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Car Allowance Policy

This document outlines the options, allowances and choice of cars available to employees who are eligible to receive a __________________ car or a Monthly Car Allowance and the responsibilities and actions required of the employee.

HR managers in any part of the country can adapt this Model Policy for use at their own workplace.


The __________________ may, at its discretion, provide a __________________ car or a Monthly Car Allowance to employees whose principal duties require extensive business travel.  The principal indicator will be the requirements of the job role but a review of needs will be carried out when an employee drives more than [X] business miles in a year.  Once agreed, employees who require a __________________ car or a Monthly Car Allowance will be defined as ‘essential car users’.  This classification will be reviewed annually and where an employee has reduced his/her mileage to below this level the company car/monthly car allowance will be reviewed and may be removed.


In each case, the __________________ will consider the use of alternative transport modes, but if the annual mileage is [x] business kilometers or above these are likely.  In considering the choice of __________________ cars and setting the monthly car allowance, the __________________ has included the following eligibility criteria for cars:

  • environmental impact;
  • safety;
  • reliability;
  • whole life costs
  • security of __________________ property kept/transported in the car

The choice of __________________ car must be suitable and appropriate for business use and the __________________ reserves the right to disqualify any car chosen by an employee that is considered unsuitable or impractical for business use.

Eligibility Criteria and Exemptions

Employees may not drive any business vehicles without prior approval of their supervisor. Prior to approving a driver and periodically thereafter, supervisors must check the employee’s driving record. Employees approved to drive on company business are required to inform their supervisor of any changes that may affect either their legal or physical ability to drive or their continued insurability.