The Pros and Cons of Offering a Company Car to Your Employees

When it comes to attracting top talent in the workforce, employers offer a variety of incentives to woo prospective employees. One such incentive that has gained popularity over the years is the option of providing a company car. While this perk might seem enticing, it is important to weigh the pros and cons of offering a company car to your employees before making a decision. Here, we take you through the advantages and disadvantages of this employee benefit.

The Pros

1. Attracting Talent: One of the most significant advantages of providing a company car is that it can be a great incentive for attracting talent in the workforce. Offering a company car can be a deal-breaker for some employees who desire the convenience of having a vehicle provided by their employer. 2. Increased Mobility: Providing a company car can help employees get around for work-related duties, especially if they need to travel to different job sites. This leads to increased efficiency since they can attend to more tasks within a shorter timeframe. 3. Enhanced Productivity: Offering a company car can also help improve employees' productivity because they do not have to worry about the costs of maintaining their personal vehicles. This, in turn, can lead to increased job satisfaction and employee morale. 4. Tax Benefits: Employers can take advantage of tax benefits in offering company cars since they can write off the cost of purchasing or leasing the vehicle as an expense. Additionally, employees may also receive tax breaks since the vehicle is technically part of their compensation package.

The Cons

1. High Expense: Providing a company car can be a significant expense for the employer, especially if the company has several eligible employees who require vehicles. The cost of purchasing or leasing vehicles can add up quickly, making this perk unsuitable for small businesses. 2. Maintenance Costs: Beyond the initial purchase or lease cost, companies must also budget for vehicle maintenance and repairs, which can be quite expensive over time. This includes regular maintenance such as oil changes, tire rotations, and more significant repairs like engine replacements. 3. Potential Liability: Employers are responsible for any damages or accidents that occur while an employee is operating a company car. This can lead to potential lawsuits and other legal disputes, making it vital to have a comprehensive insurance policy to cover any mishaps. 4. Limited Personal Use: Many companies have policies that stipulate when and how employees may use their company cars, which can restrict personal use. For some individuals, this may be an issue since they may prefer the increased flexibility of having a personal vehicle that they can use for their own needs.


Offering a company car to employees can be a great way to attract top talent and increase employee productivity. However, it is crucial to consider the costs and potential liabilities associated with this perk. Employers should weigh the pros and cons before deciding whether or not to offer a company car to their employees. Ultimately, it depends on the company's budget, workforce, and policies.