Vehicle Policy-Own your Car – HR Policy Manual

Objective

To facilitate the employees with better options of transportation for execution of field work.
To administer and provide guidelines to employees on purchase of vehicle, expense claim process.

Scope

Field employees in the defined grades from specific departments like sales/ production are eligible for this policy as per the eligibility guidelines on approval from HOD.
Employees whose work involves extensive field travel for official work are covered under the policy.
The benefit of ‘Own your Car’ policy will be a need-based exception related to performance and business requirements and shall not to be treated as a right.

Definition

Cost of the Car: Road Value which is the total of Invoice value (including the registration charges, insurance, ex showroom price of vehicle) and all the taxes payable at the time of purchase the Car.
Equated Monthly Instalment (EMI): A fixed monthly payment made by the borrower to the bank from where he has taken the loan. This is paid to the lender for repayment of the loan over a period of time. The EMI amount depends on the rate of interest, the loan amount and the tenure for which you have taken the loan.
Scheme Option Date: It is the date on which the scheme is opted for. The employees can opt for this scheme as per grade eligibility, on completion of 7 years under this policy, on change of band due to promotion, or on switch from existing pre-used car to a new car under policy.
Period of Option: The employee will be covered in this scheme for tenure of 7 years.
Pre-used car: This refers to the second hand or existing car under use.

Eligibility

All employees from Grade M1 upto Grade M5, from sales, production, FS, PD department, are covered under this scheme based on approval from HOD. The approval shall be granted based on the requirements of business and there is no direct eligibility by-default.
This scheme can also be extended to any other grades or department, need based, on special approval from HOD/Management.

The grade wise Car Value eligibility is as given in the table below;

Table 1. Car Value Eligibility

Grades	M1-M3	M4-M5
Max Entitlement	7.5 Lakhs	9 Lakhs

New Vehicle Purchase

The employee should preferably purchase new car under this scheme.
The employee is required to exercise his choice of car within the monetary limits/value of car specified in the scheme against his grade.
The vehicle rate is calculated on Diesel cars. No Electric Vehicles (EV) or CNG based vehicles would be eligible for this vehicle policy.
The limit includes the cost of car, registration amount and insurance.
In case the amount exceeds beyond specified amount then the employee should make the difference payment on self basis through down payment.
The employee cannot opt for model below the specified limit.
The vehicle purchased should be sturdy enough and have sufficient ground clearance to run efficiently on the rough rural roads during field work.
Expenses towards car accessories will have to be borne by the employee.
Once approved by the HOD, the employee will firm up the car and make the booking of the car with the dealer. Car will be booked in the name of the employee.
Employee will take a car loan from the bank servicing the dealer or any of his bank and submit the booking order copy and the Loan EMI confirmation copy from the bank to HR.
The employee shall be assisted with payment of the down payment amount as an interest free advance loan (normally 15% of the cost of vehicle as per eligibility), which shall be recovered on monthly basis over a period of 2 yrs. from the salary. The employees will have to put up a request to avail this benefit. Any income tax applicability on this amount shall be borne by the employee.
Those availing advance loan from the company shall be getting a reimbursement rate lower by Re 0.5/- of his Grade’s eligibility rate (Refer Table 2).
There is a monthly limit for vehicle usage which is maximum 3000km per month at all grades.
Company will reimburse a fix per kilometer rate that shall cover the expenses of loan EMI amount, insurance (for consecutive years) and diesel expenses in the form of monthly travel expense reimbursement as specified in Policy.
An additional factor of ‘Extensive Running Cost’ shall be provisioned in the per kilometer rate for all employees from Grade M4 and to facilitate those employees whose traveling distance is extensive.
This is nothing but the Driver eligibility given at M4-M5 Grades, subject to driver actually being appointed.
In case the car is self-driven, the non-driver limit for equivalent grade shall be applicable. The team member shall be declaring for every month whether the vehicle was self-driven (Yes) or (No) along with the log sheet in expense claim tool.
Claiming the ‘with driver’ rate without appointing the driver shall be treated as an disciplinary issue.
Payment of EMI amount to the bank will be the sole responsibility of the employee purchasing the car.

Using Pre-Used Vehicle

In case the employee wishes to use his own pre-used vehicle then employee should ensure that the model of pre-used car is not below the specified limit of eligibility. Approval with all vehicle details shall be taken from HR for checking car eligibility.
The pre-used vehicle should be in the name of the employee.
The distance traveled by the pre-used car should not have exceeded the limit of 2.52 lakh while in this scheme.
Once this limit is reached, the pre-used car will exit from this scheme.
On entry into the scheme with pre-used car, the entry reimbursement rates that shall be applicable will be at par of the initial 3 yrs of new car.
The km run shall be verified by finance department on submission of speedometer reading photograph with every log book during expense claim.

Procedure

The car entitlement limit includes the car value, registration amount and the first-year insurance amount.
The car will be used for a period of 84 months. After 84 months, the employee is entitled to re-enter the scheme with new car purchase as per his existing grade entitlement.
The maximum km to be traveled will be 3000km.
If the employee is promoted in between before the expiry of 84 months, he may either continue to use the same car till completion of the 84 months block period or he may sell the car, repay the remaining principal amount with the insurance company and provide the advance amount for remaining period to the company. Only after all the settlements on previous vehicle, the new vehicle purchase can be made whereby the company will again provide the advance 15% towards new vehicle purchase as per new limits, if claimed.
If the car meets with an accident, employee will undertake proper survey report from the surveyor and submit his claim for damages from the Insurance Company. In all accident cases, a police FIR must be filed and the other necessary procedures be completed. The employee alone shall be responsible for completing all the necessary formalities whatsoever and the company shall not be involved, except for providing guidance whenever required.
The maintenance and upkeep of the vehicle is solely the responsibility of the employee.
The admission in the Car Scheme will be from the date the delivery of the Car is taken by the employee.
The employee must maintain a vehicle log book and monitor fuel consumption, PUC valid certification, Insurance validity, record towards servicing of the car on a regular basis. He must produce the same to the company whenever demanded.
It is mandatory to follow VNR vehicle safety Policy once entering this scheme, failing which disciplinary action may be taken if any untoward incidence happens.

Reimbursement Model

Employee will be entitled to fix reimbursement rate (Refer Table 2) on kilometer run basis as specified in the table that includes cost of fuel, cost of maintenance (including regular maintenance, tyre replacement & battery change), EMI, Insurance (for succeeding years), etc.

Table 2: Reimbursement Rate

Grade	M1-M3	M1-M3	M4-M5	M4-M5	M4-M5	M4-M5
	Without Extensive running Assistance	Without Extensive running Assistance	With Extensive running Assistance	With Extensive running Assistance	Without Extensive running Assistance	Without Extensive running Assistance
Tenure	1-3yrs	4-7yrs	1-3yrs	4-7yrs	1-3yrs	4-7yrs
Rs. /km (Without Advance)	12.5	13	17	17.5	13.5	14
Rs. /km (With Advance)	12	12.5	16.5	17	13	13.5

Reimbursement will be against submission of necessary bills and distance traveled expense claim in Xeasy.
For any balance km (monthly limit is 3000km) left unclaimed by the end of financial year, the reimbursement shall be done at reduced rate to cover the fixed cost elements like EMI, insurance and extensive running cost. Such claims can be put up upto maximum 10% of total annual allowed km.
For any excess km driven in any year, the reimbursement towards the end of financial year will be purely on approval basis at reduced rate to cover the variable cost elements like fuel cost, maintenance cost and Tyre & Battery change cost.
The employees need to get the vehicle serviced at regular intervals based on the servicing schedules from the car manufacturer.
Employee should ensure that the tyres are always road worthy and have proper grip, replacing immediately whenever needed.
Employee is responsible to make timely payment of Insurance Premium.
Declaration on whether the car is self-driven or not on monthly basis, in case where the additional benefit of “Extensive running” is being paid, is mandatory. In case of vehicle being self-driven, the lower rates of without the benefit of “Extensive running” shall be applicable. Not declaring the same shall mean non compliance and will attract disciplinary action.

Separation

In the event that the employee resigns or his/her services are terminated before the stipulated 84-month period, the employee will be required to keep the car.
The EMI reimbursement paid through salary and other perquisites will stop beyond the last day of working.
The employee will be responsible to pay the EMI further to the bank on his own.
The employee needs to pay back the remaining non recovered advance amount taken from the company for vehicle purchase.

Precautions

It is mandatory for the employee to strictly adhere to the VNR Vehicle Safety and Maintenance Policy. Disciplinary action may be taken in case any violation is found.
Every Employee under this scheme should be possessing Driving license.
Employee is expected to keep the car in good, clean and running condition. Company does not take any responsibility for breach of traffic rules, violation of any traffic laws, rash driving and/or car driven by any other person.
The employees should drive the vehicle like a responsible citizen by following all the traffic rules and regulations.
All the vehicle related documents should be available in the vehicle all the time.

Rates for old Vehicle Policy

Those who have purchased new vehicle or enrolled old vehicle under the old vehicle policy i.e. before 1st April 2020, will continue in the old policy till completion of 5 yrs. with the revised per km rates as given below.

Table 3: Old Reimbursement Rate For Sales/PD

Grade	M1-M3	M1-M3	M4-M5	M4-M5	M4-M5	M4-M5
	Without Extensive running Assistance	Without Extensive running Assistance	With Extensive running Assistance	With Extensive running Assistance	Without Extensive running Assistance	Without Extensive running Assistance
Tenure	1-2yrs	3-5yrs	1-2yrs	3-5yrs	1-2yrs	3-5yrs
Rs. /km (Without Advance)	13.5	14	16.5	17	13.5	14
Rs. /km (With Advance)	12.5	13	15.5	16	12.5	13

Table 4: Old Reimbursement Rate for Production/FS

Grade	M1-M3	M1-M3	M4-M5	M4-M5	M4-M5	M4-M5
	Without Extensive running Assistance	Without Extensive running Assistance	With Extensive running Assistance	With Extensive running Assistance	Without Extensive running Assistance	Without Extensive running Assistance
Tenure	1-2yrs	3-5yrs	1-2yrs	3-5yrs	1-2yrs	3-5yrs
Rs. /km (Without Advance)	14.5	15	17.5	18	14.5	15
Rs. /km (With Advance)	13.5	14	16.5	17	13.5	14

Reimbursement of Shortfall distance(Km)

As per the “Own your Car” policy, reimbursement amount for fixed components (EMI/Insurance/Driver) for the balance shortfall km (km not driven in the year) is paid during the end of FY.
As the vehicle facility is provided for business travel purpose, it is encouraged to focus on more field activities and the shortfall to be reduced.
It has been decided that the shortfall of km run to be reimbursed henceforth would be capped to maximum of 10 % of total annually allowed km.

Reimbursement of Excess Km:

Any excess km beyond the limits specified maybe approved if found necessary for business purpose.
These approved extra km shall be reimbursed towards the financial year end with reduced rate that will cover the variable cost elements like fuel cost, maintenance/Tyre/battery cost.

In case of hired/rental vehicle, in exceptional conditions, prior approval has to be taken from reporting manager/HOD and the same should be forwarded to accounts during 4 wheeler expense claim.

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