Considerations in Offering Employees a Company Car!

Company Car

Attracting the right talent to your business, and retaining the talent you’ve already got, is a matter of immense importance. After all, the people who work for you play an enormous role in determining the kind of results you’ll be able to achieve. 

You can attract great employees by offering an attractive salary. But potential recruits will also respond to other perks, perhaps even chauffeur services for Executives. A company car is an obvious example: it’ll make life easier for workers who might have to put in a lot of business miles.

If you’re looking to offer company cars to your employees, you’ll have a few factors to consider. Let’s run through them.

What kind of car?

Certain cars lend themselves to life in a company fleet, in a way that others do not. Remember that these cars will effectively represent not only the people who work for you, but the company itself. If your employee shows up for a serious business meeting, then they had better be driving a serious car. Otherwise, for inescapable psychological reasons, they risk not being taken seriously.

Other considerations should also be weighed. Your company cars must be safe, reliable, and fuel-efficient. For all these reasons, certain brands tend to dominate, especially at the executive level. But you needn’t spend big on them, especially if you’re willing to dip into the used market. A used Mercedes, for example, will often make a great option for a company vehicle.


When buying for a company fleet, you’re at an advantage over the average motorist. This is because you’re buying in bulk, which will give you leverage in negotiations.

There are many financing options to consider. You might buy the vehicle in question outright, lease it (either with a view to ultimately buying or without), or go for something like contract hire or hire purchase. The latter two tend to be very popular options, since they make life much simpler from the employer’s point of view.

Administrative & Tax considerations

There are several great tax incentives for employers looking to offer company cars. To begin with, you can reclaim VAT on your purchases. You’ll also be able to offset a portion of a given car’s costs as part of your capital allowances. The size of this portion will depend on the emissions, which is part of why it makes sense to go for something cleaner.

Finally, we should consider your national insurance contributions, which must be paid on the cars themselves and any fuel that goes into them.


A good company car will help persuade a worker that you value their contribution, and that you’re willing to invest in them. This can provide a significant morale boost. Moreover, in some cases you might choose to advertise using a company car, with the help of a promotional livery.

For certain sorts of business, this is a form of free mobile advertising, which often sits just in the vicinity of an example of your work!

Employee responsibility

There are potential risks involved in giving an employee a car, and most of them stem from the worker themselves. They’ll need a license to drive, and they’ll need to be able to keep the car in good condition. Personal usage will need to be limited, and those limits will need to be respected. Have a policy in place and enforce it!

Company car article and permission to publish here provided by Andrej Fedek. Originally written for Supply Chain Game Changer and published on February 16, 2023.