Don't just handover the keys!

It's pretty common now to see a company cars being offered as part of the package particularly if a role is field based or of a senior level and driving company vehicles may be a key part of many roles.

Aside issuing the vehicle itself, there are lots of other things that should be made clear to the user at the point they are made the offer of employment or take on a new role where a vehicle is part of the deal.

Contractual clauses

Typically there will be reference within the contract to the vehicle being provided and a clause which makes it clear which expenses the company will pick up the tab for. Usually this includes road tax, insurance and servicing expenses as well as fuel related to business mileage.

It is down to the company to determine whether they will allow reasonable private usage and if not this should be clearly stated within the contract terms. If you choose to allow private use, this is an important element to include in the contract so there is no ambiguity, don't forget to make it clear as to whether partners are also allowed to make use of the company vehicle.

You should be making it clear that fuel used for private use is at the individuals' expense and that the individual would be liable for any damage and costs incurred as a result of their negligence.

As an example, I used to work for a company that had a fleet of around 80 vehicles. One of the staff members was doing some gardening and thought it would be a good idea to pick up some 6ft fence panels and transport them in the company car. In the process of getting them in the car, the fence panel tore straight through the cars roof lining and took it completely off. This incident followed several minor scrapes and bangs and then we were fortunate enough to have a robust policy which meant we could start to deduct the insurance excess from the individual.

We also had incidents of ladies putting their heels through the door speakers and cars being returned in such a horrid state we needed to bring professional valeters in.

Our handbook was worth its weight in gold in these instances.

Company Vehicle Policy

There are lots of other things to consider which would sit within a formal company vehicle policy which typically include providing clarity over matters such as driving penalties and offences, whether the employee needs to contribute to, or pay in full any insurance excess for damage due to negligence.

You may find this difficult to believe, but you really should be spelling out the most obvious things to your drivers, such as not to use a mobile phone whilst driving. If you, as an employer, haven't told your employees to do something (or not to do something) you could be held liable if they cause an accident whilst driving on your business.

Also, if your staff are driving branded vehicles they can easily bring your business into disrepute by poor driving standards. Your policy could cover how such complaints could be dealt with.

Finally, don't forget about those that drive in their own vehicles on your business. This is covered by a term called 'grey fleet'. You still have obligations to them and you should again make it clear about their behaviour and the potential consequences.

As you can see there are a variety of issues that can arise when providing company vehicles and it's important to have clear policies in place before issues arise. Should you need a review of your existing company vehicle policy or assistance in putting one into place, then please get in touch with us at

Please note our blog posts contain general information and are intended as guidance only and should not be taken as an authoritative or current interpretation of the law. Please ensure that you obtain advice tailored to your individual situation before taking action. These posts apply to the UK only.

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