Q: Do most of our members provide company- owned cars for sales people or do a mileage reimbursement?
A: The last time we surveyed the membership about 72% paid mileage and 21% provided company owned vehicles. With sales managers it was 58% paid mileage and 37% in company owned vehicles. The remaining 5%-7% had some form of compensation plan where any vehicle usage wasn’t reimbursed but had an offsetting higher commission rate. (Information source: 2010 Compensation & Benefits Report)
I am starting to see a few more companies using fuel efficient cars and small SUV’s for their sales people with company logos and services mentioned on the car. They have some very clever decals and signage that helps keep your name out there. My guess would be that most sales reps driving company cars will likely be using something like this soon. This is a marketing tool so the financial comparison gets skewed by the value provided there.
I’ve always favored sales reps furnishing their own vehicle as long as they don’t drive a junker. If you pay a sales rep 55 cents per mile and the sales vehicle gets 25/30 miles per gallon, they will do very well on that plan. Most of the time they will spend $50 to fill up, they drive 350 miles and you reimburse them $192 for those miles. Not bad. They will take care of their personal car better, can drive it on weekends and you have one less expense and headache. They cover insurance, maintenance, replacement costs, etc.
Either way works as long as fuel efficiency and having the proper image is a priority. CW