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12+ Car Usage Policy Templates : Guidelines For Using Company Cars & Personal Cars for Office

Many comThe template below helps business and organizations define and create a Company Car Policy template. This template provides different sections that the policy should include and also gives sample guideline statements for each section.

Policy Elements

This section covers the crux of the policy. The policy elements section should address the core principles and guidelines of the policy. The organization can decide to break the policy elements into various sub-sections for increased readability and understanding.

For a company car policy template, two major policy sub-sections are Company Car Usage Policy and Company Car Allowance Policy.

Company Car Usage Policy

This section addresses only those employees who are given access to company-owned cars.

General Guidelines:

  • Company-owned cars are provided solely for business activities and should not be used for any other purposes.
  • The company owned vehicles are not to be considered as a part of employee compensation unless explicitly specified.
  • The company reserves the right to assign or even revoke the availability of company-owned cars for all employees.
  • Any employee who wishes to avail a company owned car should discuss with the relevant supervisor or HR and submit an application request as per the company process.

Eligibility: This section should provide guidelines which establish the eligibility of the employee for access to company-owned cars. This includes both the company eligibility criteria as well as government-mandated driving criteria. A few guidelines statements that ca company can include are as follows:

Company Eligibility Criteria:

  • The concerned individual should be a permanent employee of the company.
  • The concerned individual can be eligible for company-owned cars only if the department head and HR department or any other relevant authority have approved the application.
  • The concerned individual should have at least 5 years of experience working for the company.
  • The concerned individual should belong to a specific seniority band level.
  • The concerned individual needs to travel at least X amount of Kms per year to meet with the necessary vendors, clients or partners.
  • The company would provide cars to employees whose job necessary involves traveling on company’s behalf as a part of their job duties. (e.g., delivery executives)

Government Mandated Driving Criteria:

  • The concerned individual should be more than 21 years of age.
  • The concerned individual should possess a valid automobile driving license from a registered government authority issued for the relevant geographic region.
  • The concerned individual should have a clean driving record without any registered driving rule violations for at least X years. This involves no accidents, no driving under alcohol or drug influence and no arrests.

Employee Obligations: This section should provide specific instructions and guidelines for the drivers on behalf of the company. It is the company’s responsibility to ensure that the eligible employees understand the driver obligations for company-owned cars.

  • The eligible employees should ensure that they comply with all the driving and motor safety regulations as dictated by the state and government authorities.
  • The eligible company employees are not allowed to use the company-owned car for any personal or family occasions.
  • The eligible employees are not allowed to take the car outside the city without prior permissions.
  • The eligible employees should always ensure that they are not driving under any influence of drugs, alcohol or medications.
  • The eligible employees should not smoke, drink or eat inside the company-owned car.
  • The eligible employees are not allowed to lend, sell or lease the company owned cars.
  • The eligible employees should not allow any unauthorized individual to use or drive the company-owned car for any other purposes.

Company Obligations:

  • The company provides insurance for the cars from a reputed insurance provider.

Expenses and Reimbursements: This section should cover all guidelines related to expenses for the company owned cars and the concerned reimbursements for the employees.  

  • The eligible employees should ensure proper maintenance and care for the company owned vehicles. However, in case of any irregularities, it is the employee’s responsibility to inform the concerned company department immediately.
  • penses such as fuel, vehicle-part failure, servicing, and others.
  • The employees should then submit the relevant expense claims to the concerned company department for reimbursement.
  • The company representatives would review the claims and process it as per their discretion and the genuineness of the claim.

Accidents: This section should describe the guidelines related to the issues that arise when the company owned cars, and eligible employees are involved in an accident.

  • The employees are instructed to immediately contact the concerned point of contact in case they are involved in an accident.
  • Employees are strictly instructed to refrain from making payments or accepting payments from the third party without company authorization.
  • The company would settle the expenses by consulting the concerned company insurance provider, and the terms agreed with the employee before-hand.

Special Provisions: This section should talk about any special needs and requirements related to company-owned cars.

  • For specially-abled employees, the company would make provisions for specially designed cars and dedicated parking spaces.
  • The employees are eligible for a company provided driver/chauffer only if there is a specific and valid requirement by the employee.

Disciplinary Consequences: This section should talk about the disciplinary actions that are taken by the company when the employees fail to follow the policy guidelines.

  • When the employees fail to follow company policy guidelines, the company categorizes them as minor offenses and major offenses.
  • Minor offenses include instances such as allowing an unauthorized individual to drive the company cars and other similar instances. Major offenses include driving under the influence, selling company car for personal gain and other similar instances.
  • For minor offenses, the company issues reprimands and warnings for the first two instances. If there is a third instance, then the company may revoke the employee eligibility for company-owned cars.
  • For major offenses, the company may take legal action against the employee or even go to the extent of terminating the employment of the concerned employee. The action depends on the severity of the situation.

Company Car Allowance Policy

In certain situations, instead of providing a company-owned car, the organization may decide to provide a specific amount of monthly allowance to its employees to cover for their business-specific travel needs. The company car allowance policy provides the organizational guidelines for the same.

Allowance Eligibility: This section should provide guidelines on the eligibility criteria, basis which the car allowance for the employees would be decided.

  • The employee should be a full-time employee of the company. The part-time employees, contract-based workers or any third party worker is not eligible for the car allowance.
  • The employee should provide relevant proof that they own or have leased a private car which they use for both business and private purposes.

Allowance Amount: Some employers also structure the allowance so that it becomes tax-friendly for both the employers as well as the employees.

  • The company primarily considers the type of car (engine capacity, mileage, and other relevant parameters), the average distance traveled as well as the seniority of the employee to arrive at the allowance amount.

Company Obligations: This section should talk about all the things that the company is and is not responsible for when it comes to employee car allowance.

  • The company is not responsible for paying for any damages, fines or maintenance related activities for the employee’s private car.
  • The company shall pay the pre-decided fixed amount of monthly car allowance to the employee as a part of their salary component.
  • The company shall review the monthly car allowance for each employee every 6 months or annually based on company processes.

The template above provides a comprehensive guide for creating a Company Car Policy Template for any business organization. It includes the necessary sections and example guidelines that can provide a solid direction and help the policy-makers in drafting an efficient Company Car Policy.

Purpose and Overview

This section should describe the reason for existence for this policy. The organization should talk about the overarching goals of this policy and how it benefits and adds value to the employees and the business. The subsequent paragraph shows a sample write-up for this section.

In order to support and facilitate the organization’s business activities, the company either provides or gives appropriate compensation or car travel allowance. The Company Car Policy mentioned in the subsequent sections is aimed to provide guidelines for the appropriate use of the company car usage and allowance.


This section should address the employees to whom this policy is applicable.

Additionally, the policy is also addressed to all employees who might be eligible for a company-owned car in the future.

e scope of this policy should also include all the employees eligible for getting car allowances.

However, the policymakers should understand that this policy template is meant to provide general guidelines and should be used only as a reference. This template may not take into account any specific laws or issues which might be extremely relevant to your company. Hence, the policymakers are urged to use this template as a foundation and customize it specific to their company needs.

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