Cars Cost Money Even When They’re Not on the Road
On the surface, company cars seem like a smart solution to your mobility problem. They’re a nice incentive for prospective employees, they’re a free advertising opportunity and they make your company look official. And, as long as you use them often, you’re getting your money’s worth, right?
Unfortunately, no, and the coronavirus pandemic has only made company cars a more expensive option for your organization.
Company Cars Are a Fixed Expense
Regardless if a company car is being driven regularly for work or not, the operating costs – purchase costs, interest, depreciation, inspections, insurance, regular maintenance, taxes – still exist for that vehicle. In fact, every hour a car spends sitting in a parking spot, it’s costing you money while not bringing any value to your operations. And, when a car is being driven, whether for personal or work-related travel, it exposes your company to liability should an accident occur.
All told, each mobile worker driving a company car costs an average of $11,619 annually, according to the 2019 Mobile Workforce Benchmark Report. If you’re cringing at that number, don’t worry, so are we. These costs are particularly hard to swallow during the age of COVID-19 where many companies have transitioned their workforce to working from home rather than risk exposing them to the coronavirus. Not only are you still paying for these vehicles, but you aren’t even getting a return on investment.
Mileage Reimbursement Offers More Flexibility
If you don’t have a mileage reimbursement program at your organization, this is essentially how it works. Mobile workers drive their own vehicles for work-related travel and keep contemporaneous records of their mileage. They use this information to submit a reimbursement request. Instead of paying for all of these other expenses, you only pay employees for the miles they drove; it’s completely variable. To make this even easier, the IRS sets a standard mileage rate each year (for 2020, it’s $0.58 per mile) so you don’t have to calculate actual expenses unless you want to.
On average, reimbursement programs cost 38% less for organizations than company-provided vehicle programs. We can expect this gap to become more significant during the pandemic, as well, since workers will be driving less.
CompanyMileage Customers Save More on Mileage Costs
SureMileage by CompanyMileage provides employers with a secure and accurate system for employees to manage mileage reimbursement. Rather than verifying the miles that were driven, SureMileage calculates the expenses to be reimbursed. It’s a new approach to an old problem – one that is only made worse by the use of company cars. Customers see an average return on investment of ten times the cost of our solution, and some see even more.
If you’re still paying for the cost of operating a fleet of company cars, it’s time to find a more affordable solution. Request a demo with CompanyMileage today!