No More Company Cars

I’ll admit, I hate the idea of company cars. They’re a royal pain in the ass and they cause a lot of problems and strife within a company.

One thing I did whenever I started in any new leadership role at a company was to eliminate the company cars completely.

After all, we were in the manufacturing business, we weren’t in the car business.

You know how people say “Starbucks isn’t in the coffee business, or McDonald’s isn’t in the hamburger business, they’re in the real estate business?”

I didn’t want that to be us. I didn’t want any of our resources going toward managing a fleet of company cars. I didn’t want any of our staff dealing with the headaches of insurance, maintenance, oil changes, or renewing leases and making car payments.

Given the number of company cars we had or could have had, that could have easily been one person’s job or even two. Not to mention all of the costs and time spent dealing with the cars’ upkeep was a huge waste.

There were also a lot of egos involved in having a company car.

I heard a lot of “I’m better/higher up than X, so I should have a company car” or “I should have a better car.”

If a VP had a company car, but a lowly salesperson had a newer car, I would hear, “I should have a newer/better car than that salesperson.”

Why? Because getting a higher salary and a private office wasn’t enough of a perk? You need to lord your sense of self-importance over other people by having a newer car, let alone tie your ego to a material item?

Overcompensate much?

Instead, what I did was provide people with a car allowance, and they were free to buy any damn car they wanted.

Overall, that went very well because it solved a lot of problems. For one thing, we got out of the fleet car business.

For another, it satisfied the egomaniacs while still letting everyone else do their job.

It put the responsibility on the car owner to keep it up, pay for the insurance, maintenance, and make the lease payments.

The people who were humble about their cars and didn’t have to stroke their own egos actually made money on the deal.

But the people who had to feed their egos ended up having to subsidize their cars. Having an ego cost them more money.

Of course, that’s what fancy cars do anyway, but you still get from point A to point B in the same amount of time. There aren’t any special roads you get to drive on that no one else does.

The allowance covered everything, and it was fundamentally the same as having a company car. In fact, it cost us roughly the same amount of money it would have cost to have the fleet, but we didn’t have to put staff resources into managing everything.

But if you wanted to exercise your preferences and get some extras for the car, you had to pay for them.

The allowance was weekly, and it was added to their paycheck. The money ended up being a wash for everyone because the extra money was taxable, but a company car is also a taxable benefit.

Plus, we paid for the consumable expenses, like gas and oil changes.

The only rule was, the vehicle couldn’t be more than three years old, because after three years, major things start going wrong with the car. So people could trade in or upgrade, but most of them ended up leasing anyway.

Finally, they all had to keep their cars clean and presentable. If I ever got into anybody’s car and it was a pigsty, they got a royal rollicking for it. People had to have some sense of self-responsibility after all.

I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business, including pivoting within their industry. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.

Photo credit: CoolCaesar (Wikimedia Commons, Creative Commons 3.0)