Managing the Financial Side of Commercial Fleets

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7 Reasons Why Vehicle Condition Should Not be Part of an Employee's Annual Job Review

June 18, 2016, by Mike Antich - Also by this author

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 wallboard, and skipped routine maintenance on the copier until it overheated and broke, no manager would tolerate this abuse. Yet, that is exactly what some companies tolerate when drivers abuse their company-provided vehicles. Not only does this abuse involve dollars-and-cents issues, but it can also result in life-and-death consequences and subsequent corporate liability exposure.

The resale value of a used vehicle is determined by three factors: the unit’s age, overall mileage, and vehicle condition. A used company vehicle in poor condition, because of driver abuse, will result in lost resale value or incur unnecessary reconditioning expense at auction. Just as egregious as vehicle abuse is vehicle neglect, such as not changing the motor oil, which results in engine damage. Another aspect of vehicle abuse occurs with drivers who smoke. Most companies have no-smoking policies while driving company vehicles; however, some furtive smokers are notorious about ignoring this prohibition. When taken to auction, a smoker’s car, on average, results in a deduct of several hundred dollars on resale, because of the pervasive tobacco odor and the invariable cigarette-burned upholstery.

Confronting the Problem of Vehicle Abuse

Some advocate resolving vehicle abuse by making the condition of a company-provided vehicle part of an employee's annual job review. At first blush, this may seem like a good approach to address this problem, but, as they say, the devil is in the details.

Inconsistency in Vehicle Evaluations: If vehicles are transferred to other drivers, it’s hard to pinpoint who failed to maintain the vehicle. Another issue is consistency in vehicle evaluations between reviewers. Some will be knowledgeable, looking at the vehicle carefully, while others looking at the very same vehicle will simply say it is normal wear-and-tear.

Irregular Issuance of Condition Reports: Managers may not issue vehicle condition reports on a regular basis and not be consistent in vehicle evaluations for all employees.

Possible Violation of a State Law: Some state labor laws prohibit payroll deductions to pay for vehicle damage, especially if you do not apply the same rule to all employees. As with all disciplinary action, you need to be prepared to impose it for everyone from the CEO on down.

Employee Circumvention of Policy: Employees will attempt to circumvent accident reporting procedures and obtain out-of-network repairs to avoid having it appear in an employment review.

Managers Dislike Performing Inspections: The lack of management buy-in can make the process an administrative nightmare. Also, many employees are field workers who may live hundreds of miles from the office locations and their managers. These drivers would have to drive their vehicles in for inspection.

The Fleet Manager becomes a Referee: Invariably, there will be administrative involvement by the fleet department in resolving disputes between employees and managers over vehicle condition.

Management Abuse: Some managers could possibly use this system as a convenient tool to terminate unwanted employees.

What Constitutes Normal Wear-and-Tear?

Asking drivers to take better care of their vehicles is usually sufficient for the overwhelming majority of drivers. However, there are other employees who simply pay lip service to the policy, especially when they know that there are no consequences from doing otherwise. Also, some managers are reluctant to penalize abusive drivers, especially executives or top sales performers.

Often, vehicle abuse policies are inadequately communicated by supervisors to new-hires or employees assigned a company vehicle for the first time. Plus, there is a great amount of gray area in distinguishing between borderline normal wear-and-tear and abuse. All of us recognize blatant abuse, but is a torn seat or scrapped bumper abuse or normal wear-and-tear?

It is a proven fact that fleets with clearly articulated policies to employees about vehicle upkeep and misuse receive a better quality product to take to auction. Most companies have prohibitions about vehicle misuse in their written fleet policies. The problem is that the majority of companies do not enforce these policies, except in the most egregious circumstances.

While charging the driver responsible for vehicle damage may be illegal in some states, some fleet policies circumvent this issue, by assessing financial liability instead to the operating department. Another penalty to curb vehicle abuse is to restrict personal-use driving privileges of the company-provided vehicle.

There are different and creative ways to address vehicle abuse, but it is sound advice to steer clear of proposing to management that vehicle condition become part of an employee’s review.

Let me know what you think.

[email protected]


  1. 1. Mario Moses [ June 20, 2016 @ 04:50PM ]


    Good article with multiple perspectives gives some additional food for thought to approaches. I agree consistency is critical regardless of title, performace,etc...

  2. 2. Michael Galorath [ June 23, 2016 @ 11:47AM ]

    Let's not even figure that a vehicle will end up on the used car lot. Lets look at it from the maintenance team. Drivers slip seat no assignment and no accountability. Driver write up an issue and now we find chicken bones coughs in heater ducts, along with pens. I had one tech address an issue that required the replacement of the TPS and when he was done I had a workman's comp claim because bugs had infested the floor mat sound deadening material and the bug attached my tech. Because drivers just like a child being given a car they do not take care of it. We don't make it a item that is reviewed during the pre-employment process so both drivers and unions don't take it seriously. This is not to mention the BIO Hazards that are left by drivers who refuse to find a rest room.

  3. 3. Tim C King [ July 07, 2016 @ 01:06PM ]

    Mike, this argument sounds a lot like arguing against employee performance appraisals ... much of the points are similar and make the same sense (NOT).

    That being said, I agree with what you are saying - that condition reports in the performance appraisal process may not be the most effective means to manage this resource. There's actually a lot more effective motivator to ensure managers stay-on-top of vehicle abuse or neglect. Assuming they are held accountable for their budget performance, effective charge-back pricing (based on actual vehicle costs) are very effective in managing equipment condition.

    For employees that experience higher equipment costs (regardless of reason), they need to be held accountable. Just like they are for other expense components. There's no magic to this.

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Author Bio

Mike Antich

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Editor and Associate Publisher

Mike Antich has covered fleet management and remarketing for more than 20 years and was inducted in the Fleet Hall of Fame in 2010.

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