Remove Your Fleet to Maximize Cost Control and Reduce Risk
Explore the impact of transitioning from company cars to personalized, tax-free reimbursements.
The price of gas. The cost of maintenance. The expense of repairs. With inflation impacting nearly all costs related to owning and operating a car, fleets have become increasingly unaffordable to maintain. Companies are considering alternatives like the Fixed and Variable Rate (FAVR) program. With a FAVR program, companies reimburse employees for the business use of their personal vehicle specific to their location. This tax-free reimbursement can prevent cost overruns, reduce the liability risks, and provide employees with the flexibility of driving the vehicle of their choice.
Watch this video series and learn from the voice of top business leaders about their experience transitioning out of company cars and into tax-free vehicle reimbursements.
Why Companies Are Getting Out of Fleet
With a fleet program, your company assumes 100% liability, no matter who's behind the wheel during non-business hours.
On average, accident repairs make up 14% of total fleet costs1. With fatal car accident costs averaging $754,382.2
1. 2021 Automotive Fleet Factbook
2. NETS Cost of Motor Vehicle Crashes to Employers 2019
It's no surprise to anyone that fleets are the most expensive vehicle program with high maintenance and idle vehicle/disposal costs.
Motus customers that have transitioned out of company cars were looking for a “win-win” program that benefitted both their mobile workers and the company itself. Besides cost savings, employee satisfaction, IRS compliance and risk and liability reduction were a significant motivator to transition.
But what about employee satisfaction and flexibility? Many companies that provide fleet vehicles for their workforce do so even when the job requires no specialty vehicle thinking of it as a perk of their position.
However, more often than not, employees prefer their personal vehicles. Fleet vehicles don’t allow for the freedom of choice employees appreciate with the personal vehicle they drive every day.
FAVR Explained
The Cost-Effective and Compliant Alternative
FAVR is the only IRS-recommended methodology because it accounts for both the fixed and variable costs of owning and operating a vehicle in the driver’s location:
- Fixed costs are constant month over month but vary from employee to employee due to factors such as vehicle type, miles driven and geography. They include insurance premiums, license and registration fees, taxes and depreciation.
- Variable costs vary month over month and are based on number of business miles driven and geography. They include gas, oil, maintenance and tire wear.
Fleet-to-FAVR Transitions in Real Life
Our customers' transitions have resulted in a win-win strategy for both company and employees:
- Significant ROI and IRS compliance with accurate mileage reporting.
- High employee engagement with cost neutral approach: incentive can be offered to join the program.
- Employees really enjoy their freedom of choice and are more likely to take care of specialty vehicle now.
Flint Group is a leading global supplier of packaging and commercial ink with over 140 locations worldwide, and approximately 200 mobile employees comprised of sales representatives and technical specialists across
the U.S. and Canada.
Results from their fleet transition:
- 7-figures of cost savings in less than a year.
- Ease of use with customizable app.
- Time savings from less administrative work.
- Streamlined implementation process.
"We're feeling better than ever. What constitutes a business mile really wasn't being followed previously. The
software that Motus provides and the user interface makes it so easy for employees to be compliant, and it helps us improve our reporting as well" — Corporate Controller, Flint Group, on IRS compliance
Innovation in Action
Our best-in-class software is built from fully automated proprietary algorithms that anticipate needs and recommend accurate reimbursement methods
Ready to Make the Switch?
If you're interested in a financial analysis or would like to explore what a FAVR program could do for your business, contact us through the form below.