Independent research:
Aon Global Risk Consulting
Company car programs can evolve for years without being re-evaluated against their full cost.
Motus commissioned Aon to analyze 36 months of one employer’s actual costs across more than 8,000 employees, comparing its company car program with a fixed and variable rate (FAVR) reimbursement program. Employees in both programs held similar roles and drove passenger vehicle
The FAVR program’s results?
Lower costs. Lower liability. Fewer hidden expenses.
01 — Cost gap
For this employer, FAVR cost 17% less per driver per year than the leased company car program. That’s $1,797 per driver, based on actual spend independently reviewed by Aon.
FAVR program: FY23 to FY25 average
$1,797 less per driver,
per year (-17%)
Average annual cost per driver, FY23 to FY25
Annual cost per driver, FY23 to FY25
02 — Consistency
One good year could be a fluke. But three?
FAVR cost less per driver than the company car program in each of the three years analyzed, with and without a temporary lease rebate incentive offered by the fleet vendor. And while lease costs swung from year to year, FAVR costs per driver went down every year.
03 — Liability
Over the three years analyzed, the employer incurred retained liability costs under its company car program each year. Under FAVR, it reported $0 in employer-retained liability costs.
FAVR program: FY23 to FY25
$0 in reported employer-retained liability costs
Company cars
$1.9M
in employer-retained liability costs over three years
FAVR
$0
in reported employer-retained liability costs
Company car program: FY23 to FY25
$12,617
average cost per claim*
* Excludes claims under $50
Company car program: FY23 to FY25
$480,000
largest single incident, still
open at the time of analysis
*Source: Aon, Employer Vehicle Program Study
$1,000,000+
in company car repair costs, every year
*Source: Aon, Employer Vehicle Program Study
04 — Repair costs
Wear and tear, accidents, mechanical issues. For the company car program, repair costs sat on top of the lease payment, and they topped $1 million every year.
Rounded from three years of leased vehicle repair costs (Aon Tables 3–4, p.5),
each individually exceeding $1M: $1,088,341 / $1,011,314 / $1,157,687.
05 — The rebate reveal
The FAVR program cost 17% less than the company car program, even after accounting for a leasing company rebate that reduced the employer’s costs on new leases. That rebate applied only during the first three years of the arrangement. Without it, FAVR cost 20% less.
Savings with FAVR vs. Company Car Program
17%
with rebate
20%
without rebate
$2,144
less per driver, per year
The bottom line
Lower cost
per driver
every year with FAVR
No reported employer-retained liability costs
under FAVR
Predictable costs
year to year
with FAVR costs per driver
declining every year
For this employer, FAVR cost less than the leased program in every year analyzed.
It was just the more expensive one.
Talk to a Motus expert about what a FAVR program could look like for your team.
About the research
Motus engaged Aon Global Risk Consulting to conduct the Employer Vehicle Program Study, an independent review of 36 months (FY23 to FY25) of actual cost data across more than 8,000 employees at one large employer that runs both a leased company car program and a FAVR reimbursement program. Drivers in both programs work in sales and service, drive sedans and SUVs, and average about 15,500 business miles per year. Results are shown per driver, based on average monthly active drivers in each program. Some costs, including internal program administration, insurance premiums, and vehicle residual value, weren’t included for either program because the data wasn’t available or couldn’t be reliably allocated.
