How to choose the appropriate vehicle
Once the financing method and the introduction of the TCO methodology a Company can select the vehicle choice list that best meets the needs and expectations of the business.
Companies generally define the need for a vehicle allocation into four key areas:
Business needs (AKA ‘essential users’). Such vehicles are provided where the duties and responsibilities of the employee’s job make it necessary for a car or van to be provided. It is this factor alone that defines eligibility to the vehicle.
Perk Cars (AKA ‘status cars’). This defines a car that may be provided as a standard benefit of employment to employees on a particular grade or salary level. The choice of vehicles is normally influenced by market practice.
Market Related. In some cases companies may need to provide cars to staff that don’t qualify under either of the above. This is normally because their competitors are offering cars to equivalent staff and there is a need to remain competitive.
Pool Cars. Often kept to satisfy ad-hoc business use for staff that do not have access to a company car.
After a company has identified a need to provide vehicles, it should define the conditions under which it will make the vehicles available to staff. These conditions should ensure that:
The objective(s) behind the introduction of vehicles is supported
Operating and financial risk is kept within acceptable limits
There is a consistent application of conditions across the Company
Misunderstandings and disputes are less likely and more easily resolved
Drivers are fully aware of the terms under which they are accepting the vehicle, including their responsibilities.
The allocation and use of vehicles should be sensitive to the company’s original aim in introducing vehicles. For example a company that needs to provide vehicles solely for business use may decide to limit choice and disallow the fitting of optional extras. However a company whose main objective is to enhance the benefits package by offering a car may see value in a wider choice list; allowing staff to trade up or down and greater flexibility around the fitting of extras.