The Pros and Cons of Providing Company Cars

Many businesses choose to provide company vehicles to their employees. This is especially true for those with mobile workers, for example managers who need to travel between clients. Companies who provide vehicles do so as a perk, usually in a package of employee benefits.

Whilst there are advantages to providing company vehicles, for both the employer and employee, there are also drawbacks. In order to ascertain whether this is the right decision for your business, it’s important to weigh the pros and cons of company vehicles.



One of the more obvious advantages of company vehicles is that they provide guaranteed transportation. Jobs that require regular travel can be impractical for those who don’t own their own car, forcing them to rely on public transport. Providing a company vehicle helps to overcome this problem, boosting morale and opening the position up to more potential candidates.


When employees are working outside of the office, businesses need to trust that they’re remaining on task. However, providing a company vehicle does offer a novel solution for this problem. Some businesses will install tracking devices directly into the company vehicle. This provides direct oversight and offers peace of mind that workers are where they should be.


Marketing is an important aspect of every business but it can require a substantial investment of time and money. Branding your company vehicles offers a unique opportunity to advertise 24/7. Adding your logo, company name and contact details to a company car is a relatively cheap and easy way to boost brand awareness. Any savings that you make via this form of marketing can be used to offset the cost of the vehicle itself.



Unsurprisingly, one of the main downsides to utilising company vehicles is the costs that they incur. Not only do businesses have to think about the initial cost of buying or leasing the vehicle but also the peripheral costs, such as tax, insurance, maintenance and repairs. Whilst these vehicles may offer a variety of benefits, they also require a substantial upfront investment and therefore businesses need to ensure that this is worth the potential benefits.


Anyone who gets behind the wheel, accepts a certain level of risk that is inherently involved. The problem with company vehicles is that this risk is often placed on the business and not the driver. Therefore, should any accidents or altercations happen with the company vehicle, it will be the business who is liable. This can mean paying out damages or facing a more expensive insurance bill. Not to mention, any poor behaviour behind the wheel of a company car can lead to brand damage, especially if you’re using the car for advertising.


There are specific corporate responsibilities that come along with the use of a company vehicle. For example, businesses need to keep track of usage in order to claim the relevant expenses from HMRC. They’re also seen as a “fringe benefit” and companies will have to keep up to date documentation in order to pay the right tax. This is all on top of the normal paperwork involved with owning and running a vehicle. Therefore, business owners need to be sure they’re comfortable with this extra work, before making the jump.

As we have established, company vehicles offer unique benefits but these can come with some potential drawbacks. It’s only by weighing up the relevant pros and cons that businesses can make an informed decision that is right for them.

Whether it’s choosing to have a company vehicle or more standard tasks such as payroll, running a business can be difficult. Fortunately, the team at Salhan Accountants offer expert consultancy services, aimed at any business owners looking for help.