Company Car vs. Car Allowance? Here's the Clear Answer
Blog Category: Manage My Fleet


Deciding on the best way to acquire vehicles for your fleet?

You might be considering whether you should provide a company car to a driver, or give drivers a car allowance for company use of personal vehicles.

Here at Foss National, we often advocate for a company car arrangement with drivers. And since this is a decision that greatly impacts your fleet operations, we wanted to go into some key reasons why.

So in this blog, we’ll look at four key advantages of leasing vehicles for drivers, and how this financing method can really benefit your business.


Benefit #1: Recruit More Drivers

Providing company-owned vehicles gives your organization a huge hiring advantage.  

Potential employees see a company car as a valuable benefit, like healthcare coverage or profit-sharing. A company vehicle can be the competitive advantage you need to attract the right talent before your competitors do.

Click here to learn how to make the right decision when choosing between company car vs. car allowance >>

On the other hand, if you require drivers to use their own vehicle at work, you might be excluding potential great hires if they:

  • Don’t currently own a vehicle
  • Have vehicle that isn’t right for the job
  • Don’t want to use their personal vehicle for work

Benefit #2: Control Your Company Image

The condition and type of vehicle used for business is a reflection on your entire organization. When you lease company-owned vehicles to drivers, you’ll have better control over your company’s image. Whether the vehicle is branded with your company name or not, you get to control the types of vehicles that arrive at your clients’ doorstep.

While many companies have fleet policies for personally owned vehicles (i.e.: the car must be less than five years old, there should be no exposed rust, etc.) this is sometimes difficult to manage and awkward to enforce.

Benefit #3: Keep Drivers Safe

A company-wide focus on driver safety has a big impact on employee retention and job satisfaction. Keep your employees safer on the road with vehicles you provide.

A company car will have all the latest safety features, while an employee’s may not always meet these standards.

Overall, company-provided vehicles are better maintained than employee-owned ones. Plus, a company vehicle will have a proper insurance policy to ensure your drivers aren’t exposed to unnecessary risks.

Benefit #4: Save Money on Fuel Costs

When companies provide a vehicle, the fuel and maintenance is managed through a dedicated fleet card.

A study by Fleet FInancials showed how one fleet management company reported a 30% decrease in business mileage after switching from a car allowance model to company-provided vehicles.

Conversely, employees may be tempted to exaggerate their business mileage in a car allowance program, costing the business extra money each month.


When it comes to acquiring fleet vehicles, a big decision is looking at the benefits of a company car vs. car allowance. In this blog, we’ve discussed four benefits of providing a company car, including recruiting more hires, better controlling your company reputation, better protecting drivers, and eliminating fraudulent mileage reporting.

Ready for the Next Step?

Download the white paper below. In it, you’ll find:

  • cost breakdowns for both leasing and reimbursement
  • bonus information on how leasing benefits both drivers and your company.

Article by David Thornton

Company Car Vs Car Allowance

Should you provide company-owned fleet vehicles or reimburse employees for personal use of their cars?

The answers to this age old question in the Canadian fleet industry are presented in a simple manner, with a valuable fleet leasing vs. purchasing cost comparison chart. Learn what factors to weigh to make the right decision – that's best-suited for your organization.

Download Now

Blog Comments