Company Vehicle Use Policy: Free Template for Small Businesses
Quick Answer
A company vehicle use policy explains who can drive company vehicles, what they can be used for, whether personal use and commuting are allowed, safe driving rules such as no handheld phone use, how to log mileage and fuel, how to report accidents and tickets, inspection and maintenance duties and how GPS tracking is used. Have every driver sign it, check licenses before they drive and review the policy each year.
Company vans and trucks are some of the most expensive assets a small business owns, and some of the riskiest. One unsafe driver, one unreported accident or one vehicle used for weekend errands can lead to damage, injuries, insurance claims and tax questions. A company vehicle use policy sets clear rules for everyone who drives.
This guide includes a free company vehicle use policy template and explains each section, from authorized drivers to accidents and GPS tracking. It's general information; review your policy with your insurance agent and an employment attorney.
Free Company Vehicle Use Policy Template
[Company Name] Company Vehicle Use Policy
Effective date: [date] | Policy owner: [name/title]
1. Purpose. This policy sets rules for the safe and proper use of vehicles owned or leased by [Company Name].
2. Authorized drivers. Only employees approved by [role] may drive company vehicles. Drivers must be at least [age], hold a valid driver's license for the vehicle type and meet the company's driving record standards.
3. License and record checks. Drivers must provide a copy of their license and authorize driving record checks [at hire and annually], as permitted by law. Drivers must report any license suspension, revocation or moving violation within [number] days.
4. Business use. Company vehicles are for business purposes, including travel between job sites, to customers and to pick up supplies.
5. Personal use. [Personal use is not permitted.] OR [Limited personal use is permitted as follows: ___.] Employees who take vehicles home do so only with approval from [role].
6. Passengers. Only employees and authorized business passengers may ride in company vehicles. [No family members or hitchhikers.]
7. Safe driving. Drivers must obey all traffic laws, wear seat belts and require passengers to do so, and never drive under the influence of alcohol or drugs. Handheld phone use while driving is prohibited.
8. Mileage and fuel. Drivers must record [daily mileage, trips and fuel purchases] using [log or app]. Company fuel cards are for company vehicles only.
9. Inspections and maintenance. Drivers must complete a [daily/weekly] inspection checklist and report defects immediately. Unsafe vehicles must not be driven.
10. Accidents. Drivers must stop, check for injuries, call emergency services if needed, notify the police as required by law, take photos, exchange information and report the accident to [role] immediately.
11. Tickets and fines. Drivers are responsible for traffic and parking tickets received while driving company vehicles, [as permitted by law].
12. GPS and telematics. Company vehicles may be equipped with GPS tracking to support routing, safety and asset protection. Location data is used for [purposes].
13. Smoking and cleanliness. No smoking or vaping in company vehicles. Keep vehicles clean and secure, and lock them when unattended.
14. Violations. Violations may result in loss of driving privileges and discipline, up to and including termination.
Driver acknowledgment: I have read and agree to follow this policy. Name: ________ Signature: ________ Date: ______
Why You Need a Vehicle Use Policy
- Safety for drivers and the public.
- Insurance requirements and lower claim risk.
- Clear rules on personal use and commuting.
- Better records for mileage, fuel and maintenance.
- Consistent discipline when rules are broken.
- Protection of expensive assets.
Authorized Drivers and License Checks
Decide who may drive, based on job need, license type and driving record. Many insurers have their own requirements for minimum age and driving history, so check your policy before setting standards. Collect a copy of each driver's license, set a schedule for reviewing driving records and require drivers to report suspensions and violations. Record checks may involve consent and notice requirements under federal and state law, so follow the proper process or use a provider that does.
Business Use, Personal Use and Commuting
| Option | How it works | Considerations |
|---|---|---|
| No personal use | Vehicles stay at the shop after hours | Simplest; lowest risk |
| Take-home for on-call or field staff | Drivers commute in company vehicles | Convenient; may create taxable personal use |
| Limited personal use | Small errands allowed with rules | Requires clear limits and logs |
Personal use of a company vehicle, including commuting, can be a taxable fringe benefit to the employee, with special valuation rules and some exceptions. If you allow it, keep logs that separate business and personal miles and ask your accountant how to value and report it. See commuting vs. business miles.
Safe Driving Rules
- Obey all traffic laws and speed limits.
- Wear seat belts, and require passengers to wear them.
- No handheld phone use while driving; pull over to call or text.
- No driving under the influence of alcohol, drugs or impairing medication.
- Secure cargo and tools.
- Take breaks on long drives to avoid fatigue.
Some states and cities restrict phone use while driving more strictly than others, so make sure your policy at least meets local law. See the cell phone policy.
Mileage and Fuel Logs
Require drivers to record trips, mileage and fuel. Logs support tax records, help separate business and personal miles and reveal fuel misuse. Apps with GPS make logging automatic. See the fuel log and mileage tracking software.
Inspections and Maintenance
Drivers are the first to notice problems. Require a quick inspection before driving, such as tires, lights, brakes, fluids and damage, and set a clear process for reporting defects. Unsafe vehicles must be taken out of service until repaired. Keep a maintenance schedule for each vehicle. See the vehicle inspection checklist and maintenance log.
Accidents
- Stop and check for injuries; call 911 if anyone is hurt.
- Move to safety if possible.
- Call the police if required by law or if there's significant damage.
- Take photos of vehicles, the scene and damage.
- Exchange information with other drivers.
- Don't admit fault or sign anything except as required.
- Report the accident to your manager immediately.
- Complete the company accident report the same day.
Keep an accident report form in every vehicle. See the incident report form.
Free Vehicle Accident Report
Vehicle Accident Report
Driver: __________ | Vehicle / tag #: ______ | Date and time: ______ | Location: __________
Injuries? ☐ Yes ☐ No | Police called? ☐ Yes ☐ No | Report #: ______
Other driver name, phone, insurance: __________
Description of what happened: __________
Photos taken? ☐ Yes ☐ No | Witnesses: __________
Driver signature: __________ | Reported to: __________ | Date: ______
Tickets and Fines
Most businesses make drivers responsible for traffic and parking tickets they receive. If you plan to deduct fines from pay, check federal and state wage rules first, since some states restrict deductions or require written authorization. See whether you can deduct from pay.
GPS Tracking
GPS on company vehicles helps with routing, dispatch, theft recovery and safety. Tell employees vehicles are tracked, explain how location data is used and follow state rules on vehicle tracking and notice. See GPS tracking laws by state.
Assigning and Tracking Vehicles
Treat vehicles like other assets: tag them, record who they're assigned to and track mileage, maintenance and condition. When an employee leaves, collect keys, fuel cards and the vehicle, and inspect it. See asset tagging.
Example: A Pest Control Company
A pest control company let technicians take vans home but had no written rules. One van was used to move furniture on a weekend, another had a cracked windshield for weeks and fuel costs kept rising. The owner wrote a vehicle use policy that banned personal use beyond commuting, required daily inspections in an app and matched fuel card purchases with GPS mileage. Fuel costs dropped, and repairs were caught early.
Common Mistakes
- No written policy or signed acknowledgments.
- Never checking driver licenses after hire.
- Unclear rules on personal use and commuting.
- No accident process in the vehicle.
- Ignoring defects reported by drivers.
- Tracking GPS without telling employees.
Vehicle Policy Checklist
| Step | Done? |
|---|---|
| Define authorized drivers and standards | |
| Set license and record check process | |
| Decide personal use and take-home rules | |
| Write safe driving rules | |
| Require mileage, fuel and inspection logs | |
| Put accident reports in every vehicle | |
| Explain GPS tracking | |
| Collect signed acknowledgments |
Vehicle Assignment and Key Control
Record which vehicle each driver is assigned, who holds keys and fuel cards and when vehicles change hands. Use a key control log for spare keys and require drivers to report lost keys immediately. Clear assignment records make it easy to know who was driving when a ticket, toll or damage report comes in. See the key control log.
Loading and Cargo Rules
- Don't exceed the vehicle's weight rating.
- Secure ladders, tools and materials before driving.
- Keep hazardous materials in approved containers and follow labeling rules.
- Lock tools and equipment out of sight when the vehicle is parked.
Unsecured loads can injure people and damage vehicles, and stolen tools are a common loss for field businesses.
Personal Vehicles Used for Work
If employees use their own vehicles for work, your policy should cover that too: requiring a valid license and insurance, reimbursing business miles and logging trips. Ask your insurance agent how coverage works when employees drive their own cars for business. See commuting vs. business miles.
Driver Training
Give new drivers a short orientation: vehicle controls, inspection steps, loading rules, accident procedures and how to log mileage and fuel. Add refresher training after accidents, near misses or policy changes. Some industries and vehicle types have specific licensing and training requirements; check what applies to your fleet.
Reviewing Driver Performance
Use mileage, fuel, inspection, accident and GPS data to review drivers regularly. Look for patterns like frequent hard braking, speeding alerts, missed inspections or unusual fuel use. Recognize safe drivers, and coach or restrict drivers who show risky patterns before an accident happens.
Insurance and Your Policy
Share your vehicle policy with your insurance agent. Insurers often have requirements for driver age, records and training, and a strong written policy may help with coverage. Make sure the policy matches what your insurance actually covers, such as personal use or employees taking vehicles home.
Vehicle Policy for Small Fleets
With only one or two vehicles, you may not need every section of the template, but you still need the basics: who can drive, personal use rules, safe driving, accident steps and a signed acknowledgment. A short one-page policy is far better than none, and you can add sections as your fleet grows.
Common Questions From Drivers
- "Can I stop for lunch in the company vehicle?" Short stops during the workday are usually allowed; follow the policy on personal use.
- "Can my spouse ride with me?" Only authorized passengers are allowed.
- "What if I get a ticket?" Report it and follow the policy; drivers are usually responsible.
- "Is the vehicle tracked?" Yes, if GPS is installed, as explained in the policy.
Vehicle Policy Quick Reference
| Item | Recommendation |
|---|---|
| Drivers | Approved, licensed, record checked |
| Personal use | Clearly allowed or prohibited |
| Phones | No handheld use while driving |
| Logs | Mileage, fuel and inspections |
| Accidents | Report immediately with a written report |
| GPS | Disclosed to drivers |
Rolling Out the Policy
Meet with all drivers, walk through each section and answer questions before collecting signatures. Give drivers a copy to keep and put a summary card in each vehicle with accident steps and contact numbers. Set a date to start the new logging and inspection rules, and review compliance after the first month.
Offboarding Drivers
When a driver leaves or loses driving privileges, collect keys, fuel cards, toll tags and any equipment assigned with the vehicle. Inspect the vehicle, record mileage and condition and update the asset record. Cancel fuel cards and remove the driver from your insurance list as your insurer requires.
Reviewing the Policy Each Year
Once a year, review accidents, tickets, fuel costs, inspection compliance and maintenance problems. Check with your insurance agent for new requirements, update the policy and ask drivers to sign the new version. Recognize drivers with clean records, and use the review to decide which vehicles need replacement soon. See equipment replacement plan.
Tolls, Parking and Other Charges
Decide how tolls and business parking are paid, such as toll tags billed to the company or fuel cards that allow parking. Require receipts for out-of-pocket business parking and make clear that personal tolls and parking are the driver's responsibility. Match toll statements with trip logs each month.
Electric and Hybrid Vehicles
If your fleet includes electric or hybrid vehicles, add rules for charging: where and when to charge, how home charging is reimbursed if allowed and how to report charging problems. Track charging costs the same way you track fuel so you can compare vehicle costs.
Final Thoughts
A company vehicle use policy protects your drivers, the public and some of your most expensive assets. Decide who can drive, set rules for personal use, require safe driving, logs and inspections, put an accident process in every vehicle and explain GPS tracking. Have every driver sign it, review it with your insurance agent and update it each year.
Track Vehicles and Mileage With Updoot
Updoot's mileage tracking records trips by driver and job, and asset tracking keeps each vehicle's assignment, inspections and maintenance history in one place.