Average Personal Use Charges Increase to $121 in 2013
Personal-use charges are increasing in correlation with fuel prices. More fleets are reviewing current policies or instituting new ones.
Fuel costs are up, fringe costs are a concern, and technology is providing in-depth reviews of fleet costs, working to impact the fee drivers might be required to pay for personal-use privileges. In 2013, average monthly personal-use charges increased to $121, up from $116 in 2012 and $118 in 2011.
Automotive Fleet’s annual survey of personal-use charges and policies took place via an online questionnaire, completed by commercial fleet managers across all industries.
For the first time in this study, because not all fleet vehicles are used for the same purposes, the percentage of fleets that allow personal use of company-provided vehicles was broken out by field and non-field vehicles. The percent of fleets that allow personal use of company-provided field vehicles increased to 87 percent in 2013, vs. 85 percent in 2012. Of the fleets that operate non-field vehicles, only 38 percent allow personal use.
Most fl eets (73 percent) allow an employee’s spouse to utilize a company-provided vehicle, up 10 percent from 2012. The percentage of fleets that do not allow anyone personal use of a company-provided vehicle dropped from 30 percent in 2012 to 25 percent in 2013.
Based on feedback sent by fleet manager respondents, the increase in personal-use charges may be in correlation to the continuing increase in gasoline prices.
“I sent a communication to drivers justifying the increase in the personal-use fee, based on an increase in fuel expense,” said one fleet manager, who wished to remain anonymous. “When fuel prices dropped again, fleet received many inquiries about when the personal-use fee would be reduced.”
Some fleets are going to be incorporating personal-use charges in their fleets starting in late 2013 or early 2014, but are struggling to settle the logistics.
“I know we need to charge for personal use, but I struggle to find out the best way to manage it and determine who is responsible (fleet, HR, or payroll),” said one anonymous fleet manager.
One fleet manager noted concern about the fringe costs associated with personal use, such as additional cleaning charges, more frequent maintenance requirements, etc. “We are investigating the fringe costs associated with personal use. There has not been an increase in many years and we are now in the process of determining what that number should be raised to,” said one fleet manager, who wished to remain anonymous.
Most fleets (83 percent) allow personal use at all times, whenever necessary — up from 71 percent in 2012.
Other challenges are reported with determining personal-use fees. “Variable personal-use charges is one way to offset increases in costs related to choice. The problem is, it creates an administrative challenge and requires rules for reassigning cars and other swaps. These may not always look fair to the drivers,” noted one fleet manager, who wished to remain anonymous.
One fleet manager noted that her company began using a GPS tool to track business and personal mileage.
“This tool has automated the mileage collection process and provides employees with an electronic daily mileage log which is compliant with the IRS regulations,” she said. “It has automated the personal-use deduction, based on employees’ actual miles driven which is a more fair and equitable way to assess personal use of the company car.”
Finally, some increases to personal-use charges are occurring based on the vehicles used. “With increases in technology from our fleet management company, our drivers continue to get more out of the personal use of the vehicle,” said an anonymous fleet manager. “Each year, we do an in-depth calculation to determine the average personal use on a vehicle, and we base our personal-use fees as a portion of that amount.”