Survey finds company car fleets in decline

COMPANY CARS

Survey finds company car fleets in decline

Company car provision may at last have reached "tipping point", with new research by Incomes Data Services showing a marked fall in fleet sizes.

IDS reckons the change is being driven mainly by the decision of more of those employees who are entitled to a company car to take a cash allowance instead.

The key research findings are:

• Among the companies surveyed, the size of the average car fleet has dropped from over 1,500 vehicles in 1999 to just over 1,000 in 2005.
• The decline in fleet size is primarily the result of more employees opting for cash. When cash alternatives first started being offered over a decade ago, around 10% of eligible employees opted for them on average. By 2003 the proportion choosing cash had climbed to around 30%, and in 2005 the average has risen further to 39%.
• The median value of cash allowances ranges from £4,500 a year among the most junior staff entitled to a company car to a median value of £8,600 at the most senior management levels.
• Employees generally become eligible for a car based on their job status at a salary of around £34,600, while employees who qualify on the basis of job need typically have to be driving around 10,000 miles a year on business.

What you will find in this report

This new 127-page report from IDS brings you practical analysis of company car policies operated by a broad range of organisations in the UK, enabling you to assess how your own policies compare. The report analyses key issues including: methods of fleet acquisition, the rise of contract hire and moves towards personal contract plans eligibility and allocation policies, including issues such as contributions towards private use cash alternatives and policies enabling individuals to trade up or down issues surrounding insurance and fuel allowances health and safety aspects of company car provision.

Case studies The case studies of policies in 29 named organisations cover the spectrum of practice. These include organisations that have bought out all company cars, as well as those with a range of policies on individual choice and flexible options.

Visit www.incomesdata.co.uk/mpr/carcont.htm to view the report's contents.

A final word

Want to know more?

Title: Company Car Policies 2005/06, Incomes Data Services.

Availability: To order your copy contact customer services at Incomes Data Services in London, tel: 020 7324 2599.

IDS is a leading UK information and research service on employment issues, providing a range of publications for employers, unions, government departments and other agencies. To find out more visit www.incomesdata.co.uk

Posted 6 September 2005