What Is A Fleet Vehicle?
A fleet vehicle is a car owned or leased by a company for employees to use in the course of doing business. This article answers what companies need fleet vehicles and more.
A fleet vehicle is a car owned or leased by a company for employees to use in the course of doing business. This article answers what companies need fleet vehicles and more.
Fleet vehicles are defined as passenger cars, trucks, vans, and other light-duty vehicles that are operated by a company or organization for business purposes. These types of vehicles are typically leased or purchased in bulk and used for tasks such as sales, delivery, and customer service. Depending on the business needs of an organization, company vehicles could be a variety of different
CFOs, HRs, and Sales leaders play a critical role in allocating capital to fleet programs, running these programs, and using fleet vehicles for daily tasks. By understanding what a fleet vehicle is and how it can be used effectively, these individuals can help their organizations save money and increase productivity. Thanks for reading!
What is a fleet vehicle?
A fleet vehicle is a group of cars, vans, or other types of vehicles that are owned by and operated on behalf of a business or organization. Fleet vehicles can range from light-duty pickups and passenger cars to medium-duty box trucks and large-capacity cargo and freight vehicles. Fleet managers typically use fleet vehicles to transport goods or personnel in the course of their daily business operations. Additionally, fleet vehicles may be used for any variety of specialized tasks such as firefighting, snow plowing, waste management, law enforcement and more.
Fleet vehicles might be new cars purchased by an organization, or they might be leased rental vehicles from a fleet management company.
Typically, owning and managing a fleet requires considerable resources, as it involves a wide range of responsibilities including maintenance, tracking services, fuel utilization, driver administration methods among various other obligations related to managing an effective fleet operation.
Types of fleet vehicles
Fleet vehicles come in a variety of styles and sizes depending on the intended use. Cargo vans are ideal for transporting large amounts of goods, while passenger vans can accommodate a larger number of passengers. Pick up trucks are highly versatile, making them suitable for transporting materials or people and for plowing snow. Sedans are great for an individual who will drive many miles each day and perform their job-related duties during travel.
Corporate fleet vehicles or company cars are sometimes provided to sales reps who travel to meet clients as part of their daily work. However, trends are pushing more companies to opt for employee-owned fleet models for sales reps and merchandizers.
Businesses often find that hybrid cars both save money on fuel and reduce their carbon footprint, making them an excellent choice for corporate fleets as well.
Learn more about sustainability in car programs.
Who drives fleet cars?
Many professions involve business driving. From small businesses all the way up to enterprise, employees are on the road in fleet cars.
Fleet vehicles might be driven by workers in sales, merchandizing, transportation, or public service positions. Police departments, trucking companies, taxi cab drivers and more are all using fleet cars.
What kinds of companies have fleet vehicles?
An ever-growing range of organizations and businesses use fleet vehicles in their daily operations. This type of vehicle is used extensively in the delivery and transport industries, such as car hire companies, parcel services, and public transportation. Fleet vehicles are also commonplace in industries like construction, where they provide reliable transportation to and from worksites for employees. Fleet vehicles provide a convenient and cost-effective solution for many business owners looking to manage their fleets efficiently.
Government agencies use fleet vehicles
Government agencies around the world often make use of fleet vehicles to meet the needs of their workforce. This can range from law enforcement fleets with emergency response capabilities to service and utility fleets that are used to complete jobs at multiple locations with efficiency.
Fleet vehicles provide a cost-effective and reliable option for government agencies in need of specialized transportation, allowing them to quickly respond to situations as needed while curtailing overhead costs. There is a wide variety of types and sizes of fleet cars available, making it easy for organizations to choose a vehicle that accurately reflects the functions they need it for.
Taxicabs are fleet cars
Taxicabs often fall into the category of fleet vehicles, along with other cars used for business purposes such as delivery vehicles, rental cars, and company-owned cars. Those who use fleet vehicles must be mindful of state and local laws that regulate the operations of such vehicles, including the maintenance and insurance coverage needed for them.
While a wide variety of models may qualify as fleet cars, taxicabs typically have standard features that set them apart from other types of fleet vehicles. This is largely due to their role in public transportation services, which requires certain safety and operational standards that must be met by drivers in order to ensure reliable service for passengers.
Police departments use fleet vehicles
Police departments around the country rely heavily on fleet vehicles to carry out their duties. These specialized vehicles are often equipped with helpful features and accessories, such as screens for surveillance, communications technology, medical kits and defensive hardware. By using fleet vehicles, law enforcement personnel are provided with quick access to the necessary tools for quickly responding to emergencies.
Fleet vehicles allow police departments to be thoroughly prepared for any situation that might arise in a split second. Not only do these specialized automobiles provide a measure of safety and protection for law enforcement officers, but also optimize their ability to respond promptly and effectively to any incident or situation.
Public utilities companies have fleets
Public utilities companies often make use of fleet vehicles to carry out various tasks efficiently and cost-effectively. A fleet vehicle is typically a large motor vehicle, such as a truck or van, designed to transport multiple people or materials over long distances — allowing for greater coverage in a shorter amount of time. With fleets of vehicles dedicated for their services, these companies can ensure their staff have the resources needed to complete daily tasks without delay.
Does your organization need a fleet vehicle?
If you don’t find yourself in one of the above categories, where the vehicle itself had specialized attributes that made it especially useful for the job, then your team might not need corporate fleet vehicles. If you’re just issuing standard, unmodified SUVs or sedans to sales teams, then you could consider an employee-owned fleet of vehicles instead. You can read more about this here:
Fleet of company cars vs. reimbursement programs
Pros and cons of fleet vehicles
Fleet vehicles offer businesses a unique way to coordinate transportation needs. These vehicles typically have lower upfront and running costs than privately owned vehicles and they can often be tailored to the exact requirements of the business. However, there are some drawbacks associated with fleet vehicles, such as needing a reliable source of maintenance to ensure they continue running properly and that their use is carefully managed so that their lifetime is maximized.
Additionally, leasing or owning a fleet vehicle requires careful budgeting to cover ongoing costs such as maintenance, fuel purchasing and lease costs. An in-depth consideration of these pros and cons should be conducted before investing in fleet vehicles for a business’ transportation needs.
Pro: Branding opportunities of fleet
Fleet vehicles offer unique opportunities for branding and promotion for any business. By outfitting the fleet with a company logo or other identifying information, businesses can attract attention from customers, clients, and other interested individuals. Advertisements found on fleet vehicles are also an efficient way to get messages out to prospective consumer bases. Companies can consider graphic wraps, decals, tags, or vehicle covers for promotional purposes.
Pro: Employee perks, incentives when they get a company car
Working in a company that offers a fleet vehicle as an employee perk can be seen as an incentive for those that qualify. Not only does this provide employees with access to reliable transportation, but it also serves as a tax-effective way of providing them with additional income, since the cost associated with running and maintaining the vehicle is offset by the employer.
Furthermore, having a company car can be seen as a discretionary benefit, granting employers enhanced bargaining power during recruitment and allowing them to offer attractive remuneration packages. As such, many organizations who are looking to secure the best talent may choose to include fleet vehicles among their employee benefits.
Note, however, that with a reimbursement program, the cost of vehicle ownership is still offset for the employee, but without it being a drain on the company’s resources!
The cons of having fleet vehicles
Fleet vehicles often represent a larger upfront cost for businesses, due to the bulk purchase of multiple cars. Additionally, the company is responsible for the repairs and maintenance of these vehicles, which can be an issue as fleet vehicles are often used rigorously throughout their life. Furthermore, since these vehicle usually have extensive histories from multiple drivers, it can be difficult to determine exactly what kind of condition they are in. This can create long-term reliability issues that need to be carefully monitored.
More liability from employee accidents with fleet cars
Employers who have fleet vehicles for their employees may be exposed to a higher level of liability than businesses that do not use fleet cars. This is primarily due to the prolonged exposure of their employees driving, which increases the likelihood of an accident involving their personnel. Additionally, if any negligence were to occur while in a company car, the employer may become liable for damages that surpass the normal legal limits. It is therefore imperative for companies with a fleet vehicle program to review laws regarding employee liability and understand the full extent of their financial responsibilities.
Read this blog by Fleet Complete to see the hidden costs of fleet accidents.
Fleets are expensive Investments
Investing in a fleet of vehicles comes with an array of costs and considerations. Running a fleet consists of high total costs, including purchasing or leasing new vehicles, maintaining them, paying licensing fees and insurance. It also involves labor costs associated with having trained staff to look after the vehicles, making sure they are adequately serviced and roadworthy at all times.
Personal use chargebacks when employees drive the fleet vehicle home
Employers providing fleet vehicles as company cars to their staff may often charge back personal use of the car. This expense can be calculated in a variety of ways, depending on the policy put in place. A common approach is to charge back only non-compensatory miles that were travelled when the employee used it for personal reasons such as errands or visiting friends and family.
It is important to note that these charges will normally apply from the moment an employee obtains access to a fleet vehicle, so guidelines should always be made clear when handing over the keys. When employees are aware of any eligibility and limits on personal use of company cars, it makes for an inclusive and transparent process overall.
Overall, personal use chargebacks are not popular with staff. Indeed, because they are being told to drive a certain car, but then must pay to use that car, employees often prefer the freedom of choice associated with mileage reimbursement programs.
Resale value of owned fleet cars is low
When making the decision to purchase a fleet vehicle for use in business, it’s important to recognize that there is often a significant short-term cost savings with these types of vehicles, but there is also an equally significant decrease in resale value. Owned fleet cars typically resell for much less than their original purchase price, as buyers tend to assume these cars come with greater risks associated with uptime and reliability due to their history of usage. As such, companies should take all long-term costs and impacts into consideration before finalizing any decision regarding the acquisition of a fleet car.
Depreciation is likely the largest cost of a fleet. Make sure you’re thinking about depreciation before taking the fleet plunge!
Maintenance schedule is demanding
Maintaining a fleet vehicle is no small task. A key component of any successful fleet is an up-to-date, comprehensive maintenance schedule that caters to each and every type of vehicle in the fleet. This helps guard against unforeseen breakdowns, loss of productivity due to unplanned service, and costly repairs for neglected vehicles.
Fleet leasing providers
Working with fleet leasing providers is an important component of managing a fleet of vehicles for businesses. Because these providers specialize in fleets, they are able to offer better pricing and efficiency options to meet your company’s specific needs and will be up-to-date on any government regulations or industry requirements when it comes to vehicle policies and safety.
Purchasing fleet vehicles can be a complicated process. Fleet managers have to consider the size, purpose, and characteristics of each vehicle to ensure they are able to meet their specific needs. Additionally, they must factor in where and how the fleet will be used, as well as potential maintenance costs that may arise over time. Furthermore, numerous regulations often come into play when making such large purchasing decisions, meaning it’s critical for fleet managers to stay up-to-date on any relevant laws and guidelines before making their final decision. Ultimately, selecting the right fleet vehicles is an essential part of successful fleet management operations.
Fleet Management Companies (FMCs)
Fleet Management Companies (FMCs) are service providers that work with businesses to manage their fleet vehicles. FMCs specialize in helping organizations streamline the processes related to a fleet of cars, trucks, vans, etc., providing services such as purchase and leasing options, ongoing maintenance, fuel management and disposal strategies. By working with an FMC, businesses can ensure that their fleets are running efficiently and cost-effectively. In addition, having a professional team managing the fleets can free up staff members from having to manage tedious administrative tasks related to vehicle ownership and usage.
Fleet management software
With new advancements in fleet management software, businesses can now easily oversee their fleet of vehicles. This type of program reduces manual tracking and record-keeping as it automates routine processes. It streamlines fleets of cars, trucks and vans, tracks vehicle performance metrics, records employee driving times and logs maintenance schedules — all in one system. Additionally, having these precise records made readily available eliminates potential roadblocks that could arise later when auditing needs to take place. As a result, companies benefit from the improved efficiency and savings made possible by fleet management software.
Vehicle tracking systems, telematics, and mileage tracking
Fleet vehicle tracking systems have become increasingly popular in recent years thanks to their capabilities for measuring fuel consumption and performance, and for helping manage daily properties. Telematics is one component at the heart of these systems. This tracking technology uses GPS and other sensor data to track a vehicle’s mileage, locate its whereabouts, monitor activity levels, identify driver behavior, and calculate average driving speed. Furthermore, as vehicles equipped with telematics are used more often, they can also help manage fuel budgeting and optimize maintenance schedules—making them an invaluable asset to any organization with large fleets of vehicles.
The best solutions to vehicle tracking are generally mobile rather than hardware. Hardware telematics are just one more thing that can get lost. That where software mileage trackers overperform.
Read on to learn about all the different kinds of mileage tracking in 2023.
Purchasing a used fleet vehicle for personal use
Purchasing a used fleet vehicle is a great option for individuals and businesses looking to acquire a dependable vehicle at an affordable price. Before making any purchase, it is important to test drive the vehicle and make sure it meets your needs and expectations. Additionally, consider checking vehicle history reports from services such as CarFax so you have more insight into the car’s past and any potential issues it may have before agreeing to a purchase. Finally, for those looking for more options or discounts, there are a variety of used fleet vehicle auctions which can offer discounted cars that still adhere to some of the standards in quality control as when buying directly from the dealer.
Fleet vehicles are important for many businesses and there are a lot of things to consider before making the decision to have a fleet. From advantages like perks for employees and branding opportunities, to disadvantages like high costs and maintenance schedules, fleet cars are not a small investment.
If you decide that having a fleet is right for your company, there are steps you can take to get the most out of your purchase. You should also track your mileage and fuel usage with Vehicle Tracking Systems (VTS) or Telematics systems; this will help you keep tabs on your assets and fleet’s whereabouts as well as maintain control over fuel costs. FMCs or software can make managing large numbers of vehicles easier but be sure to do your research as different companies offer different services. Purchasing used vehicles is always an option and has its own set of pros and cons. Weigh all factors carefully before choosing whether or not having a corporate fleet is best for your business interests.
If you don’t think that a fleet of vehicles is right for you, employee-owned driving systems exist and can save companies money, time, and even help with recruitment efforts. Learn more about mileage reimbursement solutions here.
Disclaimer: nothing contained in this blog post is legal or accounting advice. Consult your lawyer or accountant 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. 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.