Can a Vehicle-Related Benefits Program Reduce Costs?

A current issue within not-for-profit and governmental entities is whether it makes financial sense to provide vehicles to employees or to reimburse them for use of their personal vehicles.  Vehicle costs are under increased examination because not-for-profit and governmental organizations are typically under pressure to reduce costs.

According to a 2015 survey, "Vehicle-Related Benefits Programs" by WorldatWork, 89% of organizations offer at least one vehicle-related benefit, including a car allowance, company car, fuel reimbursement or other vehicle benefits.  The top three vehicle-related benefit programs are:

  • Fuel or mileage reimbursement (70%)

  • Vehicle allowance (69%)

  • Automobile provided, including lease vehicles that the organization owns (60%)

Below are several additional highlights from the 2015 survey:

  • Similar to findings in earlier studies, 75% of organizations offer a car allowance to executives, while 66% provide executives with a personal vehicle.

  • Fuel or mileage reimbursement is widely eligible for employees with a bona fide business need (69%).

  • 64% of organizations report that vehicle benefit programs are believed to have a positive impact on employee satisfaction.

  • Two-thirds of organizations promote their vehicle-related programs as a key employee benefit to attract new employees.

Management may feel that shifting to an employee reimbursement program may be the best way to accomplish cost reductions.  However, a detailed financial analysis should be completed first to determine if this is a smart plan of action.  In addition, management must also consider qualitative issues, such as employee satisfaction and productivity, as well as public image when making these decisions.  If your organization is considering a vehicle-related benefits program Schneider Downs can assist in analyzing your vehicle costs and what vehicle-related benefits would work best for your organization.

For more information, please contact Schnedier Downs or visit the Our Thoughts On... blog.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

Paycheck Protection Program Borrower and Lender Responsibilities
Loan Forgiveness Interim Final Rule
Documenting Paycheck Protection Program Requirements of “Need and Liquidity”
ICYMI: New DOJ Collusion Guidance
SBA Releases PPP Loan Forgiveness Application – With Instructions and Changes
Is Your Start-Up or Small Business Strapped for Cash? The Employee Retention and R&D Credits Could Help

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222
p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102