It’s the dream of a lot of employees and entrepreneurs: A company car, which can be driven on the expense of the company and therefore saves a lot of money. However, this dream often times doesn’t add up.
In Germany the tax authority distinguishes between private and business trips. Business trips are generally tax deductable, but private trips are not. In order to ensure proper taxation, company car drivers can choose to pay a fixed monthly tax which allows them to use the company car for private trips as much as they want to. However, depending on the car and your income this can be very expensive.
Besides fixed monthly tax, the only other option is to document every trip you make in order to determine the amount of private trips you made. Then you simply have to pay tax on the actual costs of those private trips while still enjoying the full tax deductions of your business trips. However, the tax authority is pretty strict about the documentation of the trips – a simple excel sheet won’t do because it is not safe against manipulation. So for every single trip you are supposed to note down the date, mileage, origin, destination and purpose by hand in a booklet, which is, according to the tax authorities, less prone to manipulation .
Since this task is as painful as it sounds, many ventures have tried to tackle the issue. With roughly 5 million company cars registered in Germany  a more convenient solution should attract enough customers. For example BMW and Mercedes offer logbook solutions for their new models [3,4]. For most of the other manufacturers I was not able to find a logbook solution.
However, this blogpost focusses on solutions that can be used with practically any car, because the amount of cars with a logbook solution straight out of the factory is still negligible and the solutions currently only come with expensive options. So even if you are buying a new BMW, a separate logbook solution might be the better deal.
In the following paragraphs I will have a look at three different solutions which are differing in price, reliability and ease of use. According to the developers, they all comply with the tax authorities guidelines and are therefore not manipulable.
App-only solution – Driverslog Pro 2
This is one of the logbook apps with the highest ratings in the iOS App Store and also available for Android devices. (Driverslog Pro 2) A business licence is pretty affordable and costs 1,99€ a month or 14,99€ a year. By enabling you to document your trips digitally, this is already a huge leap forward compared to the pen and paper approach. You can save highly frequented addresses, business partners etc. to make the tedious process of filling in trip information less tiring.
Additionally, the app lets you track the route you are currently driving using the phone’s GPS data which results in typical battery drainage. Since you are in a car, charging your phone shouldn’t be an issue, though. Nonetheless, this feature doesn’t really make sense to me since all you need for the logbook concerning your location would be the origin, the destination and the mileage before and after the trip, which can easily be read from your odometer.
The only problem with this kind of solution is that you still can forget to document a trip at all. This won’t result in your logbook colliding with the tax authorities’ guidelines and ruining your tax advantage altogether, but the trips will consequently be counted as private ones and therefore result in more taxes.
This is not due to bad implementation of the Driverslog Pro 2 app, but rather due to the technologies limitations. Your smartphone simply can’t distinguish between your car or the car of a friend, a cab etc. Therefore, an automatic logging based on a GPS trigger wouldn’t work and an app-only solution is only useful to rather diligent users who update their logbook on an almost daily basis or even better after each trip. In my experience, this is quite unrealistic because often times you are in a hurry and simply forget to do it.
OBD2 device connected to a smartphone – PACE Link One
PACE Link One uses the car’s OBD2 interface, which is present in all cars which were built from around 2004 onwards . It is kind of like a USB interface for computers and mainly serves to transfer data from the car. Through this interface, PACE can gather further information about the car. The only relevant information for the logbook function would be the odometer reading. PACE Link One costs 119€ without any further running expenses. which might make it more attractive to people who dislike subscription based payment. The OBD2 device only provides the smartphone with data from the car via Bluetooth and the actual logging happens in the app. Therefore the app has to be opened at the beginning of each trip. In case you forget to open the app or the OBD2 device fails to connect to your smartphone, you can still document the trip afterwards in the app.
This leaves us with the same problem as with the app-only solution and besides the automatic odometer reading this provides no further benefit for the documentation of a logbook.
Standalone OBD2 device – VIMCAR
VIMCAR’s OBD2 device comes with its own SIM card, which enables it to operate independent from any smartphone or or any other device. It logs the trips by itself without the user having to take any action. Nonetheless, the device of course cannot know for sure whether a trip is a private or a business trip. In case of a business trip, the user still has to enter the trip’s details such as the trip’s purpose and the visited business associate – the date, odometer, origin and destination is already filled in by VIMCAR.  The smartphone app reminds you to fill in missing trip information in case you haven’t done so within seven days.
For managing a company’s fleet, VIMCAR can help the fleet management by keeping track of all car’s locations, odometers etc. The location of the car’s and the trips details will however only be visible to the fleet management for business trips only.
I have myself used a device with similar functionality, which was provided by my insurance. I don’t want to write about this device in further detail because it is limited to the AdmiralDirekt.de GmbH insurance and therefore not universally usable by everyone. My point is, that it and therefore also the VIMCAR product is missing a crucial feature. Although each trip’s details such as the date, odometer, origin and destination is documented, it still is hard to remember what the purpose of a certain trip was after seven days. The app should send out a push notification shortly after arriving at each destination, so you are reminded to enter the details. I have contacted VIMCAR on behalf of this issue and they ensured me that they are working on it and that it will be part of their product soon.
For 18,92€ a month VIMCAR is arguably pretty pricey, but considering the potential tax savings and the ease of use it might be a good deal for a lot of users.
My solution for the lack of instant push notifications is to use geo fencing on my smartphone using the most relevant locations like my home or the university. Whenever I arrive at one of those locations I am reminded to enter the trip’s details.
Sources (retrieved at the 8th of October 2017):
 NWB Datenbank (2006). Anforderungen an ein ordnungsgemäßes Fahrtenbuch. Retrieved from http://www.dellbruegger-beck.de/fileadmin/user_upload/PDF__s/Anforderung_an_ein_og_Fahrtenbuch.pdf
 Statista (2017). Pkw-Bestand in Deutschland nach Haltergruppen. Retrieved from https://de.statista.com/statistik/daten/studie/154574/umfrage/anteil-gewerblicher-pkw-in-deutschland-nach-ausgewaehlten-haltergruppen/
 BMW. Dokumentation leicht gemacht. Retrieved from http://www.bmw.de/de/topics/faszination-bmw/connecteddrive/digital-services/online-fahrtenbuch.html
 Mercedes. Mercedes me connect. Retrieved from https://www.mercedes-benz.com/de/mercedes-me/konnektivitaet/
 Wikipedia (2017). On-Board-Diagnose. Retrieved from https://de.wikipedia.org/wiki/On-Board-Diagnose#Aufteilung