A NEW report suggests that more than half of all employers are now offering company drivers the choice between a car or cash allowance.

And it suggests a fifth of all eligible company car drivers have opted for a cash option.

Research compiled by global consulting firm Watson Wyatt found that 57% of the 700 companies it quizzed now offer employees eligible for a car the choice of a cash alternative. This is a rise from 46% in 2000 and 38% in 1998.

It also found a 'sharp decrease' in the proportion of employers offering company cars only, without a cash alternative. Only 28% offer cars only, compared with 54% in 2000 and 70% in 1998, the latest biennial survey found.

Those companies which only offer a cash allowance totalled 15% in the latest survey, 12% in 2000 and 4% in 1998.

'The cash alternative has become increasingly attractive to employers and employees alike as the tax burden on cars has increased,' said Watson Wyatt consultant Philip Hough. 'While this has been a consistent trend across all categories of employee, the cash alternative has become particularly popular with non-sales roles where company cars are often primarily seen as a perk rather than an essential tool.'

Hough said sales executives 'appear to be the last bastion of the company car only approach'. He said the results of the survey show that a fifth of employees working for the companies questioned had opted for a cash option.

The findings come from Watson Wyatt's biennial European-wide survey of company cars, which includes information and data on company car policy and practice across 36 countries.

The report is available in single country and pan-European formats on 01737 273822, or email kelly.fleming@eu.watsonwyatt.com, priced at £870 for the full European report and £315 for the UK only report.