In 2014, average monthly personal use charges increased to $123. Fleet managers were working to reevaluate personal-use policies, programs, and charges and educate their drivers on the importance of accurate reporting.
The recent drop in fuel prices has been as breathtaking as earlier run-up in prices. If sustained, these reduced fuel prices will begin to make a dent in overall fleet fuel expenditures.
If an employee threw trash all over the office floor, scratched the paint off the walls, broke the light bulbs, left holes and dents in the walls, and skipped routine maintenance on the copier until it overheated and broke, no manager would tolerate this abuse. Yet, that is exactly what some fleet managers do tolerate when drivers abuse their company-provided vehicles.
Last August, the IRS announced areas it will prioritize for audits in 2014, one of which is fringe benefits, especially the personal use of company vehicles. Managing personal-use compliance is a headache. It is also expensive, with internal costs ranging from $35 to $75 per year per vehicle. Here's what you need to do to be prepared should your friendly IRS agent come knocking on your front door.
If you asked fleet managers what the industry average is for personal use of company vehicles, most would say it is approximately 15-18 percent. But, is it? Most of us will agree that some drivers fudge their personal-use mileage, but no one knows by how much. There is a growing suspicion that personal-use mileage is far greater — perhaps substantially greater — than what the industry accepts as conventional wisdom.
TORRANCE, CA – Automotive Fleet needs your input! How does your company handle personal use of company-provided vehicles?
TORRANCE, CA - Automotive Fleet needs your input! How does your company handle personal use of company-provided vehicles?
Do you really know who is driving your company-provided vehicles? Often the "at-work" persona of an employee is not the true indicator of their behavior when no one is watching. Recently, someone forwarded me a link to a chat room for pharmaceutical reps. I did a search of posts that included the phrase "company car" and, in short order, I was shocked at some of the comments written about their use of company cars and how drivers play "the system" to their advantage.
Personal use administration is a headache for most fleet managers. Oftentimes, this headache is self-induced and avoidable. Here are five common mistakes committed by fleets in administrating a personal use program.
Many companies are wondering whether they are charging enough for personal use. At some companies, this discussion is long overdue. When re-evaluating personal use charges, a common mistake is to focus solely on the cost of fuel. However, doing so ignores the other “hidden” costs of personal use, which have also risen.