Reading the thread on the mileage vs. rent has been quite interesting. Having had the misfortune to be the "bean-counter" on the other side the equation, my experience is that employees gaming the system have no issues until
a: they are in an accident
b: their vehicle is vandalized while on company business
c: there car is stolen
The reality check that occurs is often very sobering. The first shock may come when their insurance company refuses the claim because they forgot to notify the insurer that the vehicle is being used for business purposes, usually followed by discovering that the insurance repayment is not enough to cover the actual losses. Remember everyone the "mileage" allowance that government gives for reimbursement includes an element for insurance coverage along with depreciation, wear and tear.Yes I have experienced the above issues and the very unpleasant conversations that follow. In the U.S. I have seen instances where the employer requires the employee have their insurer name the employer as an additional insured on their policy thus fulling transferring risk of loss completely to the employee.
My experience is that once employees find this out they suddenly insist that the company rent cars for them if they are on company business. Usually it occurs after a significant out of pocket expense they have incurred.