COMPANY CARS
Business clamp down on company car policies
Pressures to control costs and environmental damage are causing businesses to put greater restrictions on company car policies, according to PricewaterhouseCoopers.
While the number of companies offering a car benefit has remained fairly static over the last five years, increasing limits are being placed on vehicle choice and replacement timeframes.
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PwC’s Company Car UK report shows that:
21% of respondents intend to reduce the choice of car available
15% of firms plan to provide cheaper cars
one in four companies are planning to extend lease periods
37% of companies have placed a CO2 emission limit on car choice
over a third (36%) of companies restrict choice to diesel only.
Restrictions have also been imposed on certain types of car due to safety concerns. For instance, 79% of respondents have placed restrictions on sports cars and 76% on convertibles. The greatest rise in restrictions has been for petrol turbos (45% of companies, up 5% on last year); four-wheel drive cars (34%) and people carriers (14%), both up 4% on last year. These restrictions are likely to be driven more by the green agenda.
Generally, the greatest rise in car choice restrictions has been among financial services firms.
Cost-cutting measures
Overall, managing costs is the main area of focus for 87% of respondents over the next year, while controlling CO2 emissions is the priority for 57%. As well as extending lease periods and limiting car choice, other planned cost-cutting measures include reallocating leavers cars (41% of respondents). There has also been a steady decline in those companies offering cash allowances only, from 10% in 2006 to just 4% in 2010.
Environmental issues
The importance of environmental issues is demonstrated by 40% of respondents now having a green transport plan. As part of this plan, 53% of companies provide or are considering providing alternative fuels, with three-quarters of those that gave details stating hybrid cars as the alternative.
Matthew Hunnybun, employment solutions partner at PricewaterhouseCoopers LLP, said: “Electric cars and vans are going to become an increasingly significant part of company car policies now that they are exempt from company car tax. The company car is here to stay, it’s just the type of car that is evolving.”
Other green transport initiatives being promoted include:
cycling to work - 62% of respondents help towards the cost of a bicycle and 16% provide safety equipment.
car sharing - encouraged by 40% of businesses
avoiding travelling altogether - being assisted by some companies
working from home – allowed by 42% of respondents
video conferencing – enabled by 76% of respondents.
A final word
“Company cars remain an important benefit in many businesses, reflecting employees’ needs and wants. For those companies with a large mobile sales force, cars are clearly essential to the business. However, companies are balancing these requirements with the continued need to reduce costs and environmental impacts, as part of their corporate responsibility agenda. The two goals go hand in hand, thanks to various cost savings related to greener car policies.” - Matthew Hunnybun, employment solutions partner at PricewaterhouseCoopers LLP.
Want to know more?
Title: Company Car UK report, PricewaterhouseCoopers, August 2010.
Survey sample: Data is based on information submitted by 167 companies with revenues ranging from £1 million to over £35 billion.
Availability: Call PwC’s main switchboard number on tel: +44 (0) 20 7583 5000.
PricewaterhouseCoopers provides “industry-focused assurance, tax and advisory services to build public trust and enhance value for our clients and their stakeholders”. Visit PwC’s UK web site at www.pwc.com/uk.