Divide lease fleet into mileage groups to save
Using car for personal use keeps program simple
The idea of an agency-leased fleet of cars for use by employees might seem overwhelming to some home care managers, but careful planning, thorough evaluation, and choosing the right vendor are essential for a successful program, says Denise McNitt, RN, MS, division executive for Alegent Health at Home in Omaha, NE.
The year-long process of developing a lease program for the fleet of cars is expected to save the agency at least $50,000 each year in travel costs. "The first proposal from the leasing company used the same parameters to set the lease for all 50 cars," says McNitt. Rather than walking away from the idea as too expensive, the agency asked the vendor to split the cars into four groups with prices based on different mileages for each group. "Our employees drive different distances, so we were able to identify ranges, such as 8,000 to 12,000 miles, that we could use for each group," she says. Because vehicle lease prices are based on anticipated mileage, the overall cost of the contract was cut when the leases for all 50 vehicles weren't priced on the highest levels of anticipated mileage, she explains.
The cars are assigned to full-time employees who make home visits. This group includes nurses, aides, and a chaplain, points out McNitt. "Our employees login by computer and go to their first visit of the day from their homes, so they keep the cars at home with them," she says. Because McNitt did not want agency managers to have to "police" employees' use of car for business vs. personal reasons, employees can pay $200 per month to the agency to use the car for personal business. Some employees have sold their personal cars and rely upon the agency car for their personal use, she says. "Employees can only use the car for personal use within a 200 mile radius of our office but our vendor, Enterprise, offers our employees discounted rental rates for cars they can take on longer trips," she says.
One surprise that McNitt learned about in the "eleventh hour" is the Internal Revenue Service rule that using a company car for personal use is considered a benefit and employees must pay income tax on the value of the benefit. "We calculated the number of miles that $200 represents and told employees that if they drove more than that number of miles on personal business, we would withhold income tax," she says.
Employees submit a report each month detailing business and personal miles for which the car is used, so keeping track for accounting purposes is easy, she adds. The agency pays for insurance on all cars in the fleet and also buys the gas, points out McNitt. The agency is paying about $70 per month per car for insurance coverage, she says. Each employee has a gas card that is used only for the agency car, she says. The gas card also can be used at approved automobile repair shops that were chosen by the leasing vendor for maintenance and repairs, she adds. (Editor's note: AAA's web site, www.aaa.com, also has a list of approved repair shops if a leasing vendor does not offer one. On the homepage, go to "automotive" on the top navigational bar and select "approved repair facilities.")
"One key to success of this program is that I did not have to add a staff person to manage the fleet," says McNitt. "Our vendor has a staff person assigned to manage our account." Not only does the leasing company manager notify each employee when it is time for an oil change or tire rotation, but the manager also monitors gas card usage to identify trends that might indicate misuse of the cards, she adds.
"Be sure to get employee buy-in as you develop the program," says McNitt. While most employees were thrilled with the idea of the agency providing a car, some employees thought of their monthly mileage reimbursement checks as "extra money," she points out. Agency managers spent a lot of time showing the real costs of using a personal car for business as compared to what is actually reimbursed so employees would understand the benefit, she adds. (Editor's note: To calculate the costs of driving, including gas, oil, maintenance, and tires, go to www.piercetransit.org and click on "See how much the old jalopy really costs you.")
McNitt offers one last tip to ensure a smooth introduction of agency cars, "Don't let employees choose the color of their car." The agency wanted a consistent look in the community, she says. "We told everyone up front that the cars would be either white or silver, and management would make the decision."
The idea of an agency-leased fleet of cars for use by employees might seem overwhelming to some home care managers, but careful planning, thorough evaluation, and choosing the right vendor are essential for a successful program, says Denise McNitt, RN, MS, division executive for Alegent Health at Home in Omaha, NE.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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