If you’re an entrepreneur, it’s often a tough decision and considerable expense to begin building a business fleet of vehicles that your employees drive. In fact, some small businesses instead stay far away from the chaos and stick to mileage reimbursement for employee cars used for business instead. There are pros and cons to each arrangement.
Business fleets are more expensive to build up front. You’ll have the capital investment of the vehicles and be responsible for ongoing effort and other ancillary costs involved. If your business fleet includes trucks or cars in fairly basic packages, you can get some exceptional pricing if you’re buying several at one time. You can research potential types of fleet vehicles and estimate their sticker prices online at Cars.com. It will be reliant on you as a business to keep each fleet vehicle in safe working order for the safety and security of your employees driving the vehicles. Fleet vehicles that include company decals or vinyl wraps can also serve as constantly moving advertisements for small businesses that might have even smaller marketing budgets.
Mileage reimbursement doesn’t carry any capital investment by a small business. You’ll have to depend on your employees to produce monthly mileage reports and trust that those reports are an accurate understanding of their driving for reasons related to your business. You’ll also have to have someone on staff to keep track of these driving logs and arrange reimbursement for employees in a timely manner. The Internal Revenue Service publishes an accepted mileage rate for employee reimbursement which can fluctuate somewhat by location. This figure doesn’t just cover the cost of fuel, but also includes a small stipend for ongoing vehicle maintenance.