Company Car Policy

Lay down the company policy on providing leased/company owned cars to eligible employees.

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The company car policy defines the guidelines for eligibility on company-owned vehicles and also enables eligible employees to opt for company-leased vehicles for official and personal use.

This policy template is available for download in Word format.

With this Company Car Policy Template, you can:

  • Implement rules & procedure for eligible employees to avail of company car facility
  • Implement rules & procedure for eligible employees to avail company leased car facility
  • Provide procedures for admin teams to follow for smooth & efficient management of these schemes

In just a few minutes, you will be able to create a company car policy. This policy covers rules to be followed with respect to:

  • Employee’s responsibility towards company owned/leased cars
  • Company’s responsibilities and obligations towards the schemes
  • Action to be initiated with related departments such as finance and payroll

Company Car Policy


The Company Car Policy has been formulated in order to introduce an employee-friendly and easy-to-administer car scheme in order to facilitate easy commuting for its select employees towards official duties.

Scope and Applicability

Employees in < Grade / Level / Designation > and above are eligible to participate in this scheme. There are two types of programs:

Scheme A: Company-owned car program Scheme B: Company-leased car scheme

Eligible employees can opt for either of the schemes. All applicable taxes are to be borne by the employee under these schemes.



  • Under Scheme A, eligible employees will be provided with a car that is completely owned, maintained and insured by the Company. The employees will have no ownership right over the vehicle except that the vehicle will be allotted exclusively for official and limited personal use.

  • The employee has no option on the choice of vehicle.

  • Under Scheme B, eligible employees can avail of a leased car for both official duties as well as for personal use. For this purpose, the Company has entered into an agreement with a car lease finance company where the employee will participate in the lease payments. The vehicle will be assigned to the employee exclusively, and the vehicle ownership will belong to the employee at the end of the lease tenure.

  • The employee has an option on the choice of vehicle.

  • Full finance is available without any down-payment requirement. The monthly equated amount includes the following:

    • Ex-Showroom Cost of the Car
    • Registration Fees
    • Insurance & Road taxes
    • Cost of Accessories


  • The process starts with the eligible employee opting for one of the schemes and approaches the HR Admin team for initiating the procedure.
  • Under Scheme A, HR Admin will forward the requirement to Procurement team, who will set the vehicle procurement process in motion
  • The procured vehicle will be owned by the Company and treated as an Asset in the books of accounts.
  • Once the vehicle is procured and allotted to an eligible employee, an internal agreement on the use, maintenance and safety of the vehicle has to be signed by the employee before the same is handed over.
  • Under Scheme B, HR Admin will contact the car lease company and based on the employee’s choice of vehicle, a supplementary agreement will be signed with the employee for regular use and purchase of the vehicle thereafter at the end of the lease tenure.
  • Based on these documents, employees can take delivery of the car.
  • On receiving the delivery of the car, the employee needs to forward the following docs to the Admin Department.
    • Original Invoice
    • Copy of Insurance Cover Note
    • Copy of Registration Certificate Book
    • Copy of Insurance Policy
  • Admin then intimates the payment schedule included in the Agreement to the HR Admin Department
  • On receiving the Payment Schedule, the HR Admin Department provides the necessary inputs to the Payroll Department via the monthly salary input.
  • Any pre-conditions on the lease with the car lease finance company must be adhered to by all parties mentioned therein.
  • The car lease finance company will raise monthly rental bills and send it to the Admin Department who will forward the same to the Accounts Department for payments.
  • Deferment of installment payments to the leasing company is not allowed under this scheme.
  • The vehicle has to be bought by the employee as per agreed terms at the end of the lease tenure or in case of foreclosure at the behest of the employee.

Maintenance / Repairs / Normal Running / Insurance

The employee will be required to maintain the car in good condition & incur all running costs, including costs of fuel, oils, air, cleaning, parking, etc., as required from time to time. If, as per agreement, the vehicle has to be handed over to the car lease company for periodical maintenance or repairs, then the employee is required to abide by the same. However, if maintenance and repairs are not covered under the agreement, employees will undertake to bear such expenses.

Traffic or parking violations or seizure of the vehicle by authorities for such violations will be the whole responsibility of the employee.

Any accidents caused due to negligence, carelessness, overspeeding or driving under the influence of alcohol or drugs will be the whole responsibility of the employee.


  • Premature exiting from the car scheme by returning the car at any point of time is allowed under the Scheme A. However, under Scheme B, premature exit from the scheme is allowed only by paying the balance installments, including any foreclosure fees / charges / penalties, as appropriate. This may include transfer charges of vehicle ownership too.
  • The working of the foreclosure charges would be as agreed with the car lease finance company.
  • In case the employee resigns to join a new organisation, there is a possibility of assigning the car to that organisation by the car lease finance company. This will need to be mutually decided by the Leasing Company and the employee’s new organisation for the continuity of the lease.


In case of inter-location transfers within the company, the car leasing company will organise all the necessary formalities. The concerned employee will be required to contact the HR Admin Department to initiate necessary processes.

In case of transfers to a subsidiary / affiliate / sister company, the car can be assigned to the new subsidiary if it also has an agreement with the said car lease finance company.

The transfer charges will be borne by the company if transfer is company-initiated. It will be borne by the employee, if transfer is employee-initiated.

Overall Coordination / Clarification / Suggestions

  • The Car Schemes will be coordinated by the HR Admin Department. The department shall maintain an MIS pertaining to the scheme across all locations of the Company.
  • All clarifications with regard to the scheme can be obtained from the HR Admin Department.

Special Circumstance and Exception

Any Deviation from this policy has to be approved by Finance & HR. Any changes to the policy has to be approved by Legal and Compliance.

Non-compliance and Consequence

Violation of this policy is subject to disciplinary action, up to and including termination.

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This template is meant to provide general guidelines and should be used as a reference. This is not a legal document. greytHR will not assume any legal liability that may arise from the use of this template.
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