Jim Doherty, President Asurvey conducted by Automotive Fleet reports that about 71 percent of organizations allow employees to utilize company-provided vehicles for personal use, while 44 percent report no one else can use the vehicle. The millennial workforce has started to grow skeptical about this practice, largely due to the disparities in ‘personal use chargeback’ policies of organizations against the use of company-owned vehicles. “Employees of different companies feel that a chargeback of $100-150 on a monthly basis for a car that they did not choose does not benefit them, primarily because the personal use of such vehicles has a significant number of restrictions tied to company risk policies. In many cases, the cars provided to employees are just parked in garages, as the driver would neither be able to drive it anywhere else other than to the workplace nor be privileged with the flexibility of letting anyone else drive the vehicle nor be able to utilize it for family needs,” explains Jim Doherty, president of AutoReimbursement.com.
Realizing the need for a workaround that benefits employees and companies, AutoReimbursement.com offers a vehicle reimbursement program for organizations that mitigate some of the critical challenges pertaining to company cars such as risk and asset management of the vehicles. The company’s reimbursement program provides an IRS approved, non-taxable, fixed and variable plan (FAVR) that eliminates tax wastages. Furthermore, the company has compiled an extensive database—Real Cost Database—that benchmarks the cost of driving a vehicle with zip code accuracy, showcasing cost of insurance, depreciation, and local taxes and registration expenses. The plan includes variable expenses like maintenance, tires, and fuel. The Real Cost database targets actual cost in reimbursement and allows companies using vehicle fleets an option to move away from asset management that includes uncontrolled risks and expenses. For companies using a home-grown reimbursement like a taxable allowance or the IRS cents per mile, there can be significant savings by using a non-taxed program that targets geographic cost differences on every individual driver.
Our reimbursement plan is similar to a BYOD program, where we allow employees to utilize their vehicles for both personal and professional use cases
The program ensures that both parties—the driver and the company—are benefitted by the reimbursement in terms of the cost associated with the utilization of such vehicles.
The company’s employee-owned AutoReimbursement program has a five-step implementation process, wherein the firm designs the vehicle plan based on the Real Cost database for employee reimbursement. It builds a policy and a compliance plan to ensure that the program meets organizational objectives as well as IRS FAVR rules. Employees may choose to use the vehicle they already own or purchase a new one by considering parameters such as value, usability, and insurance overheads. The program is further bolstered by a Reimbursement Plan Management tool—ARC RPM—that enables employees to update from the all mobile FAVR process and enter required information from any smartphone, tablet, or laptop. Ultimately, AutoReimbursement.com calculates the employee reimbursement based on the plan chosen by the client, providing reports on the FAVR program selected, thereby crediting the equivalent reimbursement to the employee on the base vehicle based on their location.
As an extension to its reimbursement program, the company’s FAVR plan solely focuses on financial management as opposed to asset management, allowing its clients to reimburse employees based on a more accurate business expense model. “Our reimbursement plan is similar to a BYOD program, where we allow employees to utilize their vehicles for both personal and professional use cases,” adds Doherty. AutoReimbursement.com’s credibility is further bolstered by MileIQ, a Microsoft mobile app that allows employees to automatically track their miles in the background and submit business drives to the company. This feature tracks vehicle mileage data in real time, avoiding errors resulting from discrepancies causing over reimbursements from inaccurate mileage. Collectively, AutoReimbursement.com’s portfolio delivers the much-needed mobility technology for organizations, transcending the barriers of traditional employee travel expense management.
