Fleet News

Cash alternatives fail to tempt staff away from company cars

EMPLOYEES will not give up their company cars despite the availability of cash alternatives, according to a survey of 391 UK companies by London-based Hay Management Consultants. Its Company Car Guide reveals that 90% of British employees offered a company car because of their job status take up the offer, despite organisations offering a choice of cash alternatives, including lump sum payments, salary increases and fixed allowances.

In addition, the survey reveals that for the majority of employees, company cars offer little or no tax advantage, and suggests that company cars only become tax effective when employees exceed either the 2,500 or 18,000 business mile tax thresholds and clock up a high private mileage.

Peter Jauhal, managing consultant at Hay, said: 'The results of the survey demonstrate that despite the virtual tax neutrality of company cars, most employees still choose a car because of its perceived status and convenience. The trend towards organisations providing more flexible car benefits has contributed to the high percentage of employees accepting the offer of a company car.'

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee