Managing Personal Use of Company Vehicles

Allowing employees personal use of company vehicles is costly. Chiefly, accidents are expensive. But there are other costs to consider too—uninsured costs, lost staff time, lost revenue, and insurance costs.
Hedging these costs is possible when the rules are clear. Does your business have a written policy covering how employees may or may not use the company vehicle for non-business purposes?

Should I Allow Employees To Use My Vehicles During Non-Working Hours?

The decision is not always easy. To be cautious and to prevent any issues entirely, adopt a standard policy that prohibits the personal use of a company vehicle. If company vehicles are used for personal use, the possibility of an accident goes up. Ask yourself the following questions:

  • Can you afford the loss of work or customers that happen due to damaged vehicles or hurt employees?
  • Are you willing to pay the higher insurance premiums and fees caused by accidents from personal use?
  • How would your customers perceive you and your business when you show up in a dented company vehicle?

How Can I Best Manage Personal Use Of Company Vehicles?

Once you evaluate the pros and cons, if you decide to allow personal use of company vehicles, here are guidelines to help establish your own policy:

  • Only allow personal use for employees who are designated drivers for your business, 21 or older, and have a record of trustworthiness and safe driving.
  • Confirm the worker has a valid driver’s license and acceptable driving record.
  • Restrict who drives the vehicle. Do not permit the employee’s family or friends to use the vehicle.
  • Require the driver and all the passengers in the company vehicle to use safety belts at all times when the vehicle is in motion.
  • Prohibit talking or texting on a cell phone, operating a computer or other device while the vehicle is moving.
  • Prohibit operation of the vehicle if the driver has consumed alcohol, taken any prescription or drug that impairs driving performance.
  • Prohibit towing of trailers, campers or boats.
  • Prohibit transporting hazardous materials.
  • Do not allow rides to hitchhikers.
  • Prohibit the use of the vehicle for transportation during personal vacation.

Once the rules are in writing, require drivers to sign a statement listing the restrictions and agreeing to follow the policy and acknowledging that disciplinary action could be taken for failure to abide by the rules. Keep a copy of the statement on file.

In addition, whenever the company vehicle is returned, make sure it is in the same condition—visually and gas levels. Keep accident reporting kits in the vehicle and train workers on what to do if they get in an accident. Check the vehicle for unreported damage.

Managing and controlling the safe use of all company vehicles is always the business owner’s responsibility. Accidents are costly. It is important to take proactive steps to prevent accidents before they happen.

The information contained in this article is not intended as legal advice. If you have a legal concern regarding personal use of company vehicles, contact an attorney.

Amanda James is an Associate Attorney with the Sullivan & Ward Professional Corporation. She can be reached at (515) 247-4712 or