July 29, 2024
Sara Davies
Receiving a company car for the first time can feel daunting and exciting in equal measures. This article details 5 checks you’ll want to make, to ensure the process runs as smoothly as possible.
1.The Costs of Your Company Car
Understanding what is and isn’t included in your agreement is really important to avoid any misunderstandings or potential budgeting errors.
In particular you’ll want to check:
Company Car Insurance
Who is responsible for this, you or your employer? More often than not it will be your employer who pays for this but it’s worth checking just in case.
Company Car Maintenance
Maintenance is usually undertaken by the employer, though employees are often required to make their own vehicle maintenance checks.
Company Car Tax
Company car tax, also known as a Benefit in Kind (BIK) tax, is the tax that any driver will pay on a vehicle that is provided for them to use by their employer. It will only be applied if the vehicle is used for personal travel, which is also known as private use.
Company car tax is based on three main factors:
- The P11D of the vehicle
- The CO2 emissions of the vehicle
- Your personal tax rate
Find out more about company car tax in our dedicated guide.
Company Car Fuel Costs
Fuel cards are often given to employees so it’s worth checking if you are being given access to one of these. They are cards much like credit or debit cards, restricted to car fuel (and sometimes related travel) purchases, to pay for fuel used for business purposes. Not all fuel stations accept all fuel cards, so its worth checking there are appropriate stations near you and with your workplace any restrictions on how you use the card which may affect you.
Unless you are using a pool car then you will find that you will usually end up using the fuel card for personal journeys as well, since it is difficult to separate them in a fuel tank, however this has tax implications. Just like you need to pay benefit in kind (BIK) tax for the use of a company car for personal travel, you will need to pay for fuel that is available for personal journeys.
As it’s almost impossible to separate the fuel purchased by the business and fuel you’ve purchased yourself for personal journeys, some companies choose to allow their drivers to use the company fuel card for any refuelling of a company vehicle and then they and the driver pay tax on the fuel used for personal trips. Read our detailed guide here to understand the calculations and cost implications.
2. It’s Set Up with Payroll
We recommend confirming with your HR or payroll team the cost of the vehicle to you and that any deductions or changes to your take home pay have been put in place from your confirmed car delivery day. It is worth getting insight into how your company car tax is paid. More often than not, it is deducted monthly from your pay to spread the cost throughout the year. Company fuel tax is usually deducted in the same way.
Note that if you are receiving a company car through a salary sacrifice scheme, then unlike a company car, you’ll pay for the monthly lease using your pre-tax salary. Read more about salary sacrifice schemes here.
3.The Condition Upon Delivery
When your vehicle is delivered, you will receive handover documents to complete. Prior to signing these, it is wise to thoroughly check the condition and functionality of the vehicle, as well as checking that the specifications match those on your paperwork, including mileage.
If you choose to accept a damaged vehicle, make sure any damage is noted on the delivery paperwork and that you’ve taken pictures as a record because once you sign for the vehicle the dealership can no longer accept any liability for damage. In the unlikely event that a company car we have delivered to you is damaged and you want to refuse the delivery, call us on 01722 322 888 (if we are your provider) and our customer service team will explain your options further.
Exterior checklist:
- Check the lights are in full working order
- Check paintwork for dents, scratches or chips
- Check all glass including windscreens and wing mirrors for any cracks or stone chips
- Check wheels including the tyres for cracks or bulges, and alloys too
Interior checklist:
- Ensure no warning lights are on
- Check electronic windows and features like handsfree tailgates are operational
- Check seats, upholstery, dash and panelling for any scuffs, stains or tears
- Check software is working and infotainment system is set up
4. The Functionality of Your Vehicle
Check how the vehicle controls work before you drive away! This can include checking features like how the stop-start engine is engaged, how you turn the lights on and convenience features like the air conditioning. The delivery driver should have a basic understanding of these controls and be able to show you how to operate the vehicle if it is different to your previous car. You might want to read the vehicle manual or watch video reviews of the model on YouTube beforehand.
5. Your Responsibilities as a Company Car Driver
Find out from your HR department or fleet manager, any restrictions that you my need to abide by as a company car driver within your organisation.
These may include:
Performing VMCs
Employees are often required to make their own vehicle maintenance checks and alert their employer of any issues found. Vehicle maintenance checks are checks carried out by drivers at regular intervals to report on the vehicle’s condition.
The specific checks that drivers need to complete vary between businesses however there are some that are standard across all businesses, including, among many others, tyre tread, tyre pressure, radiator coolant, oil level, bodywork and light functionality.
Ensure you have details of who to contact on hand, in the event that you need to report a problem with your vehicle. See our VMC guide for more information.
Driver Restrictions
Find out from your HR department (or fleet manager if your workplace has one), if there are any business restrictions on the use of the car, such as annual mileage.
Car Condition Upon Return
It is worth having an awareness throughout the duration of the lease what the fair wear and tear guidelines are for your vehicle. These are used to describe acceptable wear and damage that occurs during regular vehicle use. Find out more in our dedicated guide.
Enjoyed this article? Read more of our latest blogs below:
- How Fleet Driver Training Saves Money
- 8 Things To Know About Car Sharing
- Driving Fines in a Company Car
- What Can I Use My Company Car For?
For all our latest news and blogs click HERE.
Or are you looking to understand the company car, fleet management or any other aspect of fleet vehicles? If so, then check out our Guide Pages.