COMPANY CARS
Company cars overtaken by cash
Cash is in the driving seat for an increasing number of company car policies, according to a new report from consultants Watson Wyatt.
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The report found that 28% of UK employers provide a cash allowance instead of a car, double that of four years ago. Only 23% of survey respondents offer company cars without a cash alternative, while a further 46% of employers offer the choice between car and cash. This brings the proportion of employers providing either cash instead of, or as an alternative to, a company car to 74%.
Trends across Europe
These figures are in sharp contrast to much of the rest of Europe, where the direct provision of a company car is still largely the norm. Over 70% of employers in Belgium, Greece, Italy, Portugal and most central and eastern European countries provide company cars only, without a cash alternative.
The data comes from Watson Wyatt's survey of company car policies which includes extensive information and data on company car policy across 38 countries, including, for the first time, UAE, Egypt, Saudi Arabia and Israel.
A final word
"Defining the best possible car strategy is an important challenge for many employers and our survey shows that the business of providing either cars or cash allowances as an alternative is attracting more and more attention across Europe, Middle East and Africa. For example, compared with four years ago, the proportion of employers offering cash or a cash alternative has gone up by 40% in the Netherlands and in Ireland, 32% in Germany and 24% in Sweden. However, this is partly driven by companies creating pan-European company car strategies; while employees in these countries may be offered a cash alternative, the majority will still go for the car because of tax efficiency.” - Anne Severeyns, a senior consultant at Watson Wyatt.
Want to know more?
Title: Company Car/Cash Allowance Report 2008, Watson Wyatt.
Availability: The report is available in single country and pan-European formats from Watson Wyatt Data Services, email: customerservice@watsonwyatt.com. The price of the full pan-European report is €2,000.
Watson Wyatt is the “trusted business partner to the world's leading organisations on people and financial issues”. The firm’s global services include: managing the cost and effectiveness of employee benefit programmes; developing attraction, retention and reward strategies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,000 associates in 32 countries and is located on the web at www.watsonwyatt.com.