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Many workplaces in New Zealand have a company car, or a fleet of company cars, for employees to use for work purposes. Any business that uses company cars should have a vehicle use policy. This policy should set out the rules and restrictions on how cars are to be used by staff. While it is not a legal requirement to have a vehicle use policy, having one helps manage issues later on around vehicle use. This article sets out what a vehicle use policy is, when you and your business should have one, and a quick summary of your vehicle-related health and safety obligations. 

What Is a Vehicle Use Policy?

A vehicle use policy sets out how employees are to access and handle company vehicles. For example, this policy should outline:

  • how the business will manage a fleet of company vehicles; 
  • which employees are eligible to drive company vehicles; 
  • any qualification procedures to drive the vehicle; and 
  • any disciplinary processes for misusing a company vehicle.

Vehicle use policies can include any details that you think are important in your business’ context, and can change in different sectors. A business in the agricultural sector may have different practices around company vehicles than inner-city businesses. However, standard terms for vehicle use policies include:

  • any restrictions on employees using company vehicles for personal use;
  • if anyone else (like an employee’s spouse) can drive a company vehicle;
  • who pays the insurance excess on the vehicle;
  • expectations for care and maintenance;
  • how workers log their business use of a company vehicle; and
  • any restrictions on parking the vehicle. For instance, as a safety precaution, some employers require that company cars are always locked overnight in a garage, instead of on the street. 

When Should You Have a Vehicle Use Policy?

It is good practice to adopt vehicle use policies if your business uses company cars. You should develop a policy in conjunction with employees where they agree to be bound by it. Vehicle use policies are important as a means of formalising good practices. 

By contrast, a series of informal rules and practices around company cars can become a serious issue for you. As an employer, small issues with how your employees use company vehicles can over time escalate into serious problems.

For instance, if you feel that an employee is not taking adequate care of a company vehicle, it is much more impactful if the employee has already agreed to abide by a policy requiring them to take care of a company vehicle.

The other benefits of a vehicle use policy are that it reduces confusion among your employees. It is good to have a document that clarifies questions they may have. Questions include whether they need to log all of their trips in a company vehicle and whether anyone else can drive the company car. While the policy is essential for when issues arise, it is also a useful document to make sure all employees understand their obligations.

Health and Safety Obligations

Your vehicle use policy should also help your business meet its health and safety obligations for its employees who are driving as part of their work. Employers owe a responsibility under health and safety law to ensure employees’ health and safety while they are at work, including driving a company vehicle. 

There are a range of duties around driving, including ensuring that employees are capable and safe to drive (both physically, and in the sense that they are not under the influence of drugs or alcohol). There are also specific duties around company vehicles. As an employer, you must ensure that company cars are warranted, in good working order, appropriately insured and used appropriately for work.

Key Takeaways

A vehicle use policy sets out how employees are to access and handle company vehicles, and a range of other terms and details around vehicles in the business. It is an essential and useful policy for any business with company cars. The policy can clarify your expectations for how employees should drive, maintain and manage company cars. It also provides you with a firmer basis for correcting an employee’s behaviour if it infringes the policy. 

If you have any questions about vehicle use policies, you can contact LegalVision’s employment lawyers on 0800 005 570 or complete the form on this page.


What is a vehicle use policy?

A policy that sets out the rules and restrictions on how employees should use company cars in a business. This can include terms around access, driving, maintenance and security.

When should a business have a vehicle use policy?

Every business with company cars should consider developing a vehicle use policy.

What is the law on whether an employee’s spouse can drive a company vehicle?

There is no strict law on this: different companies can have different policies. This kind of detail should be set out in the company’s vehicle use policy.

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