Our clients are saving an average of nearly $3,000 per driver per year when reimbursing their drivers for the same vehicle they had been previously providing to them.
The areas in which our clients report the greatest savings are:
- Administrative Costs
- Personal Use Expense
- Maintenance Costs
- Idle Vehicle/Disposal Costs
- Capital Expense
Administrative Costs
Administering a fleet program requires a significant investment in time and human resources. In addition, many companies pay a third party fleet provider to assist with the acquisition and administration of their fleet program.
Personal Use Expense
When providing an employee with access to a company owned or leased vehicle, the employer is often responsible for paying all costs associated with the personal use of that vehicle.
Providing drivers with a gas card or reimbursing drivers for submitted gas receipts will inadvertently result in the employer paying for 100% of their drivers’ personal gas. In this instance, there is virtually no way to distinguish “business gas” from “personal gas”. It also becomes difficult to prevent an employee from fraudulently filling up a spouse’s, child’s or friend’s vehicle at their employer’s expense.
A vehicle depreciates with every mile driven and incurs maintenance costs with every mile driven. Personal miles represent significant costs for employers.
The CRS Program considers only the business use of the vehicle when determining a fair, accurate and defensible reimbursement rate.
Maintenance Costs
Studies show that drivers do not take care of a company provided vehicle the same way they would take care of a personally owned vehicle. It is not their asset to protect. Drivers recognize that if anything happens to their company vehicle, their employer will either pay to have it fixed or will pay to replace it. As a result, maintenance costs are always significantly higher for a company provided fleet vehicle than for a personally owned vehicle.
Idle Vehicle/Disposal Costs
If a driver leaves your organization for any reason, you are still responsible for the vehicle they leave behind. The vehicle must be either turned in “upside down” in the lease, stored or transported to a different territory.
On the CRS Program, the reimbursement begins when the driver is hired and ends on the day the driver terminates. This makes for a very easy and cost-effective transition process.
Capital Expense
With a company owned fleet program, valuable funds are tied up in a quickly depreciating asset. By switching to a vehicle reimbursement program, this capital may be freed up to be invested in other areas of the business.
