Most company car programs weren’t built last year. They were set up years ago, renewed with each lease cycle, and handed from one leader to the next. Along the way, they rarely get measured against their full cost.
That’s not a criticism. Company cars serve a clear purpose, and for some roles, they’re still the right fitolve real problems, and for some roles they’re still the right call. But when the only number on the dashboard is the monthly lease payment, it’s easy to miss what sits around it: repairs, accident claims, and the corporate liability exposure that comes with owning or leasing the vehicles your employees drive every day.
A recent independent study from Aon Global Risk Consulting put real numbers to that gap. Here’s what it found, and how to run the same calculation on your own program.
The short answer: An independent 36-month Aon analysis of one employer found its leased company car program averaged $10,589 per driver per year, compared with $8,792 for FAVR, a 17% difference. The result is specific to that employer, but this is a story we see time and time again. It shows why finance teams should look at lease costs, repairs, liability claims, and administration together before deciding which drivers still need company cars.
What the lease payment leaves out
The lease is the most visible line in a company car budget, so it’s usually the one that gets compared. But the full cost of a company car program spreads across several budgets and owners:
- Repairs and maintenance: Wear and tear, mechanical issues, and accident damage land on top of the lease.
- Accident claims: Company-owned or leased vehicles create 24/7 corporate liability exposure, including when employees use them outside work hours.
- Administration: Someone has to manage renewals, assignments, fuel cards, personal use chargebacks, and turn-ins.
- Lease incentives: Rebates and introductory pricing can make a program look cheaper than it will be once they expire.
None of these show up in a side-by-side lease quote. That’s why the full calculation matters.
What the Aon study found
Motus engaged Aon Global Risk Consulting to review 36 months of actual cost data (FY23 to FY25) at one large employer with more than 8,000 employees. The employer runs both a leased company car program and a Fixed and Variable Rate (FAVR) reimbursement program. Drivers in both programs work in sales and service, drive sedans and SUVs, and average about 15,500 business miles a year.
That setup matters. It’s not a model or a projection. It’s the same company, similar roles, and similar driving, measured side by side.
For one employer, FAVR cost 17% less per driver per year
Over the three years, the company car program averaged $10,589 per driver per year, even after a leasing rebate. FAVR averaged $8,792. That’s $1,797 less per driver, every year.
Annual cost per driver (USD) in Aon’s 36-month analysis of one employer
| Fiscal year | Company car program (incl. rebate) | FAVR |
| FY23 | $10,928 | $8,993 |
| FY24 | $9,918 | $8,715 |
| FY25 | $10,921 | $8,667 |
Source: Aon Global Risk Consulting, Employer Vehicle Program Study
FAVR came in lower in every year analyzed. And while lease costs swung from year to year, FAVR costs per driver went down each year.
The gap is wider without the rebate
The fleet vendor offered a temporary rebate on new leases that only applied during the first three years of the arrangement. Remove it, and FAVR cost 20% less, or $2,144 per driver per year. If your own program’s pricing leans on an introductory incentive, it’s worth knowing what happens when it ends.
The company car program’s repairs topped $1 million every year
For the company car program, repair costs sat on top of the lease payment and exceeded $1 million in each of the three years.
Liability looked very different
The employer paid accident liability costs for its company car program every year, including more than $700,000 in FY23 and more than $1 million in FY24. The average claim cost $12,617, and the largest single incident, about $480,000, was still open when Aon completed its analysis.
Under FAVR, the employer reported no employer-retained liability costs across the full study period. Because employees in a FAVR program own and insure their vehicles, the program can reduce the 24/7 corporate liability exposure that comes with company-owned or leased vehicles. Claims that exceed an employee’s coverage can still reach the employer, which is why insurance requirements and year-round insurance monitoring belong in any personal vehicle reimbursement program.
How to run the calculation on your own program
You don’t need a consulting engagement to start. Most of the inputs already live somewhere in your business. They’re just spread across finance, risk, and operations.
- Count your active drivers. Use average monthly active drivers so turnover and open seats don’t skew the per-driver math.
- Pull lease and depreciation costs. Note any rebates or introductory pricing and when they expire.
- Add repairs and maintenance. Include accident damage and anything paid outside the lease agreement.
- Add employer-retained claims and liability costs. Your risk or insurance team will have these, including open claims.
- Estimate administrative time. Count the hours spent on assignments, renewals, fuel cards, personal use chargebacks, and turn-ins.
- Divide by drivers, then compare year over year. One year can mislead. Three years shows the trend.
Once you have a true per-driver cost, you can compare it fairly against a personal vehicle reimbursement program built on your drivers’ actual mileage, locations, and vehicle costs.
Where FAVR fits, and where company cars still make sense
FAVR reimburses employees for the cost of business driving using their own vehicles. Rates reflect the real costs of owning and operating a vehicle where each employee lives and works, so reimbursement aligns to actual driving behavior. That’s what improves cost control and fairness at the same time.
FAVR tends to fit best for employees who drive 5,000 or more business miles a year, especially across multiple locations. Qualifying FAVR reimbursement payments can also be tax-free when the program and driver meet IRS requirements, but the bigger shift for most companies is moving from owning vehicles to reimbursing their use.
That doesn’t mean every company car has to go. Specialty vehicles, very high-mileage roles, and some operational needs may still call for company-provided vehicles. Many organizations move some drivers to personal vehicle reimbursement and keep others in a company car program. Either way, risk mitigation tools like continuous Motor Vehicle Record (MVR) monitoring and driver safety training apply to any employee who drives for work.
The goal isn’t to pick a winner. It’s to know what each option really costs so you can choose the right mix for your teams.
See how your company car costs compare
In the past two years, Motus has helped more than 150 companies move more than 15,000 drivers from company cars to personal vehicle reimbursement. Motus cost data has also underpinned the IRS standard business mileage rate since 1983.
If you’re ready to run the numbers on your own program, start with the full Aon study, then talk to a Motus expert about what a FAVR program could look like for your team.
Download the full Aon study | Talk to a Motus expert
Frequently asked questions
What’s the real cost of a company car?
The true cost includes the lease or purchase price plus repairs, maintenance, employer-retained accident claims, and administrative time. In Aon’s study of one large employer, the leased company car program averaged $10,589 per driver per year after a leasing rebate.
Is FAVR cheaper than a company car program?
In the Aon study, FAVR cost 17% less per driver per year than the leased company car program, and 20% less without a temporary leasing rebate. Results vary by employer, mileage, and location.
Does FAVR reduce corporate liability exposure?
It can reduce, but not eliminate, corporate liability exposure. Under FAVR, employees own and insure their vehicles, which reduces the 24/7 exposure that comes with company-owned or leased vehicles. Claims above an employee’s coverage can still reach the employer, so insurance requirements and year-round insurance monitoring are important parts of the program.
Do we have to move every driver off company cars?
No. Many organizations move some or all drivers to personal vehicle reimbursement and keep company cars for specialty vehicles or roles that need them.
