The new product is called Ingenta and is designed for fleets of between 50 and 300 cars. It involves company car drivers technically acquiring their cars through a credit sale agreement, thereby avoiding benefit-in-kind taxation.
In other respects, however, the scheme replicates the look and feel of a traditional company car, providing employees with an all-inclusive motoring package ranging from insurance to maintenance, servicing, road taxes and breakdown cover.
Mike Baldry, managing director of Alphabet, said: 'Apart from the fact that they own the vehicle, the experience for drivers is little different from that of running a company car. A deposit is not required and they can sell the car back to Alphabet at the end of the contract, removing residual value risk.'
He claims up to a quarter of the UK's company car drivers could become 'owner drivers' by 2007, and Alphabet has already introduced ECOP schemes into the John Lewis Partnership, Royal London Mutual Insurance Society, and Norwich & Peterborough Building Society.
'For employers, the new tax system comes at a time when more companies are questioning traditional methods of providing employees with a business motoring solution. In some instances, it will take the total salary, tax and National Insurance Contribution burden on employers to nearly 55% of the cost of the vehicle per year,' said Baldry.
'Such costs are clearly commercial nonsense, which is why so many employers are looking for more efficient ways to provide cars.'