What is a fleet vehicle? | Pros and cons of company fleet vehicles (2024)

A fleet vehicle is any motorised asset owned by a company to transport people and products, conduct business or assist with daily activity. Vehicle fleets are often used for delivery services, or they can be assigned to employees in sales or other occupations that require a lot of travel throughout the day.

A vehicle fleet can range from a group of service vans, rental cars, and taxicabs to a group of bulldozers and tractors. Broadly speaking, fleet vehicles are cars, trucks, or other automobiles owned by a business or organization for official use.

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The pros of having fleet vehicles

Efficient operations

A well-maintained fleet of vehicles can be critical for business. Companies can rely on it to make deliveries or complete jobs on time without having to worry about public transport strikes or delays. It also allows the company to handle customer queries with personal contact with the customers.

Branding opportunity

Any fleet vehicle can be branded. Driving a corporate fleet vehicle can increase business visibility. It will help to gain more exposure of the brand on the road making the customers more likely to trust the brand by advertising on the side of the vehicles.

Employee perk

Employees usually perceive a corporate fleet vehicle as a perk. Employees log expense mileage if they use personal cars when they finish their drives that are reimbursed. Fleet vehicles usually reduce the employee log work. The business pays for the gas and tracks mileage and the employee doesn’t have to worry about depreciation.

The cons of having fleet vehicles

More liability

Corporate fleet vehicles will make the business liable if something happens to the employee while he or she is driving a corporate fleet vehicle. Insurance can protect the business against legal action. Insurance cost is an additional liability. The corporate fleet vehicles are also high-maintenance and depreciate over time. Your fleet vehicle will be on the road often so frequent tune-ups or repairs are required. Additionally, maintenance has its limitations even if you take good care of the car.

Expensive investment

A vehicle fleet is an investment. Your business must have a solid cash flow to add it to its assets. The initial cost of buying the vehicles is high. You will also likely take a loss if you sell fleet vehicles in the future due to depreciation.

More paperwork

Even if you own a single fleet vehicle, your administrative workload will increase, and you will need to manage the maintenance, insurance, and tax filings. You may need additional staff or time to manage this and if you own a small business the vehicle may be underutilised with infrequent usage.

Businesses that make use of fleet vehicles

In general, any small or large business can own a fleet vehicle. Industries that commonly use fleet vehicles include catering, delivery and transportation, home services, construction, hospitals, equipment dealers, pharmaceuticals, and public services.