Company Cars

• Larger businesses, whose operations involve a good bit of travel, frequently buy or lease fleets of company vehicles to provide to employees. This way they can not only purchase the vehicles cheaper but having a centralized maintenance facility creates significant savings in repairs. Some companies allow employees to use company vehicles for personal use, others do not or limit it, and a number have a policy where the employee pays for the gas when the vehicle is used for personal business.
  
  

Monthly or Annual Car Allowance

• A monthly car allowance is probably the most typical arrangement for a salesperson with a small to medium-sized business who does a lot of work-related driving. The amounts paid vary a great deal, as obviously a salesman that has to cover a 500-mile territory will do a lot more driving than one based in a city. However, based on a June 2010 survey conducted by PMMI, monthly car allowances for salespersons ranged from $300 to $650. A survey conducted by World at Work reported $500 as the median for employee car allowances in 2008.
  
  

Mileage Reimbursement

• Some companies choose to reimburse employees for the use of their personal vehicles for work on the basis of mileage driven. Employees typically submit an invoice at the end of the month and are reimbursed the next pay period. The IRS establishes a standard mileage rate to calculate the deductible cost of business miles driven, and the standard mileage rate is 51 cents a mile in 2011. However, companies are not required to use the IRS standard mileage rate to reimburse their employees, and some calculate their own reimbursement rates. Most companies have a monthly cap on mileage reimbursement.
  
  

Reimbursement for Gas and Other Expenses

• Employees that drive a lot are issued a company credit card or reimbursed for gas expenses in most businesses. Typically, businesses that offer a company car or a monthly allowance do pay for gas, but the cost of gas is already included in most cases of mileage reimbursement. Businesses also pay the insurance and maintenance costs associated with company vehicles, but in most cases you are expected to pay your own insurance and maintenance costs when you are given a monthly car allowance.