Sales Staff Vehicle/mileage Allowance

[VocalNeal]

My sales manager gets 10,000 baht a month inclusive for using his car. Now he wants me to pay his insurance and give him extra allowance to "up country" Ie. outside Bangkok. He claims this is normal for big comanies like FUJI/Xerox etc.. We are smaller than that.

I know the subject of ocassional travel was discussed before but if anyone has sales staff and would be willing to share their expenses policy or knows what others do I would be gratefull for some info. I just want to be sure this is not the usual hose the farang story.

This is not a fuel increase issue as he uses LPG.

[Cuban]

My sales manager gets 10,000 baht a month inclusive for using his car.

Does that amount covers the milage he travels? The distance he travels on business each month should control the rate you pay, I would guess that you go for flat rate to avoid having to count every Km, if he is happy with the deal it's in his benifit. (5-10 Baht / Km ?)

Now he wants me to pay his insurance and give him extra allowance to "up country"

Does the existing insurance provide cover for business use of the vehicle, does it cover your company products in transit etc. As it is his car he benifits from the conveniance, and the cover during his private driving time, consider a percentage deal? As you will be looking to recover these extra costs through the company check with your accountant that you can claim the full cost as operating expense if you pay all or some of these costs.

Add up the costs and admin time - company leasing might be more cost effective.

Outside BKK, I assume this is overnight stays etc. is this just not hotel accommodation and meals, if anything the milage rate should do down as longer runs on open roads comsume less fuel. Consider a stepped milage rate per trip, but this would probably upset his 'extras' on expenses.

...willing to share their expenses policy...

Sales staff occasionally use their own cars, if they seek some 'gas money' we generally pay it, no formal process but treat it as a petty cash issue.

This is not a fuel increase issue as he uses LPG.

Is the vehicle certified safe, registered as dual fuel for insurance purposes?

[VocalNeal]

Cuban,

Apologies,

Poor communication what I mean was

Now he wants me to pay his insurance and give him an extra per Km rate to travel "up country" Ie. outside Greater Bangkok. Pattaya, Hua Hin, Saraburi etc. in addition to the 10,000 baht / month flat fee.

Car is LPG dual fuel registered as is one of our trucks. Yes insurance should be the diff. between company and "normal"

[Cuban]

Now he wants me to pay his insurance and give him an extra per Km rate to travel "up country" Ie. outside Greater Bangkok. Pattaya, Hua Hin, Saraburi etc. in addition to the 10,000 baht / month flat fee.

Some guesses: Current private first class insurance about 12,000 Baht a year, commerical cover up to 20,000 Baht a year? So if you are putting in the company name to be able to reclaim the cost as an opperating expense will the insurance company have a point of view that you do not own the vehicle, leading to hassle in the event of a claim. If he is putting high mileage on the car it's affecting the resale price and he may be seeking redress for this at a later date as well.

The extra Baht per Km out of BKK really (IMHO) depends on how many Km he is doing per month now for that 10,000 Baht a month - and how that compares with a Baht per Km figure. If that 10k covers one trip to Hua Hin and Pattaya each week for a month that is some 3,500 Km a month and you are getting very good value for money (3 Baht a Km), if it's Pattaya once a month you are nearer 20 Baht a Km and probably a little expensive.

I think you need to get a feel for how many Km he is doing a month and what is the true cost to run the car (all costs, insurance, tires, servicing, resale impact) and compare to the cost of providing a company car.