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What alternatives are there to a company car?

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The company car may be a way of life for many, but there could be another option.

Alternatives for the fleet car exist and for many firms there are financial and environmental benefits to consider when weighing up the choices.

And for company car drivers there are perks to not “owning” a company car – not least the tax implications.

“There have always been a wide range of vehicle funding options – it is about choosing the right method for the situation,” says BVRLA chief executive John Lewis.

“As expected during a time of economic recovery and job creation, we are seeing a big growth in demand for flexible types of vehicle finance including rental, pool cars and flexible leasing.”

Whether you use your car to commute to the office or for long haul treks along the motorway network alternatives are out there.

Daily rental

An obvious option, but daily rental is still a very useful and viable option for many fleets.

Indeed, many rental companies have gone to extreme lengths to offer customers a range of options suited to their specific needs.

With more than 330 locations in the UK and more than 45,000 vehicles at its disposal, Enterprise Rent-A-Car is one such company.

“We have spent a lot of time this year working with organisations to review their travel policies,” says Rob Ingram, director of Business Rental at Enterprise Rent-A-Car.

“By taking a more holistic look at travel policy and planning, we help companies understand more about their travel profile and determine the best forms of business travel based on their own corporate objectives.

“Increasingly, we are helping companies define an integrated policy that utilises many forms of transport including public services, company cars, private cars and rental.”

Enterprise has also helped companies address the issue of grey fleets.

Using its Grey Fleet Toolkit, it can identify the mileage point when daily rental becomes more cost effective than private vehicle use.

This approach has improved companies’ CO2 emissions as typically the rental alternative is a cleaner and newer vehicle.

“Using the Grey Fleet Toolkit, we can identify when daily rental can become more cost effective than private vehicle use. This break-even point is obviously dependent upon a number of factors.

“However, in many instances the use of the toolkit has enabled us to work with fleet managers to identify the exact distance per journey when rental vehicles are more efficient.

"From here, limits can be put in place for mileage claims and vehicle class choice restrictions can be created to suit each travel policy.”

Pool cars

Another stalwart of the fleet industry is the pool car.

For tax purposes a pool car has to be driven/used by two or more employees and not used by any one exclusively; if the HMRC criteria are met then drivers are not liable for the car benefit-in-kind or fuel charges.

If there is a sufficient need for a fleet of pool cars and if there is enough manpower within the fleet department to make sure the vehicles are correctly maintained and serviced, then these ready-to-go cars are a viable option.

Having a pool car immediately to hand can be extremely useful.

On the downside, looking after a fleet of pool cars that are used by a variety of drivers can create more headaches than it solves.

These vehicles, like the rest of the company car fleet, have to be maintained and serviced in order to conform to duty of care regulations which can be time-consuming and financially detrimental in some instances.

Car clubs

Car clubs essentially work on a pay-as-you-drive principle and tend to be set up on a community basis so are more likely to be found in urban areas, although rural schemes do exist.

There are several UK operators and all work on a similar principle; after paying a joining fee of around £50 per year you can book a car by the hour (or half-hour) either by telephone or via the internet.

Normally cars are available at stations using smart proximity cards.

Prices are charged by the hour and/or by the mile.

Hourly rates range from £4 to £5 per hour and mileage rates can be between 19p and 25p per mile.

For heavy users or business use most companies will offer lower hourly rates.

The car club has the advantage over a pool car in that you don’t need to have the vehicle permanently parked outside the office and you can also choose the right car for the journey; so for a short town trip you might want a small city car whereas if you intend a longer motorway journey or need to move equipment from one site to another you may want a larger vehicle.


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