Companies are failing to conduct regular maintenance checks on fleet vehicles, which could risk invalidating their van or car insurance policies.
According to the RAC, an inspection of 140 fleet vehicles found that 90% had one or more faults that would have either caused a breakdown, led to costly repairs, or put the driver on the wrong side of the law.
The group found that some companies were only checking their vehicles once a year, putting drivers' safety at risk and increasing fuel consumption though inefficient running.
Alan Kennedy, corporate partnership manager for RAC Inspections, said: "RAC examiners often see vehicles with damaged, worn or underinflated tyres. Faulty brakes and steering have also been identified on certain fleets - which could easily cause a serious accident."
He added that companies face high costs and prosecution by the Health and Safety Executive should an accident occur because of poor vehicle maintenance.
The RAC is advising companies to maintain regular vehicle inspections to ensure the safety of their employees and the firm's reputation.
It added: "If a vehicle does not comply with the law it is the driver who faces the penalty and the company could be exposed to negative publicity."
© Press Association 2009