Creating an HR Defensible Vehicle Reimbursement Program

Ben RaseyVehicle Reimbursement

FAVR mileage reimbursement program - free demonstration from ARC. Person at a desk on a laptop.

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Drivers often interpret their vehicle reimbursement program in two ways. They view their reimbursement program as an expense reimbursement or an employee benefit. As the job market becomes more competitive and demand for employees increases, it is crucial that drivers clearly understand what their reimbursement is based on. At, we introduced the HR defensible concept through our Fixed and Variable Rate (FAVR) Program. Using our driver reimbursement statements, drivers receive a detailed breakdown of exactly what goes into their monthly reimbursement.

Why HR defensible is a critical concept

The HR defensible concept was derived from the idea that many suppliers in the Fixed and Variable Rate industry use a blended vehicle in their system. There is uncertainty in using a generic vehicle, for example, a “Mid-Sized SUV”. The driver does not know exactly how they are being reimbursed. This results in the plan administrators and human resources not feeling confident when explaining the program to drivers.

Jim Doherty recognized this problem when he founded He decided to use real vehicle data down to the trim level of that exact vehicle. Providing drivers and plan administrators with this data creates certainty that driver reimbursements are accurate. In return, the program is more likely to be viewed. Furthermore, the program is more likely to be viewed as an employee benefit. 

Important questions to ask when evaluating your driver reimbursement program.

When considering whether or not to update your company’s vehicle reimbursement plan, there are a few questions to help bring certainty to your program.

  • Does your vehicle reimbursement program align with your company’s culture?
  • Are driver reimbursements taxable or non-taxable?
  • Do drivers understand how their reimbursement is calculated?
  • Do drivers feel they are being reimbursed fairly?

How’s Fixed and Variable Rate (FAVR) Program is HR Defensible

If you want help identifying the answers to these questions, connect with us here. We have helped many companies make their vehicle reimbursement program HR Defensible to ensure driver certainty.

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New to a FAVR Program? Learn more about how it works here.