Document #:
Title:
Car Policy
Car Policy
NAME
DESIGNATION
WRITTEN BY:
REVIEWED BY:
APPROVED BY:
REVISION NO.:
DATE OF ISSUE:
COPY TO
NAME
1st Copy
:
2nd Copy
:
3rd Copy
:
4th Copy
:
5th Copy
:
6th Copy
:
DESIGNATION
DATE
Document #:
Title:
Car Policy
DISTRIBUTION LIST
COPY #
NAME
DESIGNATION
1.
All Employees of ABC
All Designations included
2.
<Job Title>
3.
<Job Title>
4.
<Job Title>
DATE
Document #:
Title:
Car Policy
AMENDMENT SHEET
REV. #
DATE
INITIATED BY
PAGE #
SECTION
NATURE OF AMENDMENT
DONE BY
Document #:
Title:
Car Policy
TABLE OF CONTENTS
1. Scope ................................................................................... 5
2. Purpose ................................................................................ 5
3. Exclusion............................................................................... 5
4. Policy................................................................................... 5
4.1. General.............................................................................. 5
4.2. Scheme .............................................................................. 8
4.3. Entitlement ......................................................................... 8
4.4. Buy Back Option ................................................................... 9
4.5. Premature Buy Back Option on Promotion: .................................. 10
4.6. Disposal of Car Due to Promotion ............................................. 10
4.7. Disposal of Car Due to Separation/ Resignation/ Termination ........... 11
4.8. Insurance, Registration, Taxes Etc. ........................................... 11
4.9. Fuel Entitlement ................................................................. 12
4.10. Car Maintenance ................................................................. 13
4.11. Encashment of Benefit .......................................................... 14
4.12. Car Tracker Installation ........................................................ 15
4.13. Car Theft.......................................................................... 15
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Page 4 of 15
Document #:
Title:
Car Policy
1. SCOPE
The policy covers the cars offered by the company to the entitled employees.
2. PURPOSE
The Policy has been framed with the objective of providing clear guidelines to the
employees entitled for the company maintained cars also to establish a procedure and to
ensure implementation of the said procedures for the issuance, maintenance and repair of
the cars provided. Approvals, controlling and accounting of all the related expenses should
be in compliance with applicable federal law and international auditing guidelines.
3. EXCLUSION
None.
4. POLICY
4.1.
GENERAL
We at (COMPANY NAME) are always working for the benefit and betterment of our
employees.
4.1.1.
The company offer cars to the incumbent of the designated position(s)
where company maintained transport is provided as an industry practice/
norm.
4.1.2.
The cars will be given for the period of minimum X years.
4.1.3.
The company does not undertake to guarantee the provision of a new car.
All cars available for re-allocation have to be considered before a new car
commitment will be agreed. The Management has absolute discretion to
determine which car may or may not be re-allocated.
4.1.4.
While the Company will make the necessary efforts for procuring the car as
soon as an employee is entitled to one, it will not make any additional
payments (i.e. premiums or the likes) for the purpose.
4.1.5.
Company will facilitate and make attempts to procure a car of employee’s
color choice, however, there is no guarantee that the color chosen by
employee will be available or delivered by the manufacturer.
4.1.6.
As per manufacturer’s requirements, company is constrained to provide the
manufacturer’s prevalent neutral colors as second or third option and it is
at the manufacturer’s discretion to deliver cars with colors that coincide
with their assembly and manufacturing schedule.
4.1.7.
On the time of receiving the car, it is mandatory for the employee to
produce the copies of valid driving license. Otherwise the car will not be
handed over to the employee unless he/she arranges for a proper valid
driving license.
4.1.8.
All employees, upon the delivery of the car must make the duplicate copy
of the car key and submit the same to the Administration Department.
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Document #:
Title:
Car Policy
4.1.9.
On the time of issuance, in case of new car an amount of Rs. XXXX/- will be
given to the employee for the placement of car accessories e.g. seat
covers, floor mats, steering wheel cover, mud flaps etc.
4.1.10.
In case of used car an amount of Rs. XXXX/- will be given to the employee
for the placement of car accessories. Amount exceeding to the given limit
will be borne by the employee.
1. The employee cannot use this amount to acquire the
following:2. New Tyres
3. Car Stereo/CD Changer or any other sound system
4. Alloy Rims
5. Fog Lamps
6. Anti Theft System
7. Any Interior Accessories which do not come with the standard
car
4.1.11.
After a year of usage, an amount of Rs. XXXX/- will be given to the
employee to replace the required accessories. The employee needs to get
the prior approval from Admin. Dept. for the same.
4.1.12.
The car should be driven only by the employee or his / her authorized
person. It is the responsibility of the employee to ensure that proper
authority letter designating the authorized people are issued by (COMPANY
NAME). Employee will be solely responsible for any damages or claims if
they result out of operation of the vehicle by an unauthorized person.
4.1.13.
It is the responsibility of the employee to ensure proper usage and
maintenance of the car and see that it is not misused under any
circumstances.
4.1.14.
The employee shall abide by all local and domestic traffic and safety laws
defined by district, city district, provincial and national traffic police. The
employee will also observe as well as abide by all civil and criminal laws to
ensure that the vehicle is not used in any way or form that is contradictory
to any applicable law of the state.
4.1.15.
It is the responsibility of the employee to keep the car in good condition.
4.1.16.
The car should be taken for service and maintenance work as per the
recommendations of the car manufacturer and according to the company
policy.
4.1.17.
Any such maintenance work has to be carried out with prior approval and
keeping the Admin. Dept. in loop. Any expense related to
maintenance/insurance or otherwise work carried out on the car by the
employee without approval or knowledge of the Admin. Dept. will be borne
by the employee.
4.1.18.
Employees are expected to maintain and observe a cordial and professional
attitude with the Admin department in lodging and following up request for
maintenance work.
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Document #:
Title:
Car Policy
4.1.19.
The car should be used in a normal driving mode and should not be used for
off-roading, racing or in any other way that may cause damage or may pose
a danger of causing injury or damage to the car or damage to public
property . It is the responsibility of the employee to ensure that the car is
not misused or used inappropriately.
4.1.20.
Periodic checks of each car will be conducted by the Admin. Dept., for
which the employees are required to cooperate, and action may be taken
against employees not maintaining / driving properly or keeping the car in
a condition which reduces the useful life of the car from standard and
expected wear and tear.
4.1.21.
Action may also be taken where it is seen that the employee does not drive
the car properly which results or may result in frequent damage to the car
(Action may include a portion of the cost of repair being recovered from
the employee or even recall of the car privilege from the employee
altogether).
4.1.22.
The employee may arrange for additional accessories / features to be
installed in the car entirely from his / her own, ensuring that this
installation does not cause any damage to the car or alters it in any way
that may reduce the market worth of the car.
4.1.23.
If the employee leaves the Company before purchasing the car, he / she
will not be allowed to remove the additional accessories / features and the
same will remain with the car. (These extras do not cover car stereos /
alloy rims which may be replaced with the originals before returning the
car to the Company). A list of all extras installed should be provided to the
Admin department.
4.1.24.
Prior approval must be obtained before installation or removal of any
additional accessory in the car
4.1.25.
On the time of returning the car, it must be in good state except for the
normal wear and tear. The Admin department will assess the condition of
the car and in case of any disagreement; company will have the car
evaluated from its designated external mechanics/evaluators.
4.1.26.
Any accident which requires repair / change of any body or engine part
(not listed in the routine servicing list) or repainting of any major part /
whole car will be considered as Major Accident.
4.1.27.
Any accident which requires only repair of any body part with small
painting or touch-up work or engine part below the cost of Rs. 3000/- will
be considered as Minor Accident.
4.1.28.
The employee must immediately report to the Admin. Dept. about any
damage caused to the car. Based on the estimate received, the company
would decide whether to have the car repaired through insurance company
or through their own resources. The repairing cost for the unreported
damage will be recovered from the employee.
4.1.29.
If the employee affects a repair without the knowledge or consent of
Admin department then the expense of same will be borne by the
employee and will not be reimbursed by the company.
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Page 7 of 15
Document #:
Title:
Car Policy
4.1.30.
All incident / accident related repairs would normally be claimed from the
insurance company, any portion of the expenditure not covered or refused
by the insurer would be charged to the limit specified in the Annual Limit
for Repair / Maintenance. In case where the damage has been caused due
to negligence and improper handling of the user, the depreciation amount
will be borne by the employee.
4.1.31.
In case of damage to the car, any portion of the loss not covered or refused
by the insurer and all other related expenses/charges would be charged to
the limit specified.
4.1.32.
The amount exceeding to the limit specified will be borne by the company
with the approval of (Designation) , otherwise will be charged to the
employee concerned.
4.1.33.
There is no provision for replacement / hire car under the Company’s
insurance policy. In some instances, it may be possible to provide nonexclusive use of a pool car for a limited time period, but this facility
cannot be guaranteed and may vary on a case to case basis.
4.1.34.
Disciplinary action may be taken against the employee found guilty of
violating any of the aforementioned guidelines, and the car may be
repossessed by the Company.
4.2.
SCHEME
4.2.1.
The company will hold the ownership of car until the employee exercises
the buy back option as covered by the policy.
4.2.2.
The designated staff will be given an authority letter from the company on
company’s letter head, stating his / her name, father’s name, designation,
CNIC #., authorizing him / her and / or his/her family member and / or any
person nominated by the staff for the valid usage of the car.
4.2.3.
All documentation required by Admin for issuance of any authority letter
(license copy, NIC copy etc.) must be provided by the employee for
issuance of an authority letter.
4.3.
4.3.1.
ENTITLEMENT
Following entitlements schedule will be adhered to while determining the
entitlements for the managers of various job grades:
Level
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Car
Page 8 of 15
Document #:
Title:
4.4.
Car Policy
4.3.2
Staffs of level XXX and above are eligible to avail the company paid driver
facility.
4.3.3
The company strives to provide an employee with a new car as per the
entitlement however the company holds the right to provide the staff with
the same category car from the pool. The first preference for assignment
of car will be from existing pool. If a car is not available in pool, the
company will then order the car.
4.3.4
For new employees joining company, who are entitled for a car, the car
will be ordered on confirmation and they should expect a wait period
between confirmation and delivery of car.
4.3.5
During the waiting period from ordering of car to its delivery, no cash
compensation will be provided to the staff; however, the employee will be
entitled for the monthly fuel limit, assigned as per the level.
4.3.6
Company may provide a suitable car, available in pool to an employee
during the waiting period. This facility is available only to employees at VP
Level and above subject to recall at company’s discretion.
4.3.7
On the time of car ordering, an employee may specify the color of his
/
her choice; however, company always put a second color of choice at its
own discretion depending on what is easily available and commonly in
demand in market. Employee will have to accept the car that is procured
for him / her in any color.
4.3.8
Incase the eligible car model is unavailable or discontinued in the market,
the employee will be provided with any other option available keeping in
view the acquisition price of the asset. Incase of unavailability of the same,
a used car in best possible condition will be provided to the employee.
BUY BACK OPTION
4.4.1. Staff has the option to buy the car on the completion of 4 year period from
the issuance of the car on an approximately XX% of the car price on which
the car was bought by the company.
4.4.2. In case the employee is in possession of the car which has completed its
leasing period and the employee is in possession of the car for at least one
year then the employee can buy back the car from the company. The
employee will then be provided a (new/used) car based on his/her
eligibility.
4.4.3. The buy back option of car has one year binding clause. An employee
willing to avail the option requires being the custodian of a car for a
minimum period of one year before the buy back option can be exercised.
4.4.4. If a car is replaced during the term due to any reason e.g. theft or total
accidental loss, the custody period of the car required to exercise buy back
will restart from the new date of issuance of the car.
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Page 9 of 15
Document #:
Title:
Car Policy
4.4.5. The car buy back option is available to employees with a serving period of
at least 3 years with the company.
4.5.
PREMATURE BUY BACK OPTION ON PROMOTION:
4.5.1. If an employee having a car for at least three years or is in possession of a
car that has accumulated three years” and “the employee is promoted to a
level which involves a car change”, such employee would have an option to
purchase the car at the balance value of the car payable to the financing
company plus the residual term and book value and any pre-payment
penalty to be paid to the leasing company.
4.5.2. The ownership of the car will be transferred to the employee by company
on settlement of car payments.
4.5.3. Any expense related to transfer of ownership will be borne by employee.
4.5.4. The employee availing this option, should be certain that they intend to
continue their services with (COMPANY NAME)for at least one year after the
company has invested in a new car for them.
4.5.5. Any employee who leaves within a year of being provided a company car
will be liable to purchase the car acquired for him/her, the total ownership
cost of which will be adjusted from his/her final settlement and any
balance to be paid by employee in full.
4.5.6. A new car will only be acquired for such an employee after he/she has
accepted the terms and conditions of premature buy back and has agreed
to buy the existing car in possession of the employee.
4.6.
DISPOSAL OF CAR DUE TO PROMOTION
4.6.1. If an employee is promoted to the next higher grade, which requires a
change of car, he / she may chose the option to either continue with the
existing car until the full term of the car is completed or avail the
replacement of car according to the new entitlement, if using the existing
car for at least one year.
4.6.2. The company will always try to meet its obligation to its employees,
however, in the unlikely event that company is unable to meet its
obligation due to financial constraints or considers acquisition of cars no
longer viable in the interest of the company then the company may choose
to discontinue the policy at any time with no liabilities to any employee.
Company may define some other form of compensation.
4.6.3. In case the employee has become entitled to a car and the company
chooses to delay provision/delivery of the car to the employee for reason
other than financial constraints then the company may at its discretion
provide a special compensatory allowance for the interim period till the car
is arranged /ordered for the employee. In case of existing cars, the
allowance will continue till handing over of car to employee.
4.6.4. In case the employee chooses the option of car replacement, he/she will
be required to surrender the existing car at the time of replacement. The
buy back period will restart from the date of issuance of the new car and
will continue for the next period of four years for the new car.
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Document #:
Title:
Car Policy
4.6.5. In case a manager opts to continue with the existing car, he/she will be
given the buy back option of the existing car at the end of the term of four
years. He/She will be given another car as per his/her entitlement after
the expiry of the term of his/her existing car. The buy back price will be
the book value as determined by the company policy.
4.6.6. If an employee qualifies for replacement of an existing car under his / her
possession with an upgraded car or a new car then company will get
inspected the existing car by a qualified and company approved mechanic.
In case if company on its own discretion determines that the issued car
exceeds normal wear and tear for its period of use, the company holds
every right to charge all the cost incurred in fixing the car to bring it to the
company standard from the employee.
4.6.7. The company may decline the request of an employee for car issuance /
replacement, if the car is badly abused and cannot be reallocated to any
other employee, even after routine repair and maintenance. The employee
in such case would be obligated to continue with the car and buy back the
same car from company.
4.7.
DISPOSAL OF CAR DUE TO SEPARATION/ RESIGNATION/ TERMINATION
4.7.1. On the time of separation, an employee must surrender the car in addition
to other formalities to effect full and final settlement.
4.7.2. Company will get inspected the returned car by a qualified and company
approved mechanic.
4.7.3. On the basis of the inspection report received from the mechanic, company
will at it sole discretion determine if the condition of the returned car
exceeds normal wear and tear for its period of use. In case the car fall
short of company standard then the leaving employee will have to bear the
cost of repairs, this cost may also be adjusted from his final settlement if
found sufficient.
4.7.4. The company may refuse to accept the car from the separating employee if
the car is found badly abused and cannot be reallocated to any other
employee within the company even after routine repair and maintenance.
In such condition, the employee is to buy back that car and pay complete
cost payable by company for discharging its total liability and obligation for
acquisition of car from financing company, such amount may also be
deducted from final settlement of the employee, as a result to which the
ownership of the car will be transferred to employee, Any expense of
ownership transfer to employee name will be borne by said employee.
4.7.5. In case of failing to recover the cost from employees in situations described
above, the company reserves the right to initiate legal action against the
defaulting individual.
4.7.6. This condition does not apply to any previous car(s) that the incumbent
may have already acquired from the company through the buy back option.
4.8.
INSURANCE, REGISTRATION, TAXES ETC.
4.8.1. The company is responsible for the payments related to car registration,
insurance and related government taxes.
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Document #:
Title:
Car Policy
4.8.2. It is the responsibility of employee using the car to keep the documents
and records updated and coordinate with the Administration Department
for renewal / payment of insurance / taxes etc.
4.9.
FUEL ENTITLEMENT
4.9.1. Fuel facility will be provided only to the employees entitled for the
company maintained car and those who are provided as provision.
4.9.2. The fuel entitlements for each grade are as follows :
Level
Title
Fuel Allowance per
month for petrol
and CNG option
Fuel Allowance per
month for petrol only
option
(Rs.)
(Rs.)
4
5
6
7
8
9
10
4.9.3. The fuel limits will be reviewed twice in a year (In December and July)
4.9.4. The Corporate Fuel Card will be provided to the employee and the same
will be used for refuelling using Petrol and/or CNG
4.9.5. If due to any reason the employee is unable to refuel the car through
Corporate Fuel Card, he / she must provide the receipts for the
reimbursement of the claim amount after the approval of the Department
Head.
4.9.6. Management reserves the right to authorize to enhance the above limits on
a case to case basis at its discretion.
4.9.7. Fuel facility is not cashable and the monthly entitlements cannot be
carried forward to the following month.
4.9.8. The fuel limits and accompanying corporate card is provided to employees
with the trust that it will be used for personal purpose and will not be
shared with others.
4.9.8.1. Employees of who have completed one (1) year of service at Level 4 will be
entitled for fuel facility. The facility can also be provided on management
discretion.
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Page 12 of 15
Document #:
Title:
4.10.
CAR MAINTENANCE
4.10.1.
4.10.2.
Car Policy
The company will reimburse the amount spent by the employee for the
maintenance of the car as per the manufacturer’s recommended
maintenance schedule. It is expected from the employee to undertake
maintenance of the car as per following prescribed limits:
S. No
Maintenance Job
Duration
1.
Engine oil
Min after
5,000
kms
2.
Oil Filter
Min after
5,000
kms
3.
Air cleaner
Min after
5,000
kms
4.
Servicing
Min after 5,000 kms
whichever comes first
5.
Tuning
Min after 5,000 kms or when required
6.
Fuel filter
Min after 10,000
kms
7.
Spark plugs
Min after 10,000
kms
8.
Tyres
Min after 35,000
or
every
Quarter
kms
Annual repair and maintenance of employee cars is being capped. Concept
of total maintenance during life of car is being introduced. Employees can
claim maintenance as per following annual ceiling.
Car
Total
Life
Maintenance
Limit Y1
Limit Y2
Limit Y3
Limit Y4
4.10.3.
The company will only undertake maintenance as per the standard
guidelines of the car manufacturer. Any irregular maintenance will not be
covered through the Annual Expenses and the cost for the same will not be
disbursed.
4.10.4.
Management reserves the right to authorize expenses above the limit on a
case to case basis at its discretion.
4.10.5.
Any unscheduled or unlisted maintenance expense e.g. washing, polishing,
repairing of flat tyres, replacement of internal or external accessories etc.
will be borne by the employee.
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Document #:
Title:
Car Policy
4.10.6.
Any major repairs or major accidents will be covered by insurance. The
portion of expense not covered by the insurance company will be shared
between the employee and the company on a 50-50 percent basis.
4.10.7.
All repairs will be evaluated, arranged, affected and coordinated by
Administration department.
4.10.8.
The annual maintenance ceiling cannot be carried over from one year to
next year.
4.10.9.
Finance will keep a record of total maintenance claimed against each car.
An employee inheriting a car as per car policy will also inherit the
remaining maintenance limit and will be entitled to claim maintenance of
remaining ceiling only.
4.10.10.
In case of any damage to car, the employee is obligated to report the
damage/accident to administration department within 48 hours of
occurring of the damage/accident whether minor or major. Failure to
report the incident will result in employee bearing all costs associated with
the repair of the car.
4.11.
ENCASHMENT OF BENEFIT
4.11.1.
If due to any reason a company maintained car can not be provided to an
employee, the encashment of benefit can be provided upon approval of
Head of Operations / CEO / Directors
4.11.2.
Employee, getting cash benefit in lieu of car will be entitled for the
monthly cash allowance limits including maintenance as per the following
table. The employee opting for cash in lieu of car benefit will be entitled
to fuel limits as mentioned in Section “Fuel Entitlement”
Level
Monthly Cash Equivalent (Rs. / month)
4.11.3.
In any case, employee will not be entitled for the motor car tax, insurance,
maintenance etc.
4.11.4.
Except for cases mentioned above, employees can opt for cash in lieu of
cars. The cash equivalent will be added to monthly salary and the salary
will be subject to standard tax deduction as per law. For tax impact,
employees are encouraged to discuss their individual cases with Finance.
4.11.5.
On promotion, employees will be entitled to move from one band of cash
incentive to another provided they wish to continue with cash incentive in
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Page 14 of 15
Document #:
Title:
Car Policy
lieu of car. Movement from one band to another will be governed by same
rules as applicable to allocation of a replacement car on promotion.
4.12.
CAR TRACKER INSTALLATION
4.12.1.
The company does not undertake the responsibility to install the Car
Tracker in car.
4.12.2.
The amount related to installation and usage of facility of Car tracker will
not be reimbursed to the employee.
4.12.3.
Company will only bear the cost of car tracker installation and facility
usage, where it is prerequisite for the insurance purpose.
4.12.4.
In such case, only the basic model of car tracker will be installed in the
car.
4.12.5.
Any amount related to up-gradation of the car tracker model will be borne
by the employee.
4.13.
CAR THEFT
4.13.1.
The employees are advised in their own interest not to resist if they
become a victim to a car snatching incident.
4.13.2.
In case of theft of the car, the employee is expected to report the matter
to the police as well as the Administration Department immediately so
that the case can be informed to the insurance company for further
process.
4.13.3.
The employee will assist the Admin. Dept as much as possible in filing the
insurance claim.
4.13.4.
Once all these documents are submitted, the Administration department
will file the insurance claim.
4.13.5.
The previous lease payment will be stopped by providing information to the
relevant bank.
4.13.6.
After the receipt of claim the booking of the new car will be made by the
company. The information of the delivery of the new car will be provided
to the employee after the booking process
4.13.7.
Incase of the car theft, the employee will be eligible for the
reimbursement of the transportation cost for official work. The entitlement
to the fuel expense reimbursement incase of the use of personal car will
remain the same.
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