Fleet Card

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Updated August 9, 2020

What Is a Fleet Card?

A fleet card is a type of plastic payment card, either debit or credit, that is issued to employees to pay for expenses related to vehicle operations, notably fuel and maintenance.

Payment of vehicle-related costs through a fleet card system enables a company to keep close track and tightly manage expenses related to fleet vehicles they own and operate. The company provides them to employees who operate vehicles, and the employees do not have to use any of their own funds to pay for fuel and maintenance.  

How Do Fleet Cards Work?

Fleet cards differ from corporate credit cards in that they are used solely for transportation expenses related to a company’s vehicle fleet. The company will initialize a relationship with a fleet card provider such as Fleetcor, Fuelman, or FleetCardUSA.

A company can also tightly restrict the use of fleet cards, such as designating a specific list of service stations where they can be used. The company may be able to negotiate a bulk purchase discount form those gasoline stations. Once fleet cards are issued to company employees, they are used for transportation-related expenses and managed by the company by either the transportation or finance department.

Fleet Card Example

Bob’s Auto Glass has a fleet of repair vans that cover a 100-mile radius. All of Bob’s drivers are issued a Fuelman fleet card. The drivers will use the card to refuel during their daily service calls at gas stations that accept Fuelman in their coverage area. In addition, employees could use their fleet cards for road tolls and incidental repairs on a day to day basis.
 
At the end of each month, Bob’s comptroller reviews the Fuelman bill for accuracy and pays Fuelman directly. As such, the drivers do not not account for or personally pay any of these expenses.

Fleet Cards vs. Company Credit Cards

Fleet Card Benefits

The use of fleet cards by businesses saves the company time and money, primarily by eliminating the administrative headache of employee reimbursement for fuel or mileage expenses. It also helps the business manage expenses by keeping track of expenditures through the card provider’s online and billing system.

Fleet cards also allow a business to better monitor and evaluate employee performance and behavior. Since the card is issued to an individual employee, the employee’s usage of the card can provide insight into the employee’s daily routine, work habits, and efficiency.

Fleet cards are also designed so that 100% of the benefits related to purchases, notably discounts and loyalty rewards, only accrue to the company. Benefits are usually in the form of negotiated discounts for purchases of fuel. Company employees who use the fleet card to purchase fuel will not receive any personal benefits such as free air tickets for personal travel.

Company Credit Card Benefits

By contrast, an employee holding a company credit card may rack up a massive number of air miles for travel-related expenses paid for with the company card. That employee can later cash in those air miles for their own personal benefit. Essentially, the employee will get free benefits, such as air travel, from using his company credit card. The credit card business model is structured so that only the named employee using the card, rather than the company, receive those benefits. (As a result, free air miles given to employees are essentially an added hidden cost for the company.)