What is a fleet vehicle?
Fleet vehicles are groups of motor vehicles comprising all transport vehicles owned by the company, government or agency or other business. Sometimes, the vehicles are leased to transport companies for the movement of goods to customers. The vehicles are also leased to get company employees to their client’s locations.
A fleet vehicle is any motorised asset by a company to transport people and products conduct business or assist with daily activity. A fleet vehicle can range from a group of service vans, rental cars, and taxicabs to a group of bulldozers and tractors. Broadly speaking, fleet vehicles are cars, trucks, or other automobiles owned by a business or organization for official use. Sometimes fleets are used in delivery services, or they can be assigned to employees in sales or other occupations that require a lot of travel throughout the day.
The pros of having fleet vehicles
A well-maintained fleet vehicle can be critical for business. Companies can rely on it to make deliveries or complete jobs on time without having to worry about public transport strikes or delays. The company can even handle the queries from customers with personal contact with the customers.
Any fleet vehicle can be branded. Driving a corporate fleet vehicle can increase business visibility. It will help to gain more exposure of the brand on the road making the customers more likely to trust the brand by advertising on the side of the vehicles.
Some employees usually think that the corporate fleet vehicle is a perk. Employees log expense mileage if they use personal cars when they finish their drives that are reimbursed. Fleet vehicles usually reduce the employee log work, The business pays for the gas and tracks mileage and the employee doesn’t have to worry about depreciation.
The cons of having fleet vehicles
Corporate fleet vehicles will make the business liable if something happens to the employee while he or she is driving a corporate fleet vehicle. Insurance can protect the business against legal action. The insurance cost is an additional liability. The corporate fleet vehicles are also high maintenance and depreciate over time. Your fleet vehicle will be on road often so frequent tune-ups or repairs are required. Additionally, maintenance has its limitations even if you take good care of the car, it will lose its value.
A fleet vehicle is an investment. Your business must have a solid cash flow to add it. The initial cost of buying the vehicles is high. You will take a loss if you sell fleet vehicles in the future.
Even if you own a single fleet vehicle, your administrative workload will increase, and you will need to manage the maintenance, insurance, and tax filings. You may need additional staff or time to manage this and if you own a small business the vehicle may be underutilised with infrequent deliveries to make.
Businesses that make use of fleet vehicles
In general, any small or large business can own a fleet vehicle. Industries that commonly use fleet vehicles include catering, delivery and transportation, home services, construction, hospitals, equipment dealers, pharmaceuticals, and public services.
Does your business need to keep track of personal and business mileage? Try out Driversnote for automatic tracking of mileage.
What we do
Here, you'll find a collection of articles that will help you to navigate the rules for everything from reimbursing employees for their..
Learn how the IRS taxes car allowances and how to keep car allowances for your employees tax-free with this simple guide.
For the self-employed, every tax deduction counts. Check out some of the top self-employed tax deductions to reduce what you owe the IRS and how you can claim them.