Looking Under the Hood at Traditional Vehicle Programs

A SAP Concur series article analyzes vehicle program risks for high-mileage drivers. Drivers logging more than 5,000 reimbursable miles annually create exposures including vicarious liability, tax issues, mileage fraud, volatile fuel prices and employee dissatisfaction. It compares three common approaches: flat car allowance (predictable but taxable and unrelated to actual mileage), cents-per-mile reimbursement (insufficient for low-mileage drivers, excessive for high-mileage drivers, with fraud potential), and fleet vehicles (company assumes 24-hour risk, with accident rates as high as three times the U.S. national average). A follow-up will cover the fixed and variable rate (FAVR) approac…