In simple terms, a “privately owned vehicle” is a vehicle that is owned or leased to an individual and used to carry out official business tasks and duties for a company or organization. Whether you’re a new driver at an organization or simply curious about the term, this article aims to provide a detailed explanation of what a privately owned vehicle is and how it affects our daily lives. So, fasten your seatbelts, and let’s dive right in!
What is a Privately Owned Vehicle (POV)?
As earlier mentioned, a Privately Owned Vehicle, or POV for short, refers to a vehicle that is privately owned, borrowed, or leased by an individual for the purpose of conducting business or fulfilling duties for an organization or company. These vehicles are different from company-owned or government-owned vehicles since they are owned by private individuals. For example, when an employee is required to carry out a certain task requiring some form of mobility and there’s no company car or other form of mobility, they will have to use their own personal vehicles. In this case, their car becomes a privately owned vehicle.
Privately Owned Vehicles (POVs) and Payment Reimbursement
You may be wondering how these employees who use their personal cars get reimbursed for their POVs. Well, it’s typically based on mileage. This method seems really fair and can adequately cover gas, wear and tear, and any other expenses incurred while carrying out office tasks. So how exactly is it calculated?
Reimbursement Amount = Number of Miles Driven x Predetermined Rate
Now, all that’s left to figure out is the rate your company is offering to use your vehicle for office tasks. Each organization or governing body has its own rates, and these should form the basis for calculating the reimbursement amount after each trip. For example, the U.S. General Services Administration (GSA).
The GSA sets mileage rates for federal employees who use their personal owned cars to run business errands. According to A1-Auto, as of 2023:
- The standard mileage reimbursement rate at the GSA is $0.56 per mile when no government-owned vehicle is available or the use of a POV is authorized.
- If a POV is used despite the availability of a government-owned vehicle, the rate is $0.235 per mile.
- The use of a motorcycle as a POV is reimbursed at a rate of $0.53 per mile.
Mileage rates do vary depending on the employer or state, too. Private companies may choose to have their own mileage rates, depending on the industry and their own company policy. There’s no standard rate, so your company may decide to offer a higher or lower mileage rate than the example above. State and local governments may also establish their own mileage reimbursement rates for employees conducting official business within their jurisdiction. So before you use your vehicle as a privately owned vehicle, be sure to confirm the mileage rates and reimbursement procedures.
Ineligible Uses for Reimbursement
A company will always reimburse their employees whenever necessary when privately owned cars are used for business purposes. However, there are some use cases that are considered ineligible for reimbursement. They are:
- Personal Errands: Expenses incurred while using a POV for personal errands, such as grocery shopping or running personal errands during work hours, are typically not reimbursable.
- Commuting: Generally, commuting from home to the regular workplace and back is not considered eligible for reimbursement, as it is considered part of the employee’s daily responsibilities.
- Recreational Use: Using a POV for recreational purposes, such as visiting friends or going to entertainment venues, is typically not eligible for reimbursement. However, some companies may allow exceptions on a case-by-case basis.
It’s important to familiarize yourself with your employer’s policies regarding eligible and ineligible uses of POVs for reimbursement.
Can I use any vehicle as a privately owned vehicle?
No, you cannot just use any vehicle. Before providing your vehicle as a privately owned vehicle for your company, you should get the vehicle checked with our VIN check tool. With the VIN check tool, you can verify your vehicle’s overall safety and condition and be sure that it’s roadworthy and fitting to represent the company. Some more reasons why you need to utilize the PremiumVIN VIN check tool are:
Ensuring Vehicle Legitimacy
A VIN check with PremiumVIN helps confirm the authenticity of the vehicle and verifies that it is not stolen or involved in any illegal activities. By conducting a VIN check, you can have peace of mind knowing that your privately owned car is legally registered and safe to use for company purposes.
Validating Vehicle History
Another important reason why you need a VIN check is to learn about the vehicle’s history. In our report, you will find important information about the vehicle’s history, including previous ownership, accidents, repairs, and any potential title issues. Understanding the vehicle’s history helps you assess its reliability and make informed decisions about its suitability for company use.
Verifying Title Status
Does your vehicle have title brand records? Liens? Loans? When your vehicle begins to represent a company, you wouldn’t want to be caught having title brands that could pose legal complications or financial risks for both you and your company.
Assessing Maintenance and Safety
Checking the VIN can provide details about the vehicle’s maintenance records and any outstanding recalls. This information is essential for ensuring that the vehicle is in good condition, properly maintained, and meets safety standards, minimizing the risk of breakdowns or accidents during company errands.
Maintaining a Professional Image
Using a reliable and well-maintained vehicle for company errands reflects positively on you and your company’s professional image. With PremiumVIN, you can make informed decisions about the vehicle’s suitability, allowing you to represent your company with confidence and reliability.
Getting a detailed vehicle history report is as easy as tapping a single button on your mobile phone. All you have to do is:
- Visit our website in your preferred browser.
- Navigate to the VIN check tool and fill out the form.
- Make sure your VIN is entered correctly.
- Select “Search VIN.”
So that’s basically it. If you follow these steps, you should be able to verify if your vehicle can be used as a privately owned vehicle for company trips and errands.