Car Ownership Program: How It Works and Its Benefits

In the efforts to ensure smooth operations and employee satisfaction, companies offer a range of benefits. These typically include medical coverage, dental insurance, life insurance policies, retirement planning, paid time off, college grants and scholarships, among others. One notable benefit is the Car Ownership Program, which provides a unique advantage to eligible employees.

What is a Car Ownership Program?

The Car Ownership Program (COP) is a company-provided benefit designed to assist employees in obtaining a vehicle. Under this program, employees can purchase a car with manageable monthly payments. Companies generally offer a maximum repayment term of up to 5 years, allowing for flexible payment options. However, eligibility for this benefit is limited to employees who meet specific criteria established by the company.

Most companies with a Car Ownership Program (COP) generally follow these conditions: 

1. A permanent employee with a minimum position of manager, 
2. A permanent employee who has spent at least 3 to 5 years at the company,  
3. COP duration of approximately 5 years,
4. A remaining employment period of 5 years or more. 

With a car ownership program, the company is assured of having its employees work for them for at least the next 5 years. In the same breath, this can help both employees and the company. 

How the Car Ownership Program Works 

To illustrate, if an employee has worked for 5 years and holds a managerial position, they might be eligible for a COP. In this case, the company would cover 50% of the cost while the employee covers the remaining 50%. This would involve monthly payments, with the company contributing 50% and deducting the other 50% from the employee’s salary. 

After the 5-year period, the employee would own the car. Throughout the 5 years, there is a contractual agreement between the company and the employee. The contribution percentage may vary, with the company typically covering a larger portion compared to the employee. For example, the company might cover 50%, 60%, or even 70% of the costs, depending on the specific agreement.  

Although it is highly beneficial for employees, not all companies are able to provide this program. The financial burden of covering a substantial portion of the car’s cost may be too great for some companies, especially smaller or less stable ones. 

Additionally, a vehicle purchased under the COP will undoubtedly require maintenance and repairs. This is an area upon which much thought has to be laid by the company. The company has to liaise on whether these costs should be fully borne by the employee or the company caters for some of the costs. 

Furthermore, if any unforeseen events occur during the program, the company must also anticipate. For instance, if an employee leaves suddenly. 

An employee’s departure from the company can be due to various factors, such as layoffs, resignation, or death. If any of these conditions arise, there are two options regarding vehicle ownership. First, the employee can pay off the remaining subsidy amount, thereby fully transferring ownership of the vehicle to them. If the employee is unable or unwilling to pay, the company can cover the costs previously incurred by the employee. In this case, the vehicle would become the property of the company. 

After all, the way of processing will be based on the rule or policy issued by each company.

Benefits of Car Ownership Program for Companies 

1. Employee Retention 

Basically, COP is part of the company’s retaining program. By offering such a benefit, companies can increase job satisfaction and loyalty among employees. The program not only provides a significant perk but also demonstrates the company’s commitment to its employees’ well-being and professional development. This can lead to reduced turnover rates and lower recruitment costs. 

2. Employee’s Satisfaction 

With access to a car, employees will be better positioned to effectively balance work and personal life. Less commuting stress and flexibility afforded through personal transport are some of the obvious reasons bound to improve job satisfaction. More satisfied employees will embrace being brand ambassadors for the company. 

3. Appeal in Recruitment 

Including this program in the compensation package can draw in more qualified candidates. Employees are often drawn to companies that offer these kinds of benefits, which helps the company stand out in the job market. 

Car Ownership Status during COP 

If a company is providing a vehicle to an employee through COP, then that vehicle shall still remain as owned by the company. Since the financing is done by the company, the vehicle is bought in the name of the company, and thus, the documents for ownership identify the company as the owner. 

Upon the completion of the COP term, the employee has the option to transfer the vehicle’s ownership by changing the name on the documentation to that of the employee. The costs associated with this transfer of ownership will be discussed and agreed upon between the employee and the company. 

Leveraging RecruitFirst to Maximize the Impact of Your Car Ownership Program 

RecruitFirst helps companies seek and attract top managerial talent. Through its ability to source and place high-quality managerial candidates, as an Outsourcing company, RecruitFirst can identify individuals who are not only aligned with your needs but will also benefit from and appreciate the value of a Car Ownership Program. 

In essence, RecruitFirst makes your Car Ownership Program more efficient by targeting the right talent and ensuring that the program is utilized to its fullest potential. Contact Recruitfirst and attract the best managerial talent with us!