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Build a European Car Policy (part 2): Yes, it is possible !
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 Yes it is possible to build a European car policy! But, as you already know, it is not simple…So here are some hints and guidelines to support the initiative.
Before we look at how to build such a document, it is important to know that the initiative can only become reality if Finance and Human Resources directors succeed to translate their antagonist objectives into a shared ultimate goal.
Human Resource directors mostly push for a maximum free choice policy of nice cars to keep employee motivation at the highest levels and maintain an attractive recruitment advantage.
Finance directors, driven by cost decrease and cost control objectives, mostly consider fleet in terms of restricted policy, limited brands, models and engine types for reduced cost.
On top of this situation, countries and Headquarters need to share a common view about what should be included in the European document (core guidelines) and what should remain local.
Considering these above mentioned elements, policy harmonisation is possible only if Human Resource directors understand the financial targets and if Finance directors are sensitive to some fundamental Human Resource concerns , both parties supported by an International purchasing team taking into consideration local reality to build a coherent International strategy.
Building a European car policy
A European Car Policy is built around a core content structure with standard headlines but subdivided into three levels of rules. The previous article covered the Rules without local addition, including Optional equipment, Car usage and Drugs and the Rules with local addition, including Car Allowance, Fines, Maintenance and Repair, Petrol Card, Mobile phones, Accidents and Insurance.
This article will cover the last part “rules with local intervention”, including Brands & Models, Foreign use of the company car, End of eligibility and Private use taxation.
Brands
Car Selection
The car policy needs to start by stating that the type of vehicle available to the drivers is be dependent on both the level (band, grade,…) and the country specific vehicle list.
Furthermore, the document should inform who is responsible for the car policy (HR, Sales, Territory Leaders,…).
Where companies will either opt for the brand-model option, budget option or a mix of both, typically car policies also mention which models the policy does not allow (e.g. coupe or convertible models, 2 seat, 2 door,…)
For the brand-model option, the car policy will have to clearly mention the names of the auto Manufacturers but also the potential local restrictions and refer to country-specific appendices for details.
The final choice of brands - models need to be made available to the drivers through well detailed descriptions in the local car policy and clear definitions in employment contracts.
The car policy document should not forget to declare that the company reviews the vehicles on the list regularly to ensure cost effectiveness and market competitiveness.
Concerning the Trading Up alternative, the document should explicitly mention if possible or not and if possible what the limits are (brand-models, budget).
The same should apply for the Trading Down alternative (possible or not) and if possible what the implications are (e.g. no salary adjustment will be made for the difference in car value).
Foreign use of the company car
It is imperative for the car policy document to state that any stay abroad with the company car should be limited to the normal duration of a business trip (or holiday).
It is equally important to also mention that the driver should pay for any expenses relating to private reasons while driving abroad.
Typically, when scheduling to drive the car outside the European Union, the driver / employee should notify the fleet coordinator in order to expand the insurance or break –down assistance coverage, before traveling starts.
End of eligibility
The “end of eligibility” should address in priority the following topics.
Contract termination
In this section, the car policy document should restate that the company may re-negotiate or terminate the Employee's eligibility for a company car following an appropriate pre-defined notice.
Lease/ Rental termination
In this section, the document should describe the process to follow at the end of the lease contract or when returning a temporary rental car. The basic steps typically considered are the delivery of the car at the date and time agreed, the pre-check by the driver of the returned car (especially keys and car documents, condition of the vehicle and personal items) and the scheduling of an appointment to return the car to the pre-defined person / company.
Withdrawal
It is also possible to foresee additional situations where a withdrawal of the company car can apply such as medical condition or treatment which prohibits driving, extended unpaid leave, given by permission of the Company, violation of the Company Car policy and conditions of use, or convictions for careless driving, excessive number of accidents or disqualification, drivers license with points.
Private use taxation
It is important to indicate in this section how the taxation for the private use of the company cars will be calculated locally.
Since this is for most employees an unfamiliar topic we would advise to explain the local taxation rules in a very detailed manner by including an example based on a car which is representative for the fleet.
This detailed example should include all parameters that have a direct impact on the calculation of the private use taxation amount such as car related data (listprice of the car, amount of additional options, fiscal horsepower, …) and employee related data (marginal personal income taxation rate, distance home-office, …).
It should also be mentioned that the employee remains responsible to inform HR about any change in one of these employee related data.
One general remark would be to specify in this section that these rules can be subject to changes following a company decision or following changes occurred in the local legislation.
| 01/01/2007 |
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Registration 
