Company car regulations are an important issue for companies that provide company cars to their employees. There are some special considerations, especially with electric vehicles, as they tend to be more expensive than conventional vehicles and billing for electricity costs can be a challenge. In this article, we would like to explain everything you need to know about company car regulations, including car policies for electric vehicles, and provide you with practical tips for sensible company car regulations in the fleet.
What is a company car regulation?
A company car policy is an agreement between a company and its employees. It regulates the conditions under which company cars may be used. Such a regulation may list various aspects, such as the entitlement to use a company car, the term of the lease, the equipment of the company car and the use of the company car during free time. The company car policy usually consists of two parts: the car policy and the usage agreement.
The Car Policy sets out the general rules for the use of company vehicles. Here, the requirements for the vehicles, such as size or performance, are defined. The conditions of use of the vehicle are also defined, such as use for official or private purposes and the responsibilities of the driver and the company in the event of accidents or damage to the vehicle. Furthermore, the settlement of fuel costs or other costs related to the vehicle is fixed. You can find out what changes the Car Policy is undergoing in our article“From Car Policy to Mobility Budget“.
The user agreement, on the other hand, contains the individual agreements between the driver and the company. The agreement specifies who may use the company car, for what purposes it may be used, and for how long it will be made available to the employee. The term of the lease and the cost of the vehicle are also recorded here. Furthermore, the duties of the employee regarding the maintenance and repair of the vehicle are defined here.
Overall, the company car regulations, consisting of a car policy for company vehicles and a usage agreement, are an important tool for fleet management to clearly regulate the use of company vehicles in the fleet. This helps to avoid conflicts and better control the cost of using company vehicles.
What is important to consider in a company car arrangement?
When developing a company car policy for the fleet, there are several points that fleet management must pay attention to in order to create a sensible and effective policy for all parties involved.
- Involving the workforce: It is important to involve employees in the development of the company car scheme in order to take their needs and wishes into account and to ensure that the scheme is fair and transparent for everyone.
- Selection of company cars: The selection of company cars should be tailored to the needs of the company and the employees. It makes sense to choose company cars that offer value for money and ensure that they meet employees’ needs.
- Vehicle equipment: The equipment of the vehicles should also meet the requirements of the employees. Environmentally friendly technologies, such as e-vehicles, can also be considered here by fleet management.
- Use of the vehicle: The car policy for company vehicles must clearly regulate the use of the vehicle in order to avoid misunderstandings and conflicts with the fleet management. Here it is important to make clear the specifications for the private use of the vehicle as well as the use for official purposes.
- Lease term: The lease term should be selected so that the company car is ready for use for the planned period and the costs for the company remain within limits.
- Costs: The costs for the use of company cars should be shared transparently and fairly. The taxation of company cars should also be considered here.
- Maintenance and repair: The maintenance and repair of company cars should be clearly regulated to ensure that the vehicle is always ready for use.
By taking these points into consideration when drafting the company car regulations for the fleet, an effective regulation can be created that meets the needs of the employees and the company.
Company car regulation and electric mobility in the vehicle fleet
If you have e-vehicles in your fleet or are planning to integrate some, then there are various special features to consider when it comes to company car regulations. We have summarized the most important tips for you.
How does the company car scheme for electric vehicles work?
A company car scheme for electric vehicles differs in some respects from a scheme for conventional vehicles. In the car policy for electric vehicles, it is important to consider the cost of electricity, as it is an important cost factor. It should be clarified who will pay for the costs and how they will be accounted for. There are various ways to settle the electricity costs, e.g. via a charging card or via a flat rate per kilometer.
Taxation of electric company cars
There are some special features to consider when it comes to the taxation of electric company cars. Unlike conventional vehicles, only half the list price is used to calculate company car tax for electric vehicles. However, it should also be noted that the tax exemption for electric vehicles only applies up to a certain list price, and above this value there may be an increase in the tax burden. Here it is important to keep an eye on current legislation and possible changes.
Charging stations & billing of electricity costs
Another issue with company car arrangements for electric vehicles in the fleet is where the driver can charge the car and who pays for the cost. There are several options here. Fleet managers can offer their employees the option of charging the company car at home or at a public charging station. Alternatively, the vehicle fleet can also provide its own charging stations on the company premises.
There are different variants for the billing of electricity costs. One option is to issue a charging card that can be used to bill the charging station operator directly for the electricity costs. Another option is to charge a flat rate per kilometer. Here, a fixed amount is charged for each mile driven to cover the cost of electricity.
Frequently asked questions about the company car policy in the vehicle fleet
What are the benefits of a company car policy for companies and employees?
A company car policy provides companies, fleet management and drivers with a clear set of rules for the use of company vehicles. Clear regulations can prevent conflicts in the fleet, as all parties involved know what is allowed and what is not. Furthermore, companies can promote the mobility of their employees through the use of company cars, thereby increasing their flexibility in everyday business. Employees can also make private journeys through the use of company cars and thus experience financial relief.
How do company car regulations work for electric cars?
The company car regulations for electric cars work in a similar way to those for vehicles with internal combustion engines. However, there are some special features to be taken into account here. For example, the charging infrastructure and the billing of electricity costs must be regulated. The taxation of e-cars is also regulated differently than for vehicles with combustion engines. Here, the company and employees must make sure that they take advantage of the tax benefits of e-company cars and comply with all tax requirements.
As an employee, can I also use my company vehicle for private purposes?
Yes, as a rule company cars can also be used for private purposes. However, the business use of the vehicle must be in the foreground and private use may only take place within reasonable limits. The company car regulations should contain concrete specifications on how often and to what extent the vehicle may be used for private purposes. It is also important that the employer properly taxes the private use of the company car and shows this on the pay slip.