And what forward-thinking retailers are doing instead
What Made Company Cars Appealing in the First Place
Company-owned vehicles used to be a staple of field team management, especially in retail. They offered control, consistency, and a clear benefit for employees. But, what once made sense for small teams no longer scales with growth.
A Symbol of Simplicity
Early on, passenger fleet programs gave brands a way to manage costs and standardize experience across teams. Sales reps got reliable transportation. Ops leaders got visibility and control.
Why the Model No Longer Scales
As companies grow, so do fleet counts, liability exposure, maintenance costs, and insurance premiums. Admin burden increases. Program rigidity sets in. What used to feel manageable now feels like a cost center that limits flexibility.
The Hidden Costs of Company Car Programs
Insurance, Fuel, and Maintenance Are All on the Rise
Commercial auto insurance costs are surging, up 9.8% last year alone. Claims are more severe; repair costs are rising, and premiums are mounting. According to Marsh, commercial auto premiums have jumped nearly 50% since 2020.
Add fuel, downtime, and depreciation, and the total cost of ownership balloons quickly, especially for retailers with large mobile teams.
24/7 Liability That Doesn’t Clock Out
When you own the vehicle, your risk doesn’t end at 5 p.m. Any off-hours incident involving that car is still on your books. Fleet programs can cost over $12,800 per driver annually when fully loaded with risk and overhead.
Compliance Burden and IRS Scrutiny
Managing fringe benefits, verifying insurance, logging mileage: it all becomes harder with more drivers. Tax reporting rules for personal use are complex. Admin teams are stuck juggling risk instead of enabling growth.
A Better Fit for Growth: Reimbursement, Not Ownership
Retailers scaling fast need a vehicle program that flexes with growth, not one that locks in fixed costs and inflexibility.
Why FAVR Reimbursement Works
Reimbursing employees for business use of personal vehicles, especially through an IRS-compliant model like FAVR, lets companies reduce costs, limit liability, and preserve driver satisfaction.
You don’t have to buy cars, insure them, or manage downtime. You just need to support employees with fair, transparent mileage reimbursement that aligns to actual costs.
Field Teams Get More, Not Less
Smart reimbursement models are mobile-friendly, intuitive, and less intrusive than legacy fleet systems; depreciation alone can account for 45% of fleet TCO, turning vehicles into liabilities, not assets.
Retailers Making the Switch Successfully
Real Stories from the Field
At Shaw Industries, a Berkshire Hathaway company with over 600 drivers, multiple pain points triggered change: manual mileage tracking, insurance compliance gaps, and what Evette Wheeler called “honest fraud” or employees unintentionally inflating trips.
“We knew that [our old program] was considered always a black hole when we talk about auditing and couldn’t really justify the spend a lot of times,” Wheeler explains. “We had issues where we wanted to prevent risk. We didn’t have a very good way of keeping up with our insurance compliance.”
After transitioning to Motus, Shaw saw measurable benefits:
- Less administrative burden
- IRS-compliant mileage logs
- Higher team productivity
- Better fraud prevention
- Cost savings
The result? Sales reps were “back in front of the customer,” not stuck entering mileage.
Drivers Appreciate the Shift, Too
Matt Chapman at KC Bobcat admitted to early skepticism about the move to reimbursement. His company faced:
- Insurance premiums and deductibles becoming “unbearable”
- Company liability exposure from driver incidents
- Lack of privacy (they considered cameras but rejected them for personal conversations)
But, within a week of using Motus, that changed.
“All the concerns that we had were out the door right away. After about week one,” Chapman explains. “It was a seamless transition, had no issues at all, and been happy with it. I don’t think we’d ever go back to our old ways now that we have Motus. It’s just been a super easy process and makes everyday life easier.”
What Sets Smooth Transitions Apart
Technology That Actually Works
Drivers want accuracy and control. Chapman praised Motus Smart Trip: “All you do is you put in your business hours. So, if you want to go from 6 am to 6 pm, as soon as you drive, that’s being locked. It’s a super easy and super seamless process. It tracks everywhere you go. You can go in and change your mileage if you go over lunch hour. You switch that over to personal miles versus business miles. You’re able to decipher those in an easy way.”
Change Management That Centers People
Change succeeds when leadership, managers, and drivers all understand the value: cost, compliance, and productivity.
And, it spreads. Wheeler reported that drivers who made the switch started advocating internally:
“We have several that come off of fleet and are begging for Motus. They’ll contact us and say, ‘Hey, get me on Motus now.’”
Is It Time to Rethink Your Vehicle Program?
Ask yourself:
- How much are you spending per driver?
- How much liability do you carry today?
- Could a reimbursement model reduce that exposure and cost?
Ready to take the next step? Talk to a Motus Advisor today!
FAQ
Q: Why don’t company car programs work well for growing brands?
A: Because as brands scale, fleet costs, risk, and complexity increase while flexibility disappears.
Q: What are the hidden costs of company vehicle programs?
A: Insurance, depreciation, downtime, IRS compliance, and 24/7 liability exposure.
Q: How does a reimbursement model work better than company cars?
A: It’s tax-compliant, fair, and scalable, removing ownership risk while preserving mobility for employees.
