The National Association of Fleet Administrator's (NAFA) annual study of personal use chargebacks and reimbursements showed that charges to drivers for personal use of company vehicles continue to climb at a slow pace, while driver reimbursements for business use of personal autos has reached an all-time high.

With 246 fleets representing 198,268 passenger cars participating in the survey, the 1979 results, as reported in the NAFA Bulletin, indicate the most frequently used personal use chargeback is eight cents per mile, up a penny over 1978, while nearly eight of every 10 fleets report a driver reimbursement rate of 17 cents or more per mile when the employee uses a personal car for business purposes.  In the 1978 study, only 30-percent of the fleets participating reported reimbursement rates of 17 cents or more per mile.  The survey also found that Canadian fleets continue to pay higher reimbursement rates than their U.S. counterparts and that the overall percentage of fleets not charging for personal use dropped to eight percent as compared to 12.8-percent not charging for personal use in 1978.

A total of 186 U.S. commercial fleets participated in the study and were classified in one of seven categories: Drug & Cosmetics; Food & Beverage; Insurance; Chemical & Petroleum; Manufacturing-Industrial; Manufacturing-Consumer, and other.  Nine public utility fleets, 14 government fleets and 37 Canadian fleets also participated.

A total of 25 fleets were represented in the Drug and Cosmetic group and these fleets operate a total of 15,609 passenger cars.  All 25 allow personal use of the company vehicle by the driver with no mileage limitation.  One fleet, however, does not permit the vehicle to be taken on vacations.  Of the total mileage reported by this group, 14 percent represents personal use, and all but three of the fleets charge for that use.  Eleven of the fleets use a flat weekly or monthly charge, nine fleets have a straight mileage charge and two use a combination of flat charge and mileage rates.  Of the fleets using a straight mileage charge, four charge eight cents per mile, two charge nine cents per mile while one fleet each charges four, five and a half and six cents per mile.  Flat monthly charges among the fleets range from $25 a month in three fleets up to $38 per month in another fleet.  Two fleets charge a varying rate depending on the type of car involved, one fleet charges between $15 and $40 per month, while the other charges $14 to $24 per month.  Weekly charges range from $5 to $6.50 in this group.

The combination charges used by two fleets are set at $40 per month plus five cents per mile in one fleet and $15 per month and five cents per mile in the other.  Every fleet allows the driver's spouse to use the car, 18 allow licensed children of the employee to use the vehicle and five permit other licensed drivers to use the vehicle.  Personal use chargebacks are collected by 14 of the fleets through expense account deductions, while eight fleets deduct the chargebacks from salary.  Company cars in this group are almost always assigned on the basis of job title or job responsibilities, while seven also considered the vehicle to be a fringe benefit.

Use of personally-owned vehicles when there is no assigned fleet car is reimbursed on mileage in all but one fleet and the most common rate reported was 17 cents per mile (nine fleets).  The highest rate reported in this group was 20 cents per mile, a rate used by two fleets, while two other fleets said they use 18.5 cents and two use 18 cents.  Four fleets pay 15 cents a mile and one fleet uses an $80 per month payment plus nine cents per mile.

All but one of the fleets reimburse the driver on a per mile basis for business use of a personal car when the assigned fleet vehicle is not in operation.  Twelve fleets use a 17 cents per mile rate, four pay 15 cents, three pay 18.5 cents and one each pay 14 cents, 17.5 cents, 18 and 20 cents per mile.  The fleet not using a per-mile rate reimburses drivers at a flat rate of $190 per month for business use of a personal vehicle.

The Insurance Group included 35 fleets operating 34,936 vehicles, and all fleets in this category allow personal use of company vehicles and again, only one fleet does not permit the vehicle to be used on vacations.

Personal use is limited by three fleets.  One limits it to 10-percent of total mileage, another to 25-percent and the third said such use should be "reasonable." Overall the fleets reported that personal use averages about 17-percent of total mileage.

All but one of the fleets charge drivers for personal use with 19 fleets basing those charges on mileage, 12 use a flat monthly or weekly rate and four use a combination of the methods.  Five fleets charge eight cents per mile for personal use, and three fleets each charge nine, 10, 12 and 13 cents per mile while another fleet charges only five cents.  Monthly charges range from $25 per month rate.  One fleet has a variable monthly charge that depends on the type of car and that charge ranges from $10 to $40 per month.  One fleet charges $6 per week.

Of the four fleets that use a combination charge, one fleet has a $40 per month rate plus nine cents per mile on trips more than 100 miles from home; one adds $50 per month to the employee's income and charges seven cents a mile for all mileage over 750 per month; one charges $15 per month plus 12 cents per mile and the fourth charges $15 every other week plus seven cents per mile when personal mileage exceeds 2,000 miles.

Expense report deduction of the chargebacks are used by 22 fleets, salary deduction is used by 10 and other means are used by two fleets.

All but two fleets allow the driver's spouse to use the company car, 21 allow licensed children to use the vehicle and four allow others to use the vehicle.  Most of the fleets in this group assign vehicles on the basis of miles driven with many requiring that the driver must travel at least 12,000 miles per year on business to be eligible for a company-provided vehicle.

A straight mileage rate is used by 29 of the fleets when reimbursing a driver for business use of a personal vehicle where there is no assigned vehicle.  Of the other fleets, one pays a fixed amount; two repay the employees on a graduated scale, and one uses a "Runzheimer" schedule.  Mileage reimbursements range from 10 cents per mile in one fleet to a high of 26 cents a mile in another.  Ten fleets pay 15 cents per mile, nine pay 17 cents, four pay 18 cents, two pay 20 cents and one each pay 16, 16.5 and 19 cents per mile.  Of the two fleets using a graduated scale, one fleet pays 16 cents per mile for the first 700 miles and 10 cents per mile above that point and the other pays 17 cents per mile up to 15,000 miles per year and 10 cents per mile for distances past that point.

Reimbursement for use of a personal car when the assigned car is not in operation is based on mileage by all but one of the fleets.  Eleven pay 17 cents per mile, nine pay 15 cents per mile, two each pay 16, 18 and 20 cents per mile and one each pays 10, 16.5, 19 and 26 cents per mile.

In the Food & Beverage category, 18 fleets responded representing 10,443 passenger cars.  All allow personal use of the vehicle, including vacations and only one has a limit on the number of personal miles.  Average personal use as reported by this group amounts to 14-percent of total vehicle mileage.  Sixteen of the 18 charge for personal use while the other two do not.  Of the 16, 10 use a straight mileage charge, three use a flat monthly or weekly fee, and two others use a combination of the first two methods.  Straight mileage charges range from seven cents per mile (two fleets) to 18.5 cents per mile (one fleet).  Four fleets charge eight cents a mile, two charge nine cents and another charges 17 cents per mile.  The flat charges range from $6.75 a week to $20 per month.  One fleet uses a combination charge of $20 per month and five cents for each mile in excess of 400 personal miles per month while another charges $25 per month and 10 cents for each mile over 100 miles.  The chargebacks are collected through expense report deductions by 14 fleets, salary deduction is used by another and one fleet collects a personal check from the driver.  All fleets allow the driver's spouse to use the company car and nine allow the driver's licensed children access to the vehicle, but none of the fleets allow other persons to use the vehicle.

Job title or responsibility is the primary criterion for company car assignment by most of the fleets in this group and of those assigning a vehicle on the basis of mileage, 15,000 miles per year was the most often mentioned minimum.

For those employees who use personal cars for business where there is no assigned company vehicle, all but one fleet reimburses the drivers the drivers on a straight mileage basis.  Seven fleets pay 18.5 cents per mile while four pay 17 cents and two pay 15 cents.  One fleet each pays 14 and 20 cents per mile.  One fleet pays 16 cents per mile for the first 16,000 miles and 11 cents thereafter.

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Employees using their own cars when their fleet vehicle is out of service are reimbursed on al mileage basis by all fleets in this group.  Among these rates, six fleets pay 18.5 cents per mile, three pay 17 cents, two pay 15 cents and one each pays 12, 14, 16 and 20 cents per mile.

A total of 10,663 passenger cars are operated by the 14 fleets participating in the survey from the Chemical & Petroleum group.  All but two allow personal use of the company car and of the 12 allowing personal use, two do not allow the vehicle to be used for vacation travel.  Limits on personal miles were reported by three fleets one of the three limits vacation use to 1,000 miles, another requires that permission be obtained for any personal trip in excess of 200 miles and the third fleet restricts personal use to a 50 mile radius of the driver's home.  This group reports that personal use accounts for approximately eight percent of total mileage.

Personal use chargebacks are based on straight mileage in eight fleets and all have different charges, ranging from a low of seven cents per mile up to 14 cents per mile.  Flat monthly charge are used by four fleets, one using a $20 per month charge, while another has a variable rate from $25 to $35 per month based on the type of car.  Still another flat monthly charge is based on mileage between the driver's home and the office and it ranges from $40 to $100 per month and the amount is reported as additional income.

Expense report deduction of personal use chargebacks are used by eight fleets, while three use salary deductions.  Two fleets add are personal use charge to the employee's W-2 form as additional income.

The driver's spouse is allowed use of the company vehicle in nine fleets, but only one fleet will allow licensed children or others to use the car.  A majority of the fleets base car assignment on mileage driven with minimum limits ranging from 10,000 to 20,000 miles per year.  The most often mentioned minimum was 12,000 miles per year.

When there is no assigned company vehicle and an employee uses a personal car for business, nine of the fleets reimburse the driver on a mileage basis.  Seven fleets pay 17 cents per mile and one each pays 15 and 18.5 cents per mile.  Another fleet in this group pays the driver $150 per month plus 5.5 cents per mile, while three other fleets use a graduated scale.  The scales range from 19 cents for the first 1,000 miles and nine cents for additional mileage in one fleet to 17 cents per mile for the first 12,000 miles and eight cents per mile thereafter.  The third pays 19 cents per mile for the first 1,250 miles and 12 cents thereafter.

When an assigned vehicle is not in service, nine fleets pay drivers using their own cars for business 17 cents per mile, while one each pay 15, 18.5 and 20 cents per mile.  Two fleets base reimbursements on a sliding scale, 19 cents for the first 1,250 miles and 12 cents per mile after that point and 19 cents for the first 1,000 miles and nine cents thereafter in the other fleet.

Participating in the Manufacturing-Industrial Group were 43 fleets operating 35,156 passenger cars.  Of these 10,147 were company owned, 23,942 leased and 1,067 employee owned.

Of these fleets, all but one permit personal use of the company car after working hours, on weekends, and holidays, while two others do not allow vacation travel use.  Four fleets placed a limit on the amount of personal driving permitted - in two cases an employee's manager must approve any vacation driving, another puts a 100 mile limit on personal use, and the last permits only commuting to and from work.

Four fleets in this category do not charge for personal use of the company car.  A personal mileage charge is used by 21 fleets, while 12 have a flat weekly or monthly charge and four use both methods.  Fleets using a direct personal mileage charge broke down to five fleets at eight cents a mile, three each at 10 and 11 cents a mile, two at nine cents and one fleet each at five, six, and seven cents a mile.  Another fleet charges seven cents a mile for a compact and nine cents a mile for full size cars.

In the minority were two fleets that added company car driving to an employee's income.  One fleet adds three cents a mile to the employee's W-2 form and the other adds $600 a year to the employee's basic salary.

Among the fleets using a flat weekly or monthly charge, $25 a month is charged by three fleets, while one fleet each charges $7, $9 and $10 a week.  Charges of $10, $30 and $35 a month are levied by one fleet each, while one fleet utilizes a chargeback of either $35 or $50 a month, depending on the assigned car.  In another fleet the range is from $10 to $50 a month, while another fleet adds $40 a month to the employee's W-2 form.

Combination personal use charges are used by four fleets in this group: $10 a week plus the cost of gasoline; $20 a month plus eight cents a mile; $30 a month plus five cents for each vacation mile; and two cents per cylinder per mile plus $20 a month.

An expense report deduction for personal use of the company car is charged by 24 fleets, while a salary deduction is used by eleven fleets and four employ other methods, such as a chargeback on the employee's W-2.

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The employee's spouse is permitted to drive the company car by 35 fleets, and 16 extend the privilege to licensed children.  Only two fleets allow the vehicle to be driven by "others."  A minimum age limit is set by 15 fleets in this category.

In the majority of fleets, job title or responsibilities are the criteria for assigning a company car, although the company car was considered a "fringe benefit" by seven fleets.

Reimbursement for use of a personally owned car, when there is no assigned fleet car, is based on mileage only in 35 fleets.  A "Runzheimer" schedule is used for reimbursement by three fleets, while three pay on a graduated scale and two pay a fixed amount plus mileage.  Sixteen fleets pay 17 cents a mile, four pay 18.5, three each pay 15, 18 and 20 cents and one each pays 16, 19 and 23 cents per mile.

The fleets using a graduated scale pay 17 cents for the first 1,000 miles and 10 cents thereafter; 18 cents for the first 25,000 miles and 15 cents for additional mileage, and 17 cents a mile for the first 10,000 miles and 14 cents for the balance.

Reimbursements for use of a personally owned car when an assigned fleet is not in operation include 17 cents per mile in 21 fleets, 18 and 18.5 cents for four fleets, 15 and 20 cents a mile for two fleets and one fleet each at 11, 16, 19, 22 and 23 cents a mile.

The manufacturing-consumer Group represents 36 fleets operating 43,960 passenger cars.  Of these, 26,114 are company owned, 16,816 are leased and 1,030 are employee owned.

Personal use of the company-provided car after working hours and on weekends and holidays is permitted by all but three fleets, while one fleet does not permit its use on vacations.  A limit on personal use of the company car is imposed by four fleets.  Two fleets limit vacation travel only (2,000 miles for one and 2,500 for the other), while one fleet has a limit of 500 personal miles per month and the other 3,600 miles a year.  The fleets in this group estimate that personal use is about 15 percent of total vehicle mileage.

Fifteen fleets base their chargeback on mileage alone, 12 fleets have a flat personal use charge and five use a combination of both.  For the fleets with a mileage charge, four use nine cents a mile, three each charge eight and 10 cents a mile and one fleet each charges seven, 13 and 15 cents a mile.  Another fleet adds 17 cents per mile to the employee's W-2.

With fleets employing a fixed charge, two used $25 a month, with all others having different chargeback rates.  Weekly these charges include $8.65 $10 and $9 a week, while monthly charges include $10, $34, $45 and $65.  The assigned car is used as the basis for charges in two fleets - ranging from $10 to $30 a month, while one fleet assesses the driver one percent of the cost of the car per month.

The rates of the five fleets using a combination chargeback scheme are $15 a month and five cents a mile over 3,600 miles a year; $30 a month plus seven cents per mile; and $5 a week plus nine cents a mile.  One fleet said it charged $9 a week up to 250 miles, and after that and on vacations the employee pays all expenses.

An expense report deduction is used by 20 fleets, 12 fleets have a salary deduction and two add the personal use charge to the employee's W-2 form as taxable income.  Personal use is restricted to the employee alone by only two fleets.  Thirty-one permit the spouse to drive the company car, with 21 extending this privilege to licensed children.  Only two let "others" drive the vehicle.  Eleven fleets set an minimum age level for use of the company car, with the lowest being 18 years.  The rest said it was either 21 or 25 years.

The majority of the fleets reporting in this group stated that car assignment was related to job, but seven fleets considered it a "fringe benefit."  When there is no assigned car and the employee uses his own, 27 fleets paid for mileage, three used a sliding scale and one a fixed amount plus mileage.  For fleets with a mileage-based reimbursement, four pay 18.5 cents, 18 pay 17 cents a mile, three pay 15 cents, two pay 18 cents and one each pays 16 and 21 cents a mile.

Fleets using a graduated rate pay 17 cents for the first 10,000 miles and 10 cents for additional mileage; 18.5 cents for the first 15,000 miles, 10 cents thereafter; and 17 cents for the first 10,000 miles, with 12 cents charged for additional miles.

With an assigned fleet car out of service, 17 fleets pay 17 cents a mile for reimbursement to an employee using his own car; five pay 18.5 cents; three pay 18 and one each pays 15 and 16 cents a mile.  One fleet pays a flat rate of $250 a month for business use of a private car, and another pays the employee eight cents for the first 400 miles, seven cents a mile thereafter plus $35 a month.  Another fleet pays 17 cents for the first 600 miles then eight cents a mile for additional driving.

There is a small group of fleets who do not fit into any of the regular business categories that participated in this survey.  This "other" group consists of 15 fleets operating 3,314 passenger cars, with 1,547 of these being company owned, 1,629 leased and 138 employee owned.

Every fleet in this category allows personal use of the company-provided car after working hours, on weekends, holidays and vacations.  Only one fleet puts a limit on the amount of personally-driven miles - 50 miles.

Of the fifteen fleets in this group, only three do not charge for personal use.  A straight personal mileage charge is used by six fleets; four use a flat weekly or monthly charge and three employ both methods.  Two fleets charge eight cents a mile and one each has a chargeback of five, seven, eight and a half, and ten cents a mile.

The assessments for personal use made by the fleets with a flat charge range from $37.50 to $20 a month added to the employee's W-2, and $25 to $45 a month depending on the assigned vehicle.  One fleet charges six cents a mile plus $42 a month while another sets the personal use of chargeback at seven cents a mile plus one half of one percent of the new car price per month.  Five fleets in this category of "other" collect the personal use chargeback through expense report deductions, with four having a salary deduction and three fleets employing other means.

Personal use by the employee only is limited in this group to only three fleets.  The others extend this privilege to the employee's spouse, with four fleets permitting licensed children to use the company car.  No fleet permits "others" to use the company vehicle.  Only one fleet set a minimum age, 21 years, for driving the company car.  Most of the fleets in this category assign a company car on the basis of job title.

For employee use of a personally-owned car when there is no assigned vehicle, 12 fleets use mileage as a guideline.

 

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