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Should You Give Your Employees A Company Car?

Getting the best employees is vital for any company that wants to be a success and one of the easiest ways to entice people is with good benefits. If you’re offering a company car, you’ll be more likely to land the best candidates. However, offering a company car to your employees does come with its downsides and it’s not always the best choice. If you’re trying to decide whether to supply company cars, here are some of the downsides to consider.

No Transportation Issues

Getting your employees to the office every morning is your first hurdle and lateness can cost you a lot of money. Obviously, it’s down to them to arrange all of their travel but if they’re driving a beaten up old car or relying on public transport which is always prone to problems, they’re likely to be late sometimes. You can reduce the number of employees that are getting in late by providing them with a company car that’s well maintained. That way, there’s no excuse for them being late because of breakdowns or missed buses.


If an employee has an accident on the way to work in their own car, that’s nothing to do with you. But if they have an accident in a company car that you supply, it has everything to do with you. You’re liable for the maintenance on the car and if an accident happens because you haven’t taken proper care of the car, your employee is within their rights to call somebody like Sevey, Donahue & Talcott and file a compensation claim against you. You could also end up paying out money to anybody else that was involved in the accident as well.


The cost of the car itself is obviously the biggest downside most of the time but it doesn’t have to be. Of course, you’ll be paying for the cars themselves, the insurance and all of the maintenance on a load of vehicles. Those costs will soon rack up but a lot of the time you can offset them against wages. If you’re offering a company car to your employees, it might be worth offering a slightly reduced salary. Most employees will be ok with that tradeoff and you can reduce the financial burden of offering a company car. Another big benefit of offering a car instead of salary is the tax implications. The car will be tax exempt so your employees will end up paying less income tax on their earnings which is something they’ll always be on board with. Also, in order to lessen the expense, you can take a look at car sales and get good cars at low costs.

It Encourages People To Stay

Losing a valuable employee is a nightmare; you’ll have to spend the time and money finding somebody new and training them, and even then they won’t be as effective as somebody that has years of experience in the role. The reason that people leave is often that they’re getting more money or better benefits elsewhere. If you’re not offering any good benefits to your own employees, they’re far more likely to jump ship. A company car could be the incentive that makes them stay.

Getting a company car is a good way of enticing and keeping valuable employees, but you should only do it if you can bear the financial burden.