When AF last conducted its biennial Personal Use Survey in 1997, personal use of company vehicles had reached its highest point ever, at 92%. Two years later, that figure has declined 9%, to 83%. This decline is most likely due to cost-control measures and risk avoidance. While this is a substantial change the vast majority of companies surveyed still allow personal use.

SURVEY HIGHLIGHTS

The percentage of companies that allow personal use has dropped 9% since 1997.

The percentage of companies that allow licensed children to use company vehicles has dropped sharply, over 20%, since 1997.

Towing is prohibited by 79% of companies surveyed.
The IRS standard rate is the preferred method for determining what to charge employees for personal use.

The most common method for charging employees for personal use is a per-mile charge.

Is personal use of assigned vehicles allowed?

Yes  83%; No   17%

Who, besides the employee, is allowed to use a company vehicle for personal use?

Spouse:   63%

No one:   26%

Licensed children: 5%

Licensed children over 21: 2%

Others: 1%

What are the conditions for approved personal use?

Whenever necessary:  79%; Restricted: 21%

Despite an increase in restrictions in personal use of company vehicles since 1997, only about 1 in 5 of the companies surveyed has any such restrictions.

How are employees with no assigned fleet vehicle reimbursed for business use of their own vehicle?

Per-mile rate:  90%; Other: 10%

Are employees allowed to tow boats or tralers during personal use of the car?

Yes: 21%; No: 79%

An overwhelming majority of the companies surveyed do not allow employees to tow boats or trailers during personal use of company vehicles.

Do you require an MVR check of spouses who drive the company vehicle?

Yes: 39%;  No: 61%

How do you determine what to charge employees (or show as income inclusion) for personal use?

IRS standard rate: 33%

Annual lease value: 28%

Other: 12%

Average cents/mile expense: 9%

Comparable rates charged by competitive companies: 9%

Fleet average valuation: 6%

Commuting valuation rates: 3%

The standard rate is the most commonly used method to determine what to charge employees for personal use of a company vehicle.

How are employees charged for personal use?

per mile charge: 35%

other: 27%

flat monthly charge: 20%

flat weekly charge: 9%

flat and variable rate: 7%

graduated scale: 2%

How do you determine the fair market value of a vehicle?

Cost of the vehicle (including taxes, fees): 49%

Other: 42%

Manufacturer's invoice plus 4%: 7%

MSRP invoice less 8%: 2%

How are personal use charges collected?

Payroll deduction: 59%

Other: 23%

Expense account deduction: 10%

Employee check: 8%

If an accident occurs during personal use, is any portion of the repair cost charged to the employee?

Yes: 31%; No: 69%

What method do you use to charge employees for personal use of a fleet vehicle?

Directly by the company: 34%

By income inclusion: 44%

Not charged: 22%

MVR Checks on the Rise

In 1999, 39% of companies surveyed said they check the motor vehicle records (MVR) of the drivers who are assigned company vehicles. This percentage is up slightly since 1997, but is still low given potential company liability for negligent entrustment. Companies that allow drivers with a history of citations, accidents, or drug or alcohol abuse to operate company vehicles may be held liable for negligent entrustment of a vehicle and sued in the event of an accident claim. That places greater responsibility on companies to check the background of employees and other employee family members who are allowed to drive a company vehicle.