“A lot of people have recognised that the car they can get within their banding is better than what they can source on the open market,” says Weston.
“We’ve seen around 160 people move from cash to car in the past couple of years.”
The cash scheme is designed to be cost neutral to the company and its employees and reflects the wholelife cost of the car based on a four-year/100,000-mile operating cycle.
The scheme has been made more flexible which has helped contribute to the renewed interest in the company car scheme.
Cash takers previously had to commit to the same four-year cycle; now they can change their minds on an annual basis.
The car choice list gives them plenty of options with 17 manufacturers and around 2,700 make/model derivatives.
“We work closely with manufacturers and dealers and we are open about our purchasing plans,” says Weston.
“We are in a position to provide volumes and the employee band splits.
"Some manufacturers work well to provide discounts to bring their cars into those brand entitlements.”
Two years ago Home Retail Group switched from an annual review of its selection list to a bi-annual review.
This gives manufacturers that were less flexible on discounts the opportunity to revise their position.
“Our mid-segment car used to be a BMW 1 Series, Mercedes-Benz A-Class or Ford Mondeo,” says Weston.
“Now it is BMW 3 Series and Mercedes C-Class because of the manufacturers’ understanding of positioning. This comes from our openness.”
This candid approach to business relationships has been facilitated since the funding policy was homologised. Home Retail Group used to operate a dual approach of leasing and outright purchase, a result of legacy business when it acquired Homebase four years ago.
Its Argos fleet was outright purchased, but Homebase was leased.
Three years ago it undertook a funding review with a view to creating a single policy.
The six-month process included a tender approach with finance houses and investigated every funding option.
Outright purchase was the clear winner.
“It’s better to employ our capital than to pay the interest of funding through a finance house,” says Weston.
“We work closely with procurement and finance and the deciding factor is the cost of working capital.”
With an estimated fleet asset value of £30 million, controls on the funding process are critical. Home Retail Group’s wholelife cost scheme is another in-house development by the fleet team.