What is the best way to have an Employee-of-the-month car?

What is the best way to have an Employee-of-the-month car?

I own my own business and I have quite a few employees. We started an employee of the month program based on dedication and revenues they produce. I was toying around the idea at a board meeting about getting a company car for the employee of the month. This is my idfea and I love it.We have business insurance but it does not cover the auto insurance portion of the vehicle or the driver of the vehicle, just the asset and loss portion.The issue we are having is there is no one currently who works for our company that is under 24 except for me. I am almost 30. We have a few employees who are 17-19 but most are 20-24. They all have drivers licenses with clean records per our employment requirements.

lawnrang

I think your idea is a fantastic one and should go a long ways to making them even more productive.Here are some thoughts. I would first meet with your company's insurance agent or your personal agent and find a way to do this. I think that there could be a policy set up with varying premiums based upon the driver. I have had several company owned vehicles driven by employees and we had them covered so there certainly is a policy available for this to happen. If your current agent can't get it done, go to an Independent Agent that writes for Auto Owners Insurance Company. You may want to have all of the employee's information to the agent and run all rates for all employees. This way you know worst case scenario which employee will cost you the most for the month and budget that amount.As far as the actual acquisition of the vehicle, you may want to check with your accountant/CPA but I would imagine that leasing will be your best option. A 24 month lease should be adequate and allow you to have a fairly new car every two years should you wish to keep the program going after this. By leasing the total cost would of course be entirely deductible without having to worry about depreciation which is most likely 5 to 7 years out.I would make sure you have enough mileage in the lease to avoid having a large deduction/cost upon return after the 24 months. With this in mind, figure the mileage to and from work for the employee that has the longest commute. I would assume that their use will also cover personal use so make sure to add to this as well. It may well be that the mileage most leases come with will not be enough, but purchasing added miles up front is much more affordable now than at the end.I hope that this helps and congrats again on setting up this great motivational tool. The final thought that I have is to consider the fact that one person may continually earn this perk. You may want to consider setting individual goals for each and every person based upon their length of employment, skills/level of experience and/or ability. This way you can award the car to the employee that is the highest percentage above their goal.Hope this helps and good luck!WesNorsew Investments, LLCRochester, MNHelping Business Owners Help Themselveshttp://www.alternativefranchise.com

dcgirl

I'd recommend doing something else with the same budget, like hotel gift certificates or airline miles/gift certificates (not actual tickets though). A car would open the company up to too much liability--- for example, Jane wins in March gets the car, then goes out driving and has an accident where the other driver is badly hurt or dies, the other driver can (and probably will) sue your company because your company owns the vehicle. Just having insurance doesn't prevent you from getting sued, either- say someone has a wreck and the other driver is paralyzed. If you *did* get an insurance policy and it covered up to $500,000.00, but the other driver would need lifelong care at an estimated cost of 2 million, your company would have to pay the 1.5 million that the insurance does not cover. With such young employees, you have to expect many of them will be inexperienced drivers, and some will also be tempted to drink and drive. When they're in your car, you're ultimately responsible.Also you can't insure something unless you have a collateral interest in it--- in other words, an employee can't take out a car insurance policy on the company car because there is nothing for them to lose if the car is destroyed. It belongs to the company, not to them. Otherwise, I could take out a policy on my boss's car, trash it and collect the payment. So that's not going to work. When you insure property, you have to own it first.You can probably find an equally fun way to reward people without exposing the company to such high liability.If you really, really want to do a car, then give rental car gift certificates and have all the transactions done by the employee in his or her own name only- they pick the car, sign the rental agreement, and pay for the insurance. Then it will be a lot harder for your company to get sued. As long as your company's name is found anywhere on the paperwork, title, rental agreement, lease, anything, you can be sued when there's an accident. And don't try to be nice and do everything in your own name instead of the company name--- you'll be the one getting sued.

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