Fleet News

'Fleets will rise under new system'

THE arrival of CO2-based company car tax in 2002 will lead to a surge in demand for company cars as the attraction of a cash alternative is reduced, according to fleet management specialist Godfrey Davis. New tax rules will scrap the mileage-based system in favour of one focusing solely on carbon dioxide emissions, so there will be no financial penalty for users of perk cars with low mileages.

Nigel Underdown, director of marketing for Godfrey Davis, said: 'The take-up of cash for car is very low, less than 4% where offered, and when taken it is normally low business mileage drivers wishing to reduce their tax burden. Under the new proposal, the tax paid by a low mileage driver using a lower medium sector vehicle, who makes a careful, informed selection could be halved and many drivers who previously elected for cash, or are considering it, could well reverse this option and re-register for a fleet car.'

He added that although high mileage drivers could face increases in their tax bills, they would still remain with their cars because they still considered the hassle-free benefit worth the potential extra tax.

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