Chapter Corner

Jeff Krogen

Warning: Reimbursement Can Cost More Than a Company-Owned Fleet

When looking at the entire cost to own a vehicle versus reimbursing drivers at the 2013 IRS rate of 56.5 cents a mile, a company-provided vehicle can cost considerably less. Operating a fleet enables businesses greater control of the ownership-related expenses such as depreciation, interest, tax, registration fees, fuel, insurance, maintenance, and repairs. Right-sizing both the vehicle and the fleet can go a long way toward decreasing the operating expense even in lower mileage applications. But unlike the vehicle's dashboard, there are no blinking lights to warn businesses that reimbursing drivers for using their own vehicles could be dangerous to the bottom line.