I run a small specialty food distribution company in a major metropolitan market. (Minneapolis) We just hired a new on the street sales rep. I had intended to purchase a company vehicle for him to use.

He is an experienced sales person, and offered to use his newer vehicle instead.

How are other business re imbursing employee's for personal vehicle use. And what are the pros and cons.

We traditionally have supplied the vehicle. Do I need to worry about his car insurace, or do I offer to take his car into the company policy?

I have been with companies that do the "vehicle allowance" monthly of about $400/month or reimburse per milage (ex: $0.39 per mile)
I think the second option is way more lucrative for the company, unless there is a LOT of driving involved.
Insurance was always a sole responsibility of the owner of the vehicle, but it might or might not be right for your company.
Just my two cents.

Has he asked you about milage? You already offered a corporate car which he turned down. If he is important to you business then you probably should pay some for milage.

I would not pay his insurance though. I think irina's post is pretty much on the ball. I would offer milage (20-40 cents/mile) or pay a vehicle allowance. You could do something like 30 cents/mile up to $300/month so you don't shoot yourself in the foot witha 1000 mile road trip

Thank you for the feed back.

We decided to pay for his gas with a fleet gas card, and pay him 20 cents a mile, up to 300 a month.

Your responses were appreciated

Just a final note. If you would like to keep something on file as a reference, please refer to the Policy Works web site that contains per-diem rates, gas mileage reimburesements, etc.