A total of 358 fleets, operating 237,710 vehicles, participated in NAFA's latest annual Personal Use Survey. The breakdown of responses is: 267 from commercial fleets in the United Stales; 41 Canadian fleets; 30 government fleets, and 20 public utility fleets. The Personal Use Survey covers three very important areas of fleet management: 1) when employees are able to use business cars for personal use; 2) who gets business cars, and 3) how employees are charged for personal use of business cars, or how they are reimbursed for use of the personal car for business.

Survey Highlights

• In contrast to last year's survey results, more fleets charge drivers for personal use via a mileage-driven rate rather than a flat rate each period.

• Most fleets responding to the survey collect personal use mileage charges through salary deductions rather than expense reports.

• A majority of drivers are charged their insurance policy deductible amount when they are involved in an accident while using a company car for personal use.

NAFA breaks the responses down into seven categories: Drug and Cosmetics, Chemical and Petroleum, Food and Beverage, Insurance, Manufacturing-Consumer, Manufacturing-Industrial, and Miscellaneous. Automotive Fleet has selected three of the above categories for this article: Manufacturing-Consumer, Manufacturing-Industrial, and Insurance.

Manufacturing-Consumer Fleets

Thirty-three Manufacturing-Consumer company fleets, responsible for 34,882 vehicles (24,941 U.S. company-owned; 8,670 U.S. -leased, and 1,271 U.S. employee-owned) responded to the survey.

Every fleet in the group allowed personal use of company cars after hours and on weekends, holidays, and vacations. Twenty-nine of the 33 responding fleets have no limit on the number of personal miles a driver can put on a car. This resulted in a monthly average of 353 personal miles driven by each employee. This, the companies responded, was approximately 16.5 percent of the fleet's total mileage each month.

Corresponding with this, 29 fleets charge employees for personal use of a fleet car. The split between chargeback methods is almost even: 12 use a mileage-driven charge method; nine have a flat monthly or weekly rate, and eight use a combination of both methods. Fifty-five percent (18) of these fleets have not increased the charge for personal use in the last year. The average personal mileage charge was almost 15 cents (14.6) for each mile.

The most often cited method for collecting personal use charges for Manufacturing-Consumer fleets is through an expense report deduction. Fifteen fleets, or 46 percent, use this method. The second most popular was collection via salary deduction, where 10 fleets, 30 percent, responded they used this method. Approximately one-fourth (8) of these fleets use other methods of collection.

Every fleet in the group permits personal use by both the employee and spouse. In addition, 19 of the 33 fleets allow licensed children to drive the company car. Eleven of those 19 fleets have a minimum age requirement of 18 years.

To the question, 'Is any portion of repair costs resulting from accidents during personal use charged to the operator?' 15 fleets responded 'Yes' and 18 responded 'No.' Of that 15, 10 fleets charge a dollar amount based on a percent of the cost, and five charge a "deductible" amount according to their insurance policy. No one charges the full amount of the damage and no one charges a fixed share of the cost of the damage. In 17 of the 33 fleets, the employee is charged with an accident if another person was driving the company car at the time the accident occurred.

A combination of factors is used to determine who gets a company car in the Manufacturing-Consumer company fleets.

An employee's job title is the most important factor according to 24 fleets who said this was a determinant in getting a company car. Next was the mileage the employee drove in a year; 16 fleets noted this was used to assign cars. Nine fleets said cars were given as part of the employee's fringe benefit plan.

If an employee's assigned car is not in operation, there are several options the companies take to get that person a car. Thirty-one responded they rent a car; 29 let the employee use his/her own car; 14 set up a car pool system, and five are allowed to use the district manager's car.

When reimbursing an employee for business use of a personal car, most fleets pay only for mileage driven. Twenty-two fleets said they reimburse employees an average of 20 cents a mile regardless of the miles driven. Two fleets pay a fixed amount plus approximately 11 cents a mile for a cost of $ 133.50 a month. Two fleets use the Runzheimer Schedule, one uses a graduated scale where a certain amount is paid for the first set of miles, and a different amount is paid for any miles over that. One fleet pays a fixed rate of $35 a week.

When reimbursing an employee who used a personally-owned car because his/her assigned fleet car was not in operation, 28 fleets pay an average of a little more than 19 cents a mile, while one fleet pays an unspecified fixed amount.

Slightly more than half the fleets (17) compensate employees who, because of transfer or reassignment, are no longer eligible for a company car. The amount of compensation, in most cases, is determined on a case-to-case basis.

Two of the respondents said the IRS had conducted an audit of their companies within the last two years. That audit included investigation into the companies' personal use policies.

Manufacturing-Industrial Fleets

Fifty-nine Manufacturing-Industrial fleets, operating 34,312 vehicles (29,909 U.S.-leased; 2,856 U.S. company-owned, and 1,547 U.S. employee-owned) responded to the survey.

Ninety-seven percent of these fleets (57) allow employees personal use of company vehicles. Fifty-four fleets allow employees to use the company vehicle after working hours and on weekends and holidays. Fifty-three said employees are allowed personal use of company cars while the employee is on vacation. More than 80 percent of the responding companies have no limit in personal mileage. This results in a monthly personal mileage average of 533 miles for each employee. This, the companies cited, equals an estimated 21.7 percent of the company's total fleet mileage each month.

Forty-nine fleets charge employees for personal use of company cars. Most companies (20) charge a flat monthly or weekly rate. Fifteen fleets charge an average of 11.6 cents a mile for each personal mile the driver puts on the car. Fourteen fleets use a combination of the flat rate and mileage charge methods. The charge for personal use of fleet cars increased in more than half the responding companies: 28 percent said increases were necessary; 25 said the rates remained the same as the previous year.

Two methods for collecting personal use charges were used by almost the same number of respondents. Twenty-one fleets said they collect the money through expense report deductions, while 20 said they use salary deductions to get personal use charges. The remaining fleets cited other methods of personal use collection, but they did not specify what they were.

Almost all the fleets allow the employee's spouse to use the company car: 50 responded affirmatively while none responded negatively. Of the 23 that responded to whether they allow employee's children to drive the company car, all said 'Yes.' Slightly more than half, 28, said they have a minimum age requirement for driving a company car and 27 said they do not.

In answering the question, 'Is any portion of repair costs resulting from accidents during personal use charged to the operator?' the same number of fleets (29) responded 'Yes' and 'No.' Of the 29 who charge the operator, 14 charge the insurance company "deductible" amount, eight charge a dollar amount based on the cost of the accident, two charge a fixed dollar-amount, and one fleet charged the operator the full amount of the damage. Out of 54 responses, 37 said they charge the operator with an accident if another person was driving the company car at the time the accident occurred.

There are two major factors that determine who gets a company car in Manufacturing-Industrial fleets: job title and number of business miles driven. Job title was a determining factor for 47 fleets, and, in 33 fleets, if a driver averaged approximately 13,300 miles a year, he/she was assigned a car. Sixteen fleets said they give out company cars as part of the employee's fringe benefit plan. Five fleets gave "other" reasons for assigning company cars.

If an employee's assigned car is not in operation, Manufacturing-Industrial fleets are likely to take one of three major alternatives to get that person a car. Most fleets (56) said they allow the employee to use his/her own car until the company car is operable. Forty-seven fleets rent a car, and 36 use a car pool system. Seventeen fleets allow drivers to use their district manager's car.

When reimbursing an employee for business use of a personally-owned car, 48 of these fleets pay only for mileage driven. The average cost paid per mile is 20.3 cents. Five fleets pay a fixed dollar amount plus an average of 8.2 cents a mile for an average monthly payout of $204.88. Three fleets use the Run-zheimer Schedule, three use a graduated scale of payment, and two pay an unspecified fixed amount each month.

Thirty respondents said they compensate employees who, because of transfer or reassignment, are no longer eligible for a company car; 26 said they did not.

An overwhelming majority (51) said they had not been audited by the IRS within the past two years. The three that were audited said the audit included an investigation into the company's personal use policies.

Insurance Company Fleets

Fifty insurance companies in charge of 7,519 vehicles (4,679 U.S. company-owned; 2,617 U.S. leased, and 223 U.S. employee-owned) responded to the survey.

Of the 24 fleets that responded to questions regarding when employees could use company cars for personal use, all said employees could use them after work hours, and on weekends, holidays, and vacations. (Twenty-six fleets did not respond to this question; none said no.) Twenty-one of the 24 fleets have no limit on the number of personal miles a driver can put on a car. This results in a monthly average of 466 personal miles for each driver, which, the companies estimate, is a 22.5 percent of the total fleet mileage.

Twenty of 22 fleets charge drivers for the personal mileage they put on the company car. Eight fleets charge a flat monthly rate; eight charge a flat monthly rate plus a mileage fee, and seven charge only a mileage fee. Eleven fleets increased, from last year, the fees they charge drivers for personal mileage; eleven fleets also kept the same rates as the previous year.

Twice as many fleets collect the charges for personal use of company cars through salary deductions as those who collect otherwise. Ten fleets use the salary deduction method; five collect through expense account deductions, and five use "other" methods.

Of the 20 fleets that responded, all allowed personal use of company vehicles by the spouse of the employee. Eight also allowed personal use by the children of the employee and one allowed personal use by "others." Eighteen of 23 responding fleets have no minimum age requirement for personal use of business cars.

Seventeen of 50 fleets charge employees for a portion of the costs resulting from accidents during personal use of a company car. Ten fleets charge the insurance "deductible" amount; four charge a dollar amount based on the cost of the accident; two charge the full amount; one bases charges on "other" criteria. Twenty-one of 43 fleets charge the employee with an accident if another person is driving the car at the time the accident occurred.

Two reasons were noted as most significant in determining who gets a company car. Thirty-four fleets said the average yearly mileage is a determinant. Drivers who average 11,922 miles a year usually are assigned a company car for insurance company fleets. Thirty-three fleets use the employee's job title as a criterion for assignment of a company car. Seven fleets give a company car as part of the employee's fringe benefit plan; three cite "other" reasons for assigning cars.

When an employee's company-assigned car is inoperable, 47 fleets rent a car for him/her; 45 fleets allow the employee to use his/her own personal car, and 31 fleets set up a car pool system. Six fleets allow the drivers to use the district manager's car.

When reimbursing an employee for business use of a personal car, 45 fleets responded they pay only for mileage driven. The amount they paid was 20 cents a mile. Four fleets use a graduated scale of payment where a certain amount is paid for the first set of miles and a different amount is paid for any mileage over that. One fleet used a fixed amount of payment plus paid for mileage. The payment for mileage was not given, but the average total monthly payment was $245. One fleet uses the Runzheimer Schedule of payment.

When reimbursing an employee who uses a personal car, because his/her company-assigned car is inoperable, 48 fleets pay for mileage only. No other methods of payment were given for this situation.

To the question, 'Does your company compensate employees, who, because of transfer or reassignment, are no longer eligible for a company car?' 27 insurance company fleets said 'Yes' and 19 said 'No.' Forty-two fleets had not been audited by the IRS in the previous two years. The seven fleets which were audited had their personal use policies investigated.