Vehicle Profile (Program Standard Vehicle)

A vehicle profile, or program standard vehicle, is a hypothetical vehicle used to calculate reimbursement rates, typically used in Fixed and Variable Rate (FAVR) programs.

FAVR reimburses employees for the real, business-required cost of owning and operating a personal vehicle for work. Instead of basing payments on each driver’s actual vehicle, the program uses a standardized vehicle profile to represent typical ownership and operating costs in a given location, and for a given role.

Vehicle profiles can be based on a specific make and model or a general category, such as a midsize sedan. This profile, along with factors like retention cycle and expected mileage, is used to calculate both the fixed and variable portions of reimbursement.

Because payments are tied to the profile, more expensive or less fuel-efficient vehicles will generally result in higher reimbursement rates.

Vehicle profiles also play an important role in compliance. A driver’s personal vehicle is compared against the profile to determine vehicle age and vehicle cost compliance, helping ensure mileage reimbursements remain accurate and aligned with IRS rules.