We hear this all of the time “we have company cars”. So that begs the question, Why? There are times a company vehicle is necessary; delivery services or specialized vehicles, but what about buying or leasing standard cars. Well we have done an analysis to look at these options and since we are finance people we look at the bottom line; money. How much does it really cost to provide a company vehicle:
- Purchase costs
What have we found? Well, it is approximately 70 cents per mile to buy or lease a car (and even more if the car is not fully utilized) vs. the maximum mileage rate per the IRS of 55.5 cents. And what about the “other expenses”?
- Personal user of vehicle
- Rental vehicles during maintenance
- Idle or low use vehicles
- Increased liability & insurance; what if the car is used personally and your employee is negligent
With mileage reimbursement you only pay for miles driven on business and with CompanyMileage we can help lower these costs by 25% by accurately calculating the mileage.Bottom Line; why buy/lease when you can just reimburse for 20% less