Some jobs, especially those with travel obligations, provide company cars to employees. These cars are owned or leased by the company but are operated by the employees in specific situations outlined in the contract. These situations include transportation to sales calls, pick up supplies, make deliveries, and often to get to and from work as well.
Employees who drive company cars sometimes have the privilege of driving the car for personal use as well. If this is the case, the employee may be able to sell his current vehicle at a large financial gain because it is no longer needed. Companies sometimes use this benefit to woo potential employees, especially if a candidate's current job offers a company car.
Businesses can generally deduct the entire cost of owning, operating and maintaining company cars as a business expense. Even if employees use the cars for personal reasons as well, the car can be fully considered a business expense if the employees pay tax on the personal use of the company car as a fringe benefit.
Company cars often contain the company logo and contact information on the side or rear of the vehicle. This kind of advertising gives the company a presence in the area and helps to generate business. It is especially applicable for vehicles for services such as cleaning, home maintenance and yard maintenance.
Company cars are often newer cars with low emissions and good gas mileage. Putting these cars on the roads instead of employees' personal cars, which are likely older vehicles, reduces the environmental impact of the business. Because many companies lease their company cars, they replace them every few years to potentially maintain the highest standards in environmentally friendly vehicles.
Having access to a company car is a significant perk for employees. Prospective employees will typically prefer a position that offers a company car over one that does not. Especially if the company car is a luxury vehicle, driving the car increases an employee's reputation among both personal friends and business contacts.
If the company decides its company cars are getting too old, the people who are currently driving them are sometimes given the option to purchase the car at a discounted price. This can save multi-car families money as they replace older vehicles.