For a long time, it has been pretty much a given that the properly licensed spouse of a driver assigned a company vehicle would be permitted to drive it as well. Personal use, including that by family members, has been a coveted perk of holding a job that includes a company vehicle.
But, is permitting personal use by a spouse, or any family member, really a good idea? As fleet budgets have been squeezed and resources become tight, many companies are revisiting personal use in general and that of nonemployee family members in particular.
Why Personal Use?
The discussion can begin by asking why allow personal use at all? The answer is simple; when recruiting, especially young candidates, permitting a spouse to drive the company-provided car is a great benefit. For many, it is the only car in the family. This particular perk is generally a plus when a company is competing for top talent.
Personal use policy can take a number of forms:
■ Spouse only.
■ Any immediate family member.
■ Any immediate family member over a particular age (25 is common).
■ Any licensed driver over a particular age.
Personal use can be limited, i.e., weekends only, no out-of-state driving, for example. It can be "discouraged," by not reimbursing for fuel or maintenance/repairs purchased on weekends or via personal use charges. However the company policy is established, personal use is one of the most common perks provided to those assigned a company vehicle.
Of course, allowing personal use (spouse and/or others) requires the company take the same precautions with nonemployees as it does with drivers. First and foremost, these precautions include obtaining and reviewing the spouse's motor vehicle record (MVR). The same limitations drivers are held to regarding violations must be applied to spouses, and the same consequences for those violations must be applied as well.
When hiring a new employee whose job includes spousal personal use privileges for a company vehicle, the spouse's MVR should be obtained and reviewed. If the spouse's record contains violations, the consequences as outlined in the policy should be applied. In addition, the policy can easily and rightfully limit or suspend spousal use privileges until the violation "expires" or no longer appears on the record.
Does the Company Benefit?
There are, of course, the aforementioned benefits to providing spousal (and other) driving benefits in a company car program. Younger candidates sometimes don't own a personal car. When spouses are permitted driving privileges, the pool of candidates overall widens. In addition, allowing spousal driving privileges can be a competitive advantage in attracting top-notch talent.
As long as company fleet policy properly mitigates the risk, offering spousal personal use privileges dovetails well with an overall company vehicle program. In some circumstances, spousal use can add to the program's efficiency. For example, consider the driver who travels occasionally by air. If the vehicle requires servicing, rather than waiting for the employee to return, a spouse or other family member is permitted to take the vehicle in for service, thus reducing driver downtime.
However, the issue of spousal personal use must be reviewed from the overall perspective of vehicle cost. Keep one important thing in mind: every mile a company vehicle is driven costs money, and a car or truck doesn't differentiate between personal miles and business miles. The impact of personal use in general, and nonemployee use in specific, can be substantial.[PAGEBREAK]
Running the Numbers
Most fleet managers know the costs to the company for every mile a company vehicle is driven. The cost/use ratio of cents per mile is nearly a universal standard. Let's assume a fleet has 500 vehicles, each driven an average of 24,000 miles annually, and the fixed and variable costs total 45 cents per mile driven.
Extending these numbers, the fleet runs 12 million miles each year, at a total cost of $5.4 million. Personal use is permitted by both the driver and his or her spouse. It is reasonable to assume that approximately 20 percent of total mileage is personal. Based upon the average cited in the 500-vehicle fleet example, the annual cost of personal use is $1.08 million. To recoup personal use costs, the company would have to charge drivers $180 per month ($1.08 million / 12 / 500), not an overly burdensome number.
But what portion of the logged personal use is charged to a spouse or other nonemployee? If just 10 percent of total personal use is spousal/nonemployee, $108,000 of vehicle expense can be saved if only the driver is permitted such use.
The key point, though, is not the expense. Personal use charges can recoup the expense without great pain. Other factors in allowing spousal privileges must be considered as well:
■ Additional mileage driven by spouses and other nonemployees runs up additional wear and tear, and if extreme, can accelerate replacement with more expensive, new models.
■ Additional risk arises, encompassing not only physical damage, but liability as well. Additional vehicle expense can be pocket change compared to the risk of legal liability for third-party injury or death. The more miles driven, the greater the risk.
■ Still another risk is that others besides the spouse may drive the vehicle. Once the vehicle keys leave the house, any number of people, from children to friends, can end up driving, further increasing risk.
It Works, If Managed
All in all, allowing a spouse to drive a company vehicle can be a net advantage to the company, provided costs are tracked and recovered, and risk is managed.
■ Spousal use privileges expand the labor pool. Companies can attract more potential talent if spouses are permitted personal use, particularly among younger workers.
■ Allowing spouses to drive company vehicles can actually reduce downtime. In the employee's absence, a spouse can arrange for preventive maintenance and repairs.
■ The risks, some substantial, spouses and other nonemployee drivers pose can be mitigated by including them in the same safety and MVR policies as employees. MVRs should be reviewed upon employee hire and according to the same schedule as the employee. Further, the same penalties and consequences for violations must be applied.
■ A personal use charge, if not calculated on a mileage basis, should factor in nonemployee driving, so costs can be recovered. ■