Take-home Vehicle
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A company car is a
vehicle A vehicle () is a machine designed for self-propulsion, usually to transport people, cargo, or both. The term "vehicle" typically refers to land vehicles such as human-powered land vehicle, human-powered vehicles (e.g. bicycles, tricycles, velo ...
which companies or organizations
lease A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...
or own and which employees use for their personal and business travel. A take-home vehicle is a vehicle which can be taken home by company employees. Depending on the company, company cars may be available to all employees or just top-level personnel. In corporate car sharing, the company shares the vehicles and allows multiple employees (rather than just one) to make use of a company car, at times when they actually need it. The vehicles are made available from a corporate car sharing pool, and shared for a fixed or flexible period of time. One shared car could replace up to 8 non-shared cars. However, car-sharing does involve additional processing and associated costs. Still, it reduces fleet-related costs over the long term and allow employees to save not only on costs but also on time.


Attractiveness

There are three main reasons which explain why the provision of a company car for private use as a benefit may be attractive for both the employee and the employer. * The first reason is that companies can supply the fringe benefit at lower costs than the employee is able to achieve on their own – and consequently pass it on to the employee. * Secondly, the tax system may encourage the provision of cars over monetary remuneration from the perspective of both the employer and employee. Ways on how this can be encouraged include tax benefits (tax deductions and depreciation write-offs) * Thirdly, firms may want the employee to drive in a car of certain minimum standard or have access to a suitable vehicle at all times. * It may also benefit the employer if there is advertising/branding on the car's paintwork (or window stickers), since if the employee uses the car during the evening/weekend, it spreads advertising in public areas more than if the car was locked up in a garage during these times. The use of company cars is widespread in some regions. For example, business registrations account for roughly 50% of all car sales in the EU, largely due to taxation rules which give companies a strong incentive to provide the benefit. The practice has been criticised by many groups who argue that the benefit encourages people to drive more (thus increasing CO2 emissions), reduces government tax revenues, distorts economic competition, and may work to neutralise other government programs and objectives.


Usage by police departments

Police department The police are a constituted body of people empowered by a state with the aim of enforcing the law and protecting the public order as well as the public itself. This commonly includes ensuring the safety, health, and possessions of citize ...
s are among frequent participants in take-home vehicle programs, allowing officers to take home the
police car A police car is an emergency vehicle used by police for Police transport, transportation during Patrol, patrols and responses to Call for service, calls for service. Police cars are used by police officer, police officers to patrol a Beat (po ...
s they use while on duty. It is considered to be a fringe benefit by the departments. It has been viewed by some departments as a crime-fighting tool, given its cost.


Issues with take-home vehicles


Economic distortions

There is a straightforward distortion in consumer markets as consumers through tax incentives are being encouraged to consume more car services than they would have been otherwise. There is also a substantial tax loss resulting from the subsidy.


Environmental damage

Studies have shown that the subsidy encourages consumers to buy more and bigger cars than they would choose otherwise. In many areas, fuel costs are also covered by the benefit, so that the marginal cost of driving may approach zero. In these areas consumers are encouraged to drive more frequently and farther than they otherwise would, and avoid other forms of transportation. Emissions of CO2 and other harmful gases are clearly higher as a result.


Costs to government

When issued by a government agency, concern has been brought up by citizens and advocates over taxpayer money used to fund take-home vehicles. This has led some cities to cutting or reducing the number of employees to whom vehicles are offered. In
Sacramento, California Sacramento ( or ; ; ) is the List of capitals in the United States, capital city of the U.S. state of California and the county seat, seat of Sacramento County, California, Sacramento County. Located at the confluence of the Sacramento Rive ...
, the issuing of take-home vehicles has come under scrutiny as the city has faced a budget deficit. In the city of
Baltimore Baltimore is the most populous city in the U.S. state of Maryland. With a population of 585,708 at the 2020 census and estimated at 568,271 in 2024, it is the 30th-most populous U.S. city. The Baltimore metropolitan area is the 20th-large ...
, the use of take-home vehicles by city employees has been questioned due to the distance that city employees drive them to their homes. It was determined in a report that two-thirds of city employees drive their vehicles outside city limits, some more than 100 mi (160 km) from the city, and the cost to taxpayers, which included fuel, was high. Baltimore's former mayor Sheila Dixon was also criticized for having three tax-funded take-home vehicles parked at her house. She defended herself by saying she might need the vehicles if there were an emergency. In
Dallas Dallas () is a city in the U.S. state of Texas and the most populous city in the Dallas–Fort Worth metroplex, the List of Texas metropolitan areas, most populous metropolitan area in Texas and the Metropolitan statistical area, fourth-most ...
, the city was having trouble obtaining data in attempting to determine the cost of take-home vehicles to taxpayers. The city of
Los Angeles Los Angeles, often referred to by its initials L.A., is the List of municipalities in California, most populous city in the U.S. state of California, and the commercial, Financial District, Los Angeles, financial, and Culture of Los Angeles, ...
was criticized for issuing take-home vehicles to utility employees while raising rates to customers, though the city stated it would be a minuscule part of the budget. The city of
Evansville, Indiana Evansville is a city in Vanderburgh County, Indiana, United States, and its county seat. With a population of 118,414 at the 2020 United States census, 2020 census, it is Indiana's List of cities in Indiana, third-most populous city after India ...
reduced the number of take-home vehicles offered to city employees, but allowed public safety employees to keep theirs.


See also

*
Cycling Cycling, also known as bicycling or biking, is the activity of riding a bicycle or other types of pedal-driven human-powered vehicles such as balance bikes, unicycles, tricycles, and quadricycles. Cycling is practised around the world fo ...
and
public transport Public transport (also known as public transit, mass transit, or simply transit) are forms of transport available to the general public. It typically uses a fixed schedule, route and charges a fixed fare. There is no rigid definition of whic ...
: alternatives to privately owned motorized vehicles *
Fleet vehicle A fleet vehicle is a vehicle owned or leased by a business, government agency, or other organization rather than by an individual or family. Typical examples include vehicles operated by car rental companies, taxicab companies, public utilit ...
*
Remote work Remote work (also called telecommuting, telework, work from or at home, WFH as an initialism, hybrid work, and other terms) is the practice of work (human activity), working at or from one's home or Third place, another space rather than from ...
* Smart mobility: component of the European Green Deal *
Traffic congestion Traffic congestion is a condition in transport that is characterized by slower speeds, longer trip times, and increased vehicular queueing. Traffic congestion on urban road networks has increased substantially since the 1950s, resulting in m ...
* Criticism of vehicle-to-grid


References

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Vehicle A vehicle () is a machine designed for self-propulsion, usually to transport people, cargo, or both. The term "vehicle" typically refers to land vehicles such as human-powered land vehicle, human-powered vehicles (e.g. bicycles, tricycles, velo ...
Vehicle law