There are many options for vehicle reimbursement programs within the corporate travel industry. As demand for drivers on the road continues to increase, fleet managers and plan administrators are constantly evaluating programs that align with their company’s values and culture. One of the best options to consider is a FAVR Program.
What is a FAVR Program?
A Fixed and Variable Rate (FAVR) Program is an IRS-approved, non-taxable vehicle reimbursement program. Each vehicle reimbursement is calculated from a benchmark vehicle. Additionally, the driver’s reimbursement is based on their geographical location. Therefore, a FAVR program calculates direct costs the driver incurs on a daily basis. Not only this, drivers can purchase the vehicle they want.
There are two main parts to this vehicle reimbursement program.
- Fixed reimbursement: Vehicle deprecation, insurance, license, registration, and property tax.
- Variable reimbursement: Cost of fuel, maintenance, and tires per mile. This changes based on mileage driven each month.
How FAVR can provide the solution to your current vehicle reimbursement program
When considering a program that aligns with your company’s values, a FAVR program transitions your company from asset management to financial management. If your company is moving from another reimbursement program, ARC will provide the standard for vehicle cost reimbursement data. Furthermore, plan administrators do not have to worry about the hassle of locating vehicles, procurement challenges, and maintenance schedules. Instead, FAVR allows plan administrators to take a proactive approach. We make sure your program is IRS compliant and that you have a defensible program with your employees.
Using one of the top databases in the industry, the AutoReimbursement.com FAVR program updates fuel monthly sourcing data from nearly 140,000 fuel stations. With hundreds of different vehicles in our system and insurance down to 44,000 zip codes, we have formed the concept of an HR defensible program. This proactive approach not only assures the driver they will receive an equitable reimbursement but, also creates an easy-to-explain program. Best of all, FAVR is an IRS-approved non-taxable program.