Employee Car Allowance or Small Fleet
Are you facing the question of starting a small business fleet or providing a car allowance to your employees? Both options have benefits and the choice will depend on your business type and needs.
Having a business fleet of vehicles brings with it additional overheads, but if your company provides a delivery service the fleet option may be the only route. The first question that you must address is should you lease or buy. Each option comes with both advantages and disadvantages, and you must select the one that best meets with your business requirements both now and the near future. Always look ahead when planning to make substantial investment.
Before proceeding with a leased fleet spend time to work out estimates for your additional costs including lease payments, fuel and fleet maintenance. Will managing the fleet be a full time job? If yes then add in the costs for an additional salaried employee. If the costs make it unfeasible you can consider paying your employees an allowance toward a company car. The employee then leases direct saving you the worry of having to manage a business fleet.
Either approach will still require consideration of the type of insurance needed for the fleet business vehicles. This will depend on the vehicle use, and your broker will be able to advise you further on the options for your individual business requirements.
Small fleet insurance will provide cover of all your business vehicles under one policy. The details of the policy will determine the costs. The more flexibility in the insurance conditions, the more expensive, but flexibility may be a requirement that your business needs. With large fleets,
Whichever route you choose, do spend time selecting the fleet manufacturer provider based insurance categories and the costs to repair and maintain that particular fleet model.