dollar spent directly to productive business miles. On average, manufacturers that move from fuel cards to mileage-based programs see costs fall by 25%, so administrators can spend less time auditing fuel receipts and more time focusing on their core jobs.

A Smarter Path to Savings

In the first year of shifting away from fuel cards, manufacturers often see an immediate impact. That comes from a simple change. Eliminating personal use of company-paid fuel, and putting a structure around these reimbursements.

By year two, the program delivers even more. With Cardata, reimbursements remain tax-free, and finance leaders gain clear visibility into spend by region and role. You can spot cost spikes, mileage anomalies, and compliance issues in real time. And with Cardata Intelligence, reporting becomes effortless, cutting the manual work of building reports and dashboards by 70%.

For drivers, the experience is seamless. The app quietly captures trips, removes the burden of paperwork, and ensures fair, accurate reimbursement without adding extra steps. The result? A lean, transparent vehicle program that saves money while supporting your employees fairly.

Cutting Carbon While Cutting Costs

Cost savings are only half the story. While reducing expenses matters, switching to a vehicle reimbursement program also delivers meaningful efficiency and sustainability benefits. On average, each driver saves about 42 administrative hours per year. That is roughly a full work week. Because transactions flow directly into mileage apps and payroll systems, that eliminates the need for a manual receipt entry. (https://cardata.co/blog/drivers-benefit-mileage-reimbursements/).

In addition, automated trip capture ensures that only business miles are reimbursed, removing the grey area that fuel cards create. Transportation already accounts for 28% of U.S. greenhouse-gas emissions, making it one of the single largest sources of pollution that manufacturing companies can directly influence (https://cardata.co/blog/construction-vehicle-trends/). Leveraging a business mileage-based fuel reimbursement program discourages misuse and improves business-only mileage accuracy. And with fewer unnecessary gallons burned, companies can also strengthen their ESG performance.

A Smarter Way to Cut Fuel Costs

If your company has shifted from plain taxable reimbursements to fuel cards in the last couple of years, you’ve probably noticed changes in your costs. That’s progress, but for most manufacturers, the impact is modest. Fuel cards help with controls and rebates, but they rarely deliver the kind of cost transformation finance leaders are looking for. 

The bigger opportunity shows up when you move past untracked fuel cards. Companies that switch from untracked or unlimited fuel cards to a business mileage–based reimbursement. Why? Because you’re no longer paying for personal fill-ups. You’re only covering verified business miles. That’s where the real efficiency lies. Many manufacturers recover their investment in less than a year, with some reporting up to 250% ROI within 8 months when they outsource the program to specialists like Cardata (https://cardata.co/blog/quick-guide-to-taxable-car-allowances/).

Fuel cards still have their place if you need pump-level oversight, but if your goal is to unlock measurable, lasting savings, replacing those cards with a mileage-based program is the surest way to get there.

Not sure what this would look like for you? A simple side-by-side of your current fuel-card spend versus a mileage-based model, using your last two years of data, can make the picture clear. You’ll see exactly how the savings break down, and how much of that 25% could be yours. Cardata can help you run the numbers and build a practical plan to capture those savings.

Disclaimer: Nothing in this blog post is legal, accounting, or insurance advice. Consult your lawyer, accountant, or insurance agent, and do not rely on the information contained herein for any business or personal financial or legal decision-making. While we strive to be as reliable as possible, we are neither lawyers nor accountants nor agents. For several citations of IRS publications on which we base our blog content ideas, please always consult this article: https://www.cardata.co/blog/irs-rules-for-mileage-reimbursements. For Cardata’s terms of service, go here: https://www.cardata.co/terms.