Company cars play an essential role in maintaining a company’s requirements. They provide a convenience to the company that makes their daily life run more smoothly. But is it wise to use a company car for personal use? Let’s explore this further by looking into the various aspects of using a company car.
Pros
Firstly, using a company car can prove to be beneficial in terms of cost. Since companies have access to special discounts and bulk-purchase discounts, they may be able to offer a more cost-effective car. This will be of great help to employees who may not be able to afford such a great car on their own.
Secondly, not only does this make the company car more economical for the employee, it also allows for better tax deductions. The company can apply for a tax deduction on the running costs of the car, which would reduce the financial burden of the employee. Furthermore, by using the car for personal use, the employee is enabling the company to make extra savings on fuel costs.
Lastly, company cars can also serve as important assets for employees. For example, it may enable them to see potential clients and customers, or attend networking events and other engagements. Having a trusty and reliable form of transport can thus provide them with the leverage they need to further their career.
Cons
On the other hand, there are certain downsides to using a company car for personal use. For one, there is a risk of excessive wear and tear on the car, which can result in higher maintenance costs for the company and more frequent servicing.
In addition, using the car for personal use may put the employee at a higher risk of getting into legal trouble. It is important to be aware of the local laws on the allowable usage of a company car. Exceeding this usage or driving above the speed limit could result in hefty fines or even a prison sentence.
Finally, having a company car and using it for personal use could lead employees into becoming lax about the company’s rules and regulations. They may become careless and fail to adhere to company policies and procedures, which can weaken the company’s overall image and performance.
Things to Consider
As with any decision, it is important to consider the pros and cons of using a company car for personal use. While it may seem like a great idea to have access to a reliable and cost-effective car, it is essential to be aware of the risks associated with it. Taking into account the associated laws and regulations, as well as considering the potential damage to the company and employee, can help to make the wisest decision.
Apart from that, it is necessary to ensure that the company provides adequate cover for the car when it is used for personal use. It is advisable to ensure that the driver has an adequate amount of car insurance to cover any potential loss or damage.
In addition, the company should also set a limit on the number of miles the car can be used for personal use. This should be done in order to regulate the usage and prevent any misuse of the company car.
Is It Worth It?
Whether using a company car for personal use is worth it or not will depend largely on the individual. It is important to factor in both the benefits and drawbacks associated with its usage, as well as the company policies and local regulations related to car usage. Only then can an informed decision be made.
Ultimately, the decision should depend on the individual’s needs and wants. As long as the company car is used responsibly and within the scope of the law and company policies, then it may indeed be a viable option.
Damages to the Vehicle
When it comes to using a company car for personal use, it is essential to be aware of the potential damage to the vehicle. Whether this takes the form of visible scratches or dents, or more invisible forms of damage such as fuel leaks or engine faults, it is important to remain vigilant and take good care of the car.
Indeed, damage to the car could potentially be covered by the company’s car insurance. But this is often based on the individual’s circumstances and can vary depending on the policy. It is thus important to be aware of the terms and conditions associated with the policy, as well as any additional ways of covering any potential losses.
Car Maintenance
When using a company car for personal use, it is also important to maintain its condition. This includes regular servicing and scheduled maintenance, as well as ensuring that it is clean and presentable for any potential business-related events.
When it comes to maintenance, it is advisable to ensure that the car is always in good condition, no matter how it is being used. This can be done by following a regular servicing schedule or enlisting the help of a professional car mechanic.
Moreover, it is important to bear in mind that regular maintenance does not only help to keep the car in good condition, but it also helps to ensure its longevity. This is especially true for company cars since they are used more frequently and must maintain a high standard of performance.
Insurance Coverage
When using a company car for personal use, it is important to be mindful of the insurance coverage requirements. This will depend on the individual’s circumstances and the insurance company. In some cases, it may be necessary to purchase additional coverage in order to be fully protected.
Furthermore, it is important to check that the driver has the appropriate licence needed to use the car. This is especially pertinent when it comes to company cars, as they may require a specific licence to be able to operate them.
Finally, it is advisable to ensure that any passengers that may be in the car are properly insured and appropriately licensed. This will help to cover any potential liabilities or losses arising from the use of the car for personal use.
