By RAM Tracking on 4 Mar 2026
By Michael Hoyle, Head of Account Management, RAM Tracking
Managing grey fleet vehicles is one of the most overlooked challenges in Canadian fleet management. If your employees use their own vehicles for work-related travel, you already operate a grey fleet. And whether you know it or not, you are legally responsible for managing it.
Yet for many businesses, grey fleet sits in a blind spot between HR, finance and operations, with no clear owner and no formal policy.
This guide covers what grey fleet is, why it matters, and the practical steps you need to take to manage it properly.
A grey fleet consists of privately owned vehicles used for business travel. When an employee drives their own vehicle to a construction site, a field service call-out, a client delivery, or a sales visit, that vehicle becomes part of your grey fleet.
Unlike company-owned or leased vehicles, grey fleet vehicles are bought by the employee and reimbursed on a cents-per-kilometre basis. This sometimes covers fuel, maintenance, and insurance costs too.
The vehicle stays in the employee's name, and they are responsible for keeping it roadworthy and their license valid. The key distinction from a company fleet is ownership.
From a legal and safety perspective, however, the obligations on you as an employer are exactly the same. Your duty of care does not change based on who owns the vehicle and it is your responsibility to verify, and document, that those standards are actually being met.
Driving is the most dangerous thing most employees do at work. Grey fleet vehicles tend to be older and less well maintained than company vehicles, which increases the risk to drivers. Newer vehicles carry more advanced safety features and higher NCAP safety ratings. When you are not specifying or checking the vehicles your employees drive for business, you have no visibility over those risk factors.
In Canada, occupational health and safety legislation is primarily governed at the provincial level, with federally regulated industries covered under Part II of the Canada Labour Code. Across all jurisdictions, employers have a clear duty to take every reasonable precaution to protect workers, and that duty extends to employees driving their own vehicles for business purposes.
Under section 217.1 of the Criminal Code of Canada, anyone who directs the work of others has a legal duty to take reasonable steps to prevent bodily harm. Where a death results from a work-related journey and criminal negligence is proven, penalties can be severe.
Ignorance is not a legal defence. If your employees are driving their own vehicles on company business without a formal grey fleet policy in place, the business is exposed.
The costs of a poorly managed grey fleet add up quickly. Mileage reimbursement is often the most significant line item, and without controls, it tends to be inaccurate. The Canada Revenue Agency (CRA) sets prescribed rates for business travel reimbursement, 70 cents per kilometre for the first 5,000 kilometres and 64 cents per kilometre thereafter. A driver covering 20,000 business kilometres per year costs over $12,700 in reimbursement alone. Without proper auditing, those figures are rarely accurate.
Beyond that, failing to document mileage claims and license checks creates risk in the event of a CRA audit.
Maintenance and vehicle standards. You have no direct control over how grey fleet vehicles are serviced, insured, or maintained. Without a checking process, you cannot know whether the vehicles your employees drive for work are roadworthy.
Insurance. Standard personal auto insurance in Canada does not automatically cover business use. Requirements also vary by province. Every grey fleet driver must hold a policy that includes business use cover, and it is your responsibility to verify this, not assume it.
Mileage costs. At CRA prescribed rates, high-mileage grey fleet drivers represent a significant and often unexamined cost. For drivers covering substantial business kilometres, a company vehicle or car allowance arrangement may represent better value overall.
Compliance and record-keeping. Without a formal process, driver license checks, vehicle inspection verifications and insurance confirmations slip easily. You may simply not know who is driving on your behalf, in what vehicle, and whether they are legally permitted to do so.
The most common reason grey fleets are mismanaged is that no one owns them. Assign a named individual, typically a fleet manager, or a combined effort from HR and finance, to take responsibility for grey fleet policy and compliance. Lack of a named owner is no defence if the business is prosecuted for a duty of care breach.
Before you can improve things, you need to understand what you have. Find out who your grey fleet drivers are, what vehicles they are using, how much business mileage they cover, and who is authorising travel and approving claims. If gathering this information proves difficult, that in itself signals a gap in your record-keeping that needs to be addressed first.
A grey fleet policy should cover three areas: the driver, the vehicle, and the journey.
The driver. Check driving licenses at least annually. Verify that every grey fleet driver holds business use insurance and has breakdown cover in place. For drivers covering significant business kilometres, driver risk assessments are worth considering.
The vehicle. Set minimum vehicle standards. Seven years is a commonly used maximum age benchmark, with many organisations also setting a CO2 limit and minimum NCAP rating. Require employees to confirm their vehicle meets any applicable provincial inspection requirements, and to present their insurance policy and driving license before first driving on business, and annually thereafter.
The journey. Implement a travel hierarchy. Before any journey is made in a personal vehicle, ask whether it could be done remotely, whether public transit is suitable, or whether a rental vehicle makes more sense for longer trips. Line managers should be responsible for confirming each journey is necessary.
Changes to travel and expense policy can meet resistance. Bring employees into the process early, communicate the reasons clearly, and make it straightforward to comply. A signed policy declaration confirming each driver has read and understood the policy creates a clear audit trail.
Grey fleets need the same active management as a company-owned fleet. That means ongoing monitoring, periodic spot checks, and prompt follow-up when compliance gaps emerge. Annual checks built into staff appraisals are a useful baseline, but not sufficient alone. Drivers can lose their license or let insurance lapse between reviews.
Grey fleet tracking applies vehicle monitoring technology to privately owned vehicles used for business purposes. It gives businesses better visibility over business journeys, mileage data, and driver behaviour, all of which support compliance and cost control.
Vehicle tracking software provides real-time journey data that makes mileage auditing straightforward and accurate. Dash cams add an additional layer of protection, capturing footage that can be critical if an incident occurs involving a grey fleet vehicle.
Digital inspection tools allow drivers and managers to complete and record structured pre-use checks before every journey, creating a documented audit trail that demonstrates duty of care in practice.
Managing a grey fleet isn't just about ticking a compliance box. It gives you clearer visibility over business travel costs, protects your business legally, and ensures every driver on the road on your behalf is doing so safely.
Implementing the right technology reduces the administrative burden of license checks, mileage auditing, and vehicle inspections, while improving accuracy and creating a documented audit trail that demonstrates duty of care.
Ready to get better control of your grey fleet? Contact us for a free, no-obligation quote to see how RAM Tracking can give you complete journey visibility, accurate mileage data, and peace of mind.
Michael Hoyle is the Head of Account Management at RAM Tracking, where he leverages over 7 years of industry experience to drive customer success and operational excellence.
With a deep understanding of job management solutions and fleet tracking technology, Michael has established himself as a trusted leader in the telematics space.
His customer-centric approach and analytical mindset have helped countless businesses optimise operations, reduce costs, and improve efficiency.
A company fleet consists of vehicles owned or leased by the business. A grey fleet consists of privately owned vehicles driven by employees for business purposes. The employer's duty of care applies equally to both.
Yes. Under provincial occupational health and safety legislation and section 217.1 of the Criminal Code of Canada, employers have a duty to take reasonable steps to protect workers regardless of vehicle ownership. Grey fleet vehicles must be managed as diligently as company vehicles.
Grey fleet drivers must hold an auto insurance policy that includes business use cover. Standard personal insurance does not automatically cover business journeys, and requirements vary by province. Employers should verify coverage for every grey fleet driver before they drive on business.
Start by auditing mileage claims against CRA prescribed rates and ensuring kilometres claimed are accurate. Implement a travel hierarchy to reduce unnecessary journeys, and consider whether high-mileage drivers would be better served by a company vehicle or structured car allowance.
Grey fleet tracking applies vehicle telematics to privately owned vehicles used for business. It enables businesses to monitor journey data, mileage, and driver behaviour, supporting compliance, cost control, and duty of care documentation across the grey fleet.
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