ERP & Finance Management & Fleet management
08 June 2021
What is a company's Car Policy? How and why should it be implemented? Fleet managers, this subject is likely to interest you!
When a company’s fleet of vehicles starts to grow, it may be worthwhile to set up a vehicle allocation policy by defining the allocation criteria for each category of employee.
There are many names for this: car Policy, car charter, vehicle use charter, vehicle allocation grid, or vehicle allocation policy.
What is a Car Policy or company car charter?
In the jargon of company car fleet managers, the Car Policy refers to the internal policy for allocating company vehicles to employees. It defines the rules for a fair and adapted treatment of employees according to their missions, their hierarchical position, and their seniority, as defined beforehand by the company itself.
Its implementation within the company has many advantages, for the employees, the fleet managers, and the company’s executives:
- Vehicle acquisition can be negotiated more easily;
- The fleet is guaranteed to fit the need of the company; and
- All employees who will be entitled to a company car or a company vehicle are treated equally.
Why implement a Car Policy and what are the benefits for the company?
By defining vehicle allocation criteria, the company will be able to establish its vehicle needs, estimate its mileage limits, define fleet renewal, control expenses generated by its teams’ travel, and adapt its fleet management accordingly.
The company will be also able to set the number of vehicles it requires for each job category, with the help of its fleet manager and purchasing department.
This will allow the organization to negotiate the purchase prices and obtain very advantageous group rates with more interesting trade-in conditions, or negotiate long-term leasing contracts with predefined mileage limits, and plan the expenses over the years to come.
During times of ecological transition, the company will also be able to control CO2 emissions caused by its employees’ travel. Additionally, it can implement a policy for purchasing rechargeable hybrids or 100% electric vehicles and providing the technology needed to recharge their batteries.
What are the benefits of a Car Policy for an employee?
From the employee’s point of view, the Car Policy lets him know clearly what vehicle category he is entitled to according to the position he holds. It also gives him an idea of his evolution within the company, since a company car constitutes a significant benefit in kind.
It is an element of remuneration that highlights his work and integration in the company, which is recognizing and rewarding his experience and qualifications. A charter for the use of vehicles within the company also makes exchanges easier with HR.
Further, the employee will not have to finance the vehicle himself, nor will he have to pay for its maintenance, repairs, or insurance. He can also use the vehicle for personal use depending on the rules established in the Car Policy.
How do I set up a Car Policy?
First, do you need a Car Policy? Whether you do or not depends on how mature your firm is in fleet management. Some companies don’t see the need, others swear by it.
The first question the fleet manager should ask is: “What type of vehicle does the company need to serve its customers?” Furthermore, should it acquire Sedans or SUVs for its executives? Go with service cars or company cars? How about utility vehicles for its technicians? The Car Policy will help define the rules for everyone.
Then, allocation criteria must be defined. Some positions require a vehicle to visit customers, which can be a service vehicle that employees will have to bring back to the company every evening, or a company vehicle that can also be used on weekends and during vacations.
What options and equipment are needed for each type of vehicle? For example, a technician will need tools and a salesman will need a Bluetooth phone system, and both will need an efficient GPS to get to their destination quickly.
Finally, the rules for allocating cars according to the hierarchical level in each category must also be outlined. For example, a sales representative could be entitled to a city car, while a sales manager could benefit from a sedan with some additional comfort.
The Car Policy in Cegid Notilus
Cegid Notilus is a car fleet management software that allows you to centralize information and have better visibility into your fleet’s costs and status. It is possible to configure your Car Policy, owing in particular to the access to a catalogue of all vehicles marketed in France. For example, you can assign certain models (and their options) to a specific department. When a new employee arrives, you can, for example, trigger the ordering of a vehicle (if you are connected with your service providers, rental companies, and manufacturers).