XYZ Engineering Ltd. Company Car Policy. A Webcars Publication

Transcription

1 XYZ Engineering Ltd Company Car Policy A Webcars Publication

2 Company Car Policy for XYZ Engineering Ltd Assumptions: XYZ have already looked at the existing costs and decided that to keep within budget, the most suitable method of funding is Full Maintenance Contract Hire. There are 15 Drivers There are 5 Levels These are divided either by 1. Salary 2. Position in the company ie Grade 3. Essential or Non Essential (Perk) Users Group/Level A = 3 Directors Group/Level B = 3 Senior Management Group/Level C = 3 Sales Staff Group/Level D = 3 Maintenance Engineers Group/Level E = 3 Perk Cars Benchmark cars are : A: BMW 530D Sport Auto B: BMW 320D SE C: Ford Mondeo 2.0TDCi Zetec D: Ford Focus 2.0TDCi Estate E: Mini 1.6 Cooper Method of Funding: Contract Hire for all cars Parameters: 3 Years, miles per annum, full maintenance, 3 rentals in advance followed by 33.

3 Construct Table: *Benchmark Rental No of Drivers Group A 700 per month 3 Car list** At the discretion of the Company Group B 500 per month 3 BMW, Audi, VW, Honda Group C 350 per month 3 Group D 325 per month 3 Group E 325 per month 3 Ford, Vauxhall, Honda, Toyota Ford, Vauxhall, Honda, Toyota At the discretion of the Company *This benchmark rental is based on an allowance of miles per annum to give a rental for the benchmark vehicle in each group. This allowance is based upon the average annual mileage of all the drivers in each group or level. The actual contract rental for each driver is based upon his/her individual intended mileage. This allows all of the drivers in each group to have the same level of vehicle despite the mileage they have to drive. eg. Director 1 in Group A drives a BMW 530D Sport Auto at 30,000 miles per annum which costs 725 per month Director 2 in Group A drives a BMW 530D Sport Auto at 25,000 miles per annum which costs 700 per month Director 3 in Group A drives a BMW 530D Sport Auto at 20,000 miles per annum which costs 675 per month Average rental in Group A stays at 700 per month and keeps within the budget set. From the table we can work out the total budgeted contract hire costs for the fleet per month. As in this case, the costs also include all repairs and maintenance, we need only to factor in expected fuel and insurance costs to give us a good idea of the total fleet costs for each month. Instead of a rental, we could use car list price as a benchmark. However, the main drawbacks of this method are the availability of large discounts, special support, special offers etc, etc. The price paid bears little relation to the published list price. Also, with funding methods relying on a residual value at the end of the agreement, there can be large discrepancies between list price and rental depending on the manufacturer. **Car List: This is subjective to say the least. At one extreme there are businesses which specify exactly the make, model and specification of each car without any variance whatsoever. At the other end there is the free for all, user chooser option where the driver can pick almost any vehicle as long as it is within budget.

4 In our example, we have taken a middle road, favoured by the many. Most drivers can choose from a list of selected manufacturers only, within the constraints of non allowable cars and allowable extras. Allowable Extras: Metallic paint, Sat Nav, Bluetooth. Controlling extras removes the absurd situation seen on some occasions, where because of a price reduction by way of special offers, the driver adds as many extras as he can to reach the maximum budget rental for his group. (We have seen as many as twenty five extras!) Non Allowable Cars: e.g Petrol cars, convertibles, 4x4s, MPVs in groups B,C and D. Groups A and E at the discretion of the Company. Never underestimate the importance of this category. Get it wrong and a 30 years old single man is driving around in a 7 seat people carrier for the next two years as a result of someone leaving the company or someone being promoted and handing their car over to him. It is never good for staff morale. In our example, to keep down costs, the company insists on the new generation of frugal common rail diesel engines in the cars in groups B,C and D. The drivers in these groups, as essential users, will be doing the higher mileages. Suppliers: In this instance we have decided to use LVC Central Ltd to be our supplier, providing us with 3 competitive quotes from 3 leading funders. Implementing a Strategy for Administering Risk To complete our car policy, we now need a strategy for risk management. Use this handy checklist: Recruitment If an individual is joining the company and driving is part of the job specification or a perk company car is in the package, then it is crucial to check the following: He/she has a current driving licence. Driving history - date of test, any previous convictions, accident history, types of vehicles driven and under what circumstances. Ask a general question of the prospective employee requesting that any information be provided that may influence the individual's ability to drive on company business. Consider objective assessment, driving tests, medical and eyesight tests.

5 Terms and Conditions of the Contract of Employment - points emphasising driving on company business Obtain a declaration from the driver of his/her intent to maintain any vehicle provided, in a safe, roadworthy condition. State groups and types of vehicles that can be driven, ensuring the conditions provide a clause that allows the employer to refuse permission if the proposed vehicles do not meet criteria acceptable to the company. Stipulate all legal requirements - driving licence, insurance, mechanical condition, MOTs, anyone else who may drive etc. Cross-reference the terms and conditions and ensure they are consistent with the company handbook which will contain the company policy. Refer the driver to the fact that the company policy will be reviewed on a regular basis and that the terms and conditions refer to the current published car policy. Handing over a vehicle The driver must sign a handover document specifying the time and date he has taken responsibility for the vehicle. The process should ensure complete familiarisation with the vehicle controls and procedures. The driver handbook should be referred to and the driver should sign that he has read and understood its content. His/her original driving licence is to be checked and a copy kept on file. The driver must be made aware regular checks will be implemented and that there is an obligation to notify the company of any material change with regard to the licence by way of speeding offences, penalties etc. If not undertaken prior to recruitment, an assessment of the driver's competence to drive should be carried out and, if necessary, this should include an eye and medical examination. His/her work should not commence until any remedial action has been completed. A complete explanation should be given to the driver of all of the support services available such as breakdown cover, tyre, glass, vehicle hire, out of hours contacts etc. The Driver's specific responsibility There are four areas which should be brought to the driver s attention: The driver must be made aware that he has a legal responsibility to keep the vehicle in a roadworthy and safe condition, to drive it in a safe manner and in accordance with the road traffic regulations. The driver must have a current driving licence when driving a company vehicle on company business.

6 The vehicle must have current road fund licence, MOT and appropriate insurance to cover business use, when driven on company business. It is the driver s responsibility to make sure this is the case. It should be brought to the driver s attention that in the eyes of the law, ignorance of legal requirements is not a defence. Maintenance requirements As part of the company driver handbook, drivers should be made aware of their responsibility to undertake regular maintenance. This includes daily checks on items such as lights, windscreen washers and tyres. The policy must be used to ensure that areas such as changing of wheels, wiper blades and other safety-related and/or legal requirements are met. The same applies to ancillary equipment such as fire extinguishers and mobile telephones. Drivers must be made aware that it is their own legal responsibility to check all maintenance requirements and to request attention when appropriate. Use of a management company does not negate the driver's responsibility. Driving standards The driver has a responsibility to advise his/her employer in the event of any material changes regarding the driving licence as well as health or disability. The company should, as part of its routine assessment of the driver, request a declaration covering all aspects where changes in the driver's circumstances should be notified. It is important drivers are made aware that, in the event of an accident, it is likely that the police will enquire about the purpose of the journey, time of last break from driving, vehicle condition, service history and will also seek to establish whether a mobile telephone has been used or other in-car distractions such as CD or tape which may have contributed to an accident. Company car policy The company car policy must be a moving document that reflects the changes affecting employer and employee. Drivers must be notified separately and the company must again obtain from the driver a signed response that the changes then introduced are understood. Particular attention in the policy should be made to what types of vehicle can be used on company business and, more importantly, who is able to drive the vehicle, particularly if the vehicle is owned by the company.

7 Create the Company Car Handbook The example XYZ Engineering Ltd Company Car Handbook can be found in the Webcars Dispatch Box. Summary It follows that only if the driver is involved in all aspects of vehicle operations will the implementation strategy be successful. The procedures must be clearly set out and the driver must be an integral part in ensuring that they are complied with. Existing legislation is sufficient for possible prosecution of the company and directors and, as a consequence, employers cannot afford to take any risks. We have a collective responsibility to our employees, our shareholders, ourselves, managers and directors and the public to adopt a positive attitude to occupational road risk. To request a FREE copy of this car policy in an editable word format for you to personalise, contact us Or if you would prefer practical help with the development of your own company car policy simply contact us to arrange an appointment with no obligation tel: carpolicy@webcars.co.uk A Webcars Publication