Seeking Advice on Creating a Company Car Policy: Viability, Costs, and Alternatives?

Dear Seniors, I am working with a mid-size organization (Reality). I have one query to put before seniors and need your inputs on the matter. My management wants to give a personal car to key people in the organization. From an administrative point of view, I need your help on the following points:

1. Whether it is viable to purchase a car in the company's name?
2. After 5 years with depreciation on the car, it will be of no use to the company. Are there any other options?
3. Fuel reimbursement policy - I need your inputs.
4. Regular maintenance, insurance costs, and any other damages while driving for personal use - who will cover these expenses?

The car is given to the employee to take home after office hours, and it is self-driven, for your information. If anyone can send me a car usage policy or something similar, it would be appreciated.

Your valuable suggestions are requested for setting up a policy for this purpose.

Regards, Dilip Bhandari HR Manager

Some guidelines for your query are as follows:

1. You can purchase a car in the company's name.

2. You can enter into an agreement with an employee who is eligible for a car.

3. You can acquire another car or sell the current car in the company's name before the full depreciation of the first car or after its depreciation.

4. You can establish a partnership with a petrol pump where the company car can be refueled on a monthly credit basis or reimbursed at actual costs based on receipts provided. However, in this scenario, tracking receipts may be challenging. You can create a fuel reimbursement policy based on employee grades or levels in your company, specifying certain kilometers and amounts to be reimbursed.

5. Regular maintenance and insurance should be managed by the company since the car is registered in the company's name.

6. If any damage occurs after office hours, the company may hold the employee accountable to a certain extent for the damage by including a clause in the car agreement.

Hope this information is helpful.

You can purchase a car in the company's name for a five-year loan. After the 5-year loan is completed, you can sell the car and then buy a new one. If you sell the car, your company will make a profit.

Petrol Reimbursement

You can be reimbursed for up to 90% of the running kilometers and the fuel cost, depending on the vehicle. Vehicle-wise fuel average should be fixed.

Maintenance Costs

Regular maintenance costs are to be covered by the company.

Regards,
Thiru

Thank you for your reply. Could you please elaborate on the 90% reimbursement for fuel based on running kilometers? Additionally, I would like to understand how we can determine the fuel cost based on the car segment. If you could provide some insights on this, I would appreciate it.

Regards,
Dilip