Managing a corporate fleet effectively is crucial for businesses that rely on vehicles for their operations. This guide will provide insights into fleet management, mileage tracking, and the importance of gas cards and MVR reports.

What is Fleet Management?

Fleet management refers to the processes and systems used to oversee company-owned vehicles. This includes everything from purchasing and maintaining company vehicles to tracking mileage and fuel consumption.

Optimizing operations and reducing costs requires a set of clear policies for employees. This is often the most difficult aspect of managing company vehicles. Challenges can include personal use of vehicles, unnecessary fuel purchases, and employee-involved accidents. If policies are unclear or not enforced, your organization will face cost control issues and increased risks.

What does fleet mean?

A fleet vehicle is any vehicle owned or leased by a business for commercial use. This can include cars, trucks, vans, and specialized vehicles. Understanding what counts as a company vehicle helps businesses manage their assets and employees well.

Some organizations rely on employees who carry out their jobs using personal vehicles. These personal vehicles do not meet the fleet definition and should be managed in a different way. Organizations that use employee-owned vehicles should pay a mileage reimbursement, car allowance, or FAVR reimbursement to drivers to offset expenses.

Managing the costs of fleet cars

Corporate fleet vehicles cost more than the price of purchase. Owning vehicles comes with an array of costs including depreciation, insurance, maintenance and repairs, and more. Many of these costs are tax deductible as long as management follows IRS-compliant procedures.

Corporate vehicle costs can balloon if employees abuse the perk of a company car, drive recklessly, or use fuel for personal trips. Driver oversight is a key area for reducing costs and keeping the vehicle program sustainable.

To properly manage fleet costs, an organization should have a set of enforceable policies that cover the following:

• Mileage approval
• Safe driving
• Fuel card use
• Personal use

Business mileage tracking

Calculating mileage is a critical aspect of fleet management. Accurate mileage tracking helps businesses monitor vehicle usage, optimize routes, and reduce fuel costs. Recording business mileage is also necessary to substantiate the business use of the vehicle for tax deduction purposes.

IRS mileage log rules

An IRS-compliant mileage report should be timely and record trip information necessary to demonstrate business use. This information should include:

• The date and business purpose of the trip
• Departing location and destination
• Number of miles driven

While many businesses have relied on spreadsheets in the past, it has become more standard to use a mileage tracking app. The process of manually entering trip info can be laborious. Using Google Maps or MapQuest to determine mileage is also time consuming. Automating the process removes a tedious task from employees.

What is the best mileage app?

Utilizing the best mileage tracker app can streamline this process, providing real-time data and insights. A well-designed mobile app adds convenience for drivers, generates accurate reports, and facilitates route optimization and driver coaching. A good mileage app is also necessary for distinguishing between business use and personal use of the vehicle.

The qualities of the best mileage apps include

• Easy-to-use, intuitive interface
• Accurate GPS routing
• Hands-free automatic mileage tracking
• Battery-saving features
• Easy editing of trip information

The best apps come with excellent customer support and an administrative dashboard that streamlines the approval process. A well-designed dashboard will help managers oversee fleet use efficiently.

Try mLog: Mileage Tracking Made Easy

Gas cards for corporate fleet cars

Gas cards are a helpful tool for managing fuel expenses. They allow businesses to control fuel purchases, track spending, and simplify accounting. Giving employees a credit card for gas is simpler than reimbursing receipts for purchases. But fuel cards are also prone to misuse.

Ways to manage fuel card overuse

By placing boundaries around the use of a gas card, you can control fuel costs. The key is to have a clear set of policies and enforce them. Here are some helpful practices to follow when managing a corporate fuel card:

• Limit how much fuel drivers may pump per week without permission.
• Limit which days employees can purchase fuel. (e.g. No Friday fill-ups without permission.)
• Enforce penalties for violations of the policy. 
• Chargeback employees for personal use of fuel.

MVR reports: What you need to know

An MVR report (Motor Vehicle Record report) is a document that provides information about a driver's history. An MVR report will list any violations or accidents. Many businesses understand that reviewing an MVR report can help ensure they are hiring safe drivers. But maintaining a responsible fleet requires regular MVR checks as well.

Regularly reviewing MVR reports can help reduce risks and enhance safety. Performing regular checks of each employee's driving history can provide legal protections as well.

Negligent entrustment of a vehicle

Responsible fleet oversight means ensuring that all drivers operate vehicles safely. If an employee causes an accident, liability can go beyond the insurance claim. The victims may try to prove that the employer has committed negligent entrustment.

What is negligent entrustment? A negligent entrustment lawsuit occurs when a plaintiff believes they can prove that the employer knowingly entrusted the vehicle to a risky driver.

Maintaining an employee with a spotty driving record can point toward negligence on the employer's part. This is why regular MVR checks are so important.

MVR meaning and best practices

The true meaning of a motor vehicle record report lies in the window it provides into driving habits. Responsible fleet managers create systems for regular reviews of driving records and act when a violation appears.

These reviews should occur at least annually. A safer option is to purchase MVR monitoring services. This helps the organization react quickly when an employee gets a ticket or causes a non-work-related accident.

Another key practice: Create a Driver Safety program with a set of interventions for drivers whose records indicate risk. These interventions could include driver education, driver training, and even termination.

Best practices for fleet management

1. Regular Maintenance: Schedule routine maintenance for all company vehicles to prevent breakdowns and extend their lifespan.
2. Driver Training: Provide training for drivers on safe driving practices and efficient fuel usage.
3. Utilize Technology: Implement fleet management software to track mileage, fuel consumption, and vehicle performance.
4. Monitor Expenses: Keep a close eye on fuel and maintenance costs to identify areas for improvement.
5. Personal Use Policy: Create clear rules about personal use of the vehicle. Charge employees for any personal use.

Transitioning from a company fleet to mileage reimbursement

With vehicle expenses skyrocketing, some organizations may decide to transition away from some or all their fleet. This can be a challenge because employees love getting to drive a company car. A company car is a great perk and a way to attract great workers.

But the expenses associated with company vehicles may require a shift to a more sustainable program. Alternatives include a car allowance, mileage reimbursement, or FAVR vehicle program. To learn more about how to select the best alternative and transition well, read our guide.