Fringe benefits with dynamism: corporate car sharing as a business option

Is your company looking for a way of rewarding employees? Ensure that your team starts the day with the right energy and makes the perfect first impression when representing your brand in an external business meeting. Especially for employees whose job involves constant movement, providing the perfect means of transportation will be the ideal perk. Here we explore the benefits that companies have in offering fringe benefits for their employees. We explore three different modalities that your company can use to provide a fringe benefit company car.

1. What are fringe benefits, and why should companies reward their employees?
2. Injecting dynamism into your business with company cars for employees
3. Modalities of a fringe benefit company car: employee vehicle allowance, company cars for employees, and corporate car rental
4. SIXT premium service
5. Summing up

1. What are fringe benefits, and why should companies reward their employees?

Companies are finding exciting new ways of improving the satisfaction and working conditions of their employees. In a competitive job market, these extra perks have a big impact. They can be the decisive determinant of getting that much sought-after specialist in your team or ensuring the loyalty of your most talented employees. These extra services that employees receive in addition to their wages are called fringe benefits. They can include employee vehicle allowances, memberships to clubs or gyms, healthcare programs, company cars for employees, meals and beverages at work, the possibility to work from home, and many more.

“Fringe benefits are forms of supplementary compensation that can provide mutual advantages to both the employers and employees in terms of increased productivity, job satisfaction, and improved standard of living”.

There is the common misconception that employee benefits started in the US as a response of companies to the hardships of rationing during World War II (for example, by providing healthcare programs or defined contribution plans). However, according to a recount made by the University of Villanova, fringe benefits in the United States actually date back to 1875, when the American Express railroad company offered the first employee pension program as an additional benefit for their employees. With this program, they intended to attract workers (since most of the workforce was still concentrated in agriculture), offer a sense of job security, and incentivize their stay in the company.

Several studies have been made to understand the importance of fringe benefits and their impact on employee satisfaction and performance. The evidence is clear-cut: The Harvard Business Review presented the results of the Employment Confidence Survey, in which 60% of the people reported that fringe benefits are a major factor when facing the decision to take a job offer. 80% of the respondents even said that they would choose additional benefits over a pay raise. Moreover, a study made on the National Longitudinal Survey of Youth showed a statistically significant positive effect of fringe benefits on job satisfaction. This is especially interesting for companies since “higher levels of worker job satisfaction, potentially resulting from fringe benefit provisions, have been linked to important productivity measures such as lower quit rates and absenteeism.”

2. Injecting dynamism into your business with company cars for employees

One of the most highly estimated perks is having companies offer premium forms of transportation for business trips. Whether through an employee vehicle allowance or physical company cars for employees, vehicles are traditionally seen as one of the most convenient services a company can offer.

Some statistics make this preference quite clear. According to a study focused on understanding the impact of company cars on satisfaction, 64% of the respondents reported they would be less likely to leave their current job due to their company’s car company program. When asked about their reasons, the respondents mentioned preferring company vehicles to avoid costs in wear-and-tear, maintenance, insurance, and fuel. They also mentioned their expectation of having newer vehicles than their own and the ease of having everything managed for them in terms of insurance and other paperwork.

3. Modalities of a fringe benefit company car: employee vehicle allowance, company cars for employees, and corporate car rental

There are different ways for companies to offer fringe benefit company cars to their employees. Here we introduce the three most common ones and explore their pros and cons.

Company fleet

Some companies opt for purchasing or leasing, and maintaining a company fleet. Employees are then assigned a car that they can use on their business trips. Compared to employee vehicle allowance, this option is usually more attractive for employees since they get a full perk without any cost or trouble. However, keeping a company fleet is only realistic for companies of a certain size. The full costs of acquisition or leasing, as well as all the insurances, are paid by the company. Any necessary maintenance or repairment need to be managed by the company. It is also important to note that if the car is offered to a single employee, it is necessary to keep a mileage logbook since company cars are treated as a taxable non-cash benefit, which makes them subject to income tax obligations.

Employee vehicle allowance

A widespread alternative to company cars is a car allowance for employees in the form of mileage reimbursements, as companies choose to support their employees through a monetary compensation intended to (partially) cover the mileage expenses of using their own vehicle for work.

Corporate car rental

A very effective alternative to employee vehicle allowances is for companies to rent vehicles from special rental agencies. Many companies find this to be an ideal compromise since their employees get vehicles that perfectly fit their needs without the associated acquisition costs. Moreover, the car rental agency covers the maintenance and repair costs. The quality of the vehicle and the ease of the rental service will be strongly dependent on the chosen rental agency.

4. SIXT premium service to give your employees a real treat

Our SIXT Corporate division has years of experience helping the most varied companies easily solve their transportation needs. We use the insights from all these interactions to create flexible and efficient car rental programs that accommodate any need. This means that no matter the size or terrain, your company will be able to set up the ideal system to provide company cars for employees. We know that companies profit from new mobility models that are based on only paying for the service your company needs and having conditions that allow your employees to respond to changing environments quickly.

Some of the benefits that make SIXT ideal for your fringe benefit company car program:

• Premium fleet
• State-of-the-art system to facilitate the rental system
• Motivation of employees with premium car brands
• Flexible long-term rental conditions
• Worldwide service
• 24/7 customer service

Imagine your employees’ satisfaction from knowing that a premium model will be waiting for them wherever their business calls. They can enjoy additional perks like using our VIP lounges in the most important airports and our state-of-the-art picking-up and delivery services to make these processes as efficient as possible. Is there a sudden change of plans? In our long-term rental plans, your employees can change the vehicle and location without any bureaucratic hassle. They will also enjoy premium services with our wide network of partners like staying in the best hotels our discounts on top brands. At SIXT, we help you empower your employees to take your business to the next level.

Summing up

In a competitive job market, fringe benefits are crucial for attracting and retaining the most talented employees. Providing a company car is one of the most highly estimated perks that a company can offer. Around 64% of the people that enjoyed the benefit of having a company car reported they were less likely to leave their current job because of the company car program.