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Private use of a company vehicle is using it for personal activities outside of business hours. While this can be a benefit for employees; for businesses, it raises concerns about insurance and tax liability, vehicle wear and tear, and fuel costs. Monitoring ‘out of hours’ (OOH) company vehicle use helps your business to record expenses accurately and prevent company vehicle misuse.
One key concern is the insurance coverage for company vehicles involved in an accident outside of working hours, especially when vehicles are being used contrary to company policies. In many cases, if a company vehicle is used for personal purposes after hours and is involved in an accident, your company’s insurance policy may not cover the costs, leaving your business exposed to significant financial risk.
Without proper monitoring, private use of company vehicles can lead to significant financial loss over time. Fuel expenses, maintenance costs, and potential legal liabilities can escalate if vehicles are not used in accordance with your company policy. Unregulated private vehicle use may also result in accelerated vehicle depreciation, reducing the resale value of your fleet.
Monitoring vehicle use is crucial to protect your company assets and reduce business risk – this guide explains how you can implement an effective solution.
The Importance of Out of Hours Vehicle Monitoring
Here’s why you should monitor the use of company vehicles after hours:
- Cost Management: Keeping track of private mileage helps manage fuel costs and maintenance expenses. It allows businesses to identify excessive or unauthorised use that may contribute to increased operational costs.
- Liability Concerns: Understanding how vehicles are used reduces liability risks in case of accidents. Monitoring helps ensure vehicles are driven safely and in compliance with legal regulations before it’s too late.
- Resource Allocation: Ensuring vehicles are available for business needs when required. Monitoring vehicle use helps with scheduling, ensuring vehicles are not used for private activities when they are needed for work.
Implement a Vehicle Tracking System
Vehicle tracking systems have become indispensable for companies wanting to monitor their fleet’s usage. These systems use advanced GPS technology to provide real-time tracking of vehicle locations, movements, and usage patterns.
Let’s look at how a fleet tracking system can help you track OOH company vehicle use.
Benefits of Tracking Company Vehicles
- Real-Time Monitoring: Track vehicle location and usage in real-time. Immediate alerts notify managers of unauthorised use or deviations from the approved schedule.
- Improved Accountability: Knowing that vehicle use is monitored encourages employees to adhere to company policies. This fosters a culture of responsibility and transparency.
- Enhanced Security: Precise location data aids in recovering stolen vehicles, providing both security and peace of mind to employers and employees alike.
- Better Customer Service: Vehicle tracking systems improve customer service by enabling more accurate delivery times and route planning, ensuring business operations continue smoothly.
Driver Identification
Vehicle tracking systems with Driver ID allow businesses to register and track who is driving a shared company vehicle by using magnetic key fobs or RFID tags. This improves accountability and ensures greater security. Using the vehicle without proper identification will cause a buzzing sound until the reader detects a key fob.
How Vehicle Tracking Helps Monitor OOH Usage
Vehicle tracking systems generate detailed reports on routes, distances travelled, and time spent at each location. Here are some other features to help you monitor when your company vehicles are used outside of business hours.
Out of Hours Vehicle Use Reports
Many vehicle tracking systems offer a ‘out of hours’ report, that lists all trips that occurred outside of defined business hours. You can use this list to follow up with staff members who are using company vehicles outside of your agreed times.
Then, filter this report to only show significant vehicle use – for example, trips over 1 mile. This excludes anyone simply moving a vehicle parked at their home address overnight.
Business vs Personal Mileage
In addition to real-time tracking, features like trip reports allow you to see an accurate account of vehicle use and distinguish between business and private mileage, making it easier to track accurate fuel and maintenance costs.
Employees can also access their tracking reports with a vehicle tracking mobile app and manually flag their personal trips for reporting purposes.
Geofencing Alerts
Features such as geofencing alerts can notify you when a vehicle enters or exits a predefined area. These are useful for ensuring vehicles stay within designated zones after business hours.
Geofencing alerts can notify managers immediately if a vehicle deviates from an authorised route or schedule.
Choosing the Right Vehicle Tracking System
When selecting a vehicle tracking system, consider:
- Ease of Use: The system should be user-friendly and easy to integrate with existing operations. It should offer intuitive interfaces that require minimal training for users.
- Comprehensive Reporting: Look for systems that provide detailed reports and analytics. These insights can help in making informed decisions regarding fleet management and operational strategies.
- Scalability: Ensure the system can grow with your business needs. As your fleet expands, the tracking system should be able to accommodate additional vehicles and increased data volumes.
- Cost-Effectiveness: Evaluate both initial costs and ongoing subscription fees or maintenance charges. It’s also important to evaluate the level of customer support and technical assistance the company provides, ensuring that any issues can be resolved promptly.
See our guide to understanding vehicle tracking contracts.
Best Practices for Monitoring Company OOH Vehicle Use
Tracking private mileage in company vehicles is crucial for ensuring accurate expense reporting and compliance with tax regulations. Here are some strategies to consider:
1. Establish Clear Policies
Clearly defined policies regarding the private use of company vehicles are essential. These policies should outline the acceptable use, restrictions, and consequences of misuse. Regularly communicate these policies to your employees and ensure they understand the expectations.
In addition to written policies, consider conducting regular training sessions to reinforce these guidelines and address any questions or concerns employees might have. By involving employees in the policy-making process, businesses can gain valuable insights and foster a sense of ownership and responsibility among staff members.
2. Maintain Accurate Records
Keeping detailed records of vehicle use can help you identify patterns and address any misuse. Use trip reports to ensure compliance with company policies.
Accurate records are also invaluable during audits or disputes, providing concrete evidence of vehicle usage and adherence to company policies. Regularly review these records to identify areas for improvement so that you can implement corrective measures promptly.
3. Regularly Review and Update Your Policies
As business needs and staff agreements change, so too should your vehicle use policies. Regularly reviewing and updating these policies ensures they remain relevant and effective.
Incorporate feedback from employees and stakeholders when updating policies to ensure they are practical and achievable. Additionally, stay informed about changes in legal regulations or industry standards that might impact vehicle use and adjust policies accordingly.
4. Educate Your Employees
Training sessions and workshops can be valuable in educating employees about the importance of responsible company vehicle use. By fostering a culture of accountability, your business can minimise the risk of vehicle misuse.
Emphasise the financial, legal, and operational implications and encourage open communication and feedback.
5. Use Mileage Tracking Tools
Use digital tools or apps specifically designed for tracking mileage. These tools can automatically differentiate between business and private miles using predefined business hours. They provide a convenient and accurate way to record and categorise journeys, reducing the risk of errors or omissions.
6. Regularly Audit Mileage
Conduct regular audits of mileage reports to ensure accuracy and compliance. Audits help identify discrepancies or patterns of misuse, enabling swift corrective action.
7. Incentivise Responsible Vehicle Use
Consider offering incentives for employees who consistently adhere to company policies regarding vehicle use, including driver behaviour and speed. This could include recognition programs, bonuses, or other rewards that encourage responsible behaviour.
8. Build Employee Trust
Be transparent about how your business uses mileage data and ensure it aligns with privacy regulations. This helps build trust with employees and reassures them that data is collected and utilised fairly.
Legal and Tax Considerations
Familiarise yourself with the taxation of private mileage. Staying informed about tax policies and legal regulations helps businesses optimise vehicle use while mitigating risks. Ensuring that all documentation and reporting related to vehicle use and mileage is accurate and comprehensive can safeguard the business during audits or legal inquiries.
Insurance Considerations
In addition to managing fuel costs, maintenance, and liability, companies must also consider the impact of insurance cover on vehicles used outside of working hours. If a company vehicle is involved in an accident during personal use, especially when not permitted by the company’s policy, it can create serious issues for both the employee and the business.
Check Your Vehicle Insurance
Many insurance policies for company vehicles cover vehicles during business hours or while engaged in authorised activities. However, private use of the vehicle outside of business hours – especially when prohibited by company policy – may void coverage or lead to partial compensation, leaving the company responsible for repairs, legal costs, or other damages.
In some cases, the employee’s personal insurance may need to cover the incident, and it could lead to complications with claims, potential penalties, or even higher premiums for the business. This is why it’s essential for businesses to have clear policies on private use of vehicles and to actively monitor their usage.
Addressing Private Use of Company Vehicles
Monitoring and addressing out-of-hours use of company vehicles is essential for managing costs, reducing liability, and ensuring responsible use.
Whether you’re a small business owner or managing a large fleet, adopting these practices will help you control company vehicle use and ensure your resources are used effectively.
Implementing clear policies and regularly reviewing your vehicle use data will ensure smooth, efficient, and compliant operations.
For more tips on managing private use of company vehicles, listen to our Fleet Insider podcast episode with Paul Mullins, Transport Manager at FullFibre.
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