Lease vs. Reimbursement

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Written By: Eric Goldfisher, Content Manager

It may make sense to let your employees choose and purchase the vehicles they want, and provide them with an allowance or reimburse them for mileage. Although reimbursement can save you the headaches of sourcing, managing and maintaining fleet vehicles, you cannot control the types of vehicles your employees drive.


Although it may seem cost-effective to reimburse your employees for their personal vehicle use on company time, a commercial lease for your company vehicles can be very cost effective. Working with a fleet management company, you also are provided with additional discounts and incentives that are available due to their relationships and knowledge in the automotive industry.

A car allowance is designed to cover all or a portion of the vehicles expenses, including the cost of ownership, interest, depreciation, insurance and maintenance. Generally you would pay your employees between $500 and $1000 per month depending on your employee’s position. Or, you can reimburse based on mileage usage, directly paying your employees for the actual use of their vehicles for business. However, this also can be a time-consuming reimbursement strategy for you and your employees.


When selecting to reimburse your employees for the use of their personal vehicles, you have no control over the image of your fleet. In leasing the vehicles for your drivers, you are able to not only boost the company image, but also the morale of your employees and a proven advantage when hiring.


You are also putting your drivers’ safety at stake when you leave the maintenance and vehicle choice to them. When leasing, you are able to provide your employees with late-model, safe and well-maintained vehicles. You are able to reduce the liability that an employee may be involved in an accident while on company business, if you are able to ensure that they are driving a safe vehicle and covered with the proper insurance. Often when partnering with an experienced fleet management company, you are able to include insurance and other safety training services in your lease as additional benefits for reducing liabilities.


When leasing your fleet, you are able to provide national resources to ensure that your vehicles are maintained properly throughout the lease term. When your drivers own their own vehicles, how do you know when they put off preventative maintenance or repairs? Additionally, how can you be sure that they have a reliable vehicle when you need them to be out on the road, this could mean downtime for your company if their vehicle is being repaired? Additionally, you can help reduce fuel costs, provide roadside assistance and other valuable services when working with an experienced fleet management partner and all at an effective cost for you.


Reimbursement requires your employees to spend time and energy saving receipts and filling out reports, as well as maintaining their personal vehicles. When leasing for your employees, you are able to take those burdens off of them. When leasing, you are able to leave maintenance and other administrative headaches to your fleet management partner if you choose the right company.

Let us compare the options for you, contact us today by calling 866.653.2373 or click here and we will work with you to find your fleet solution.

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