Over the past five years, the number of employee cars used on business has grown from an estimated 1.6 million to more than 2.1 million and it is likely to remain at more than two million for the next five years.
Only a fraction of this growth could be explained by the growth in employee car ownership schemes, with the rest being accounted for by drivers simply taking a basic cash option and handing back their company cars.
The figures are revealed in a major survey carried out by the British Vehicle Rental and Leasing Association in association with the International Car Distribution Programme.
It breaks new ground in identifying the size of the business car market, covering both company cars and the number of cars used by drivers on business. A total of 999 companies were interviewed, covering firms ranging from one employee to more than 500.
The survey revealed that among the 1.2 million bus-inesses with employees operating in the UK, there are an estimated 2,819,000 cars purchased either for drivers or vehicle pools, with a further 1,937,000 contract hire vehicles, creating a total fleet car parc of 4,756,000 cars. Combined with 2,125,000 cars that are employees own vehicles, one-third of the total, the UK business car parc totals 6,881,000 cars.
But despite owner drivers being revealed as the backbone of business driving in Britain, the majority of companies say they are more than happy with their fleet policies.
Businesses said their current company car and business travel policy was cost effective, fulfilled the firm’s needs and was better for employees. Companies placed a different emphasis on key areas depending on their size, the report said.
It added: ‘The most widely expressed reason for current policy, given by decision-makers in all sizes of business, is that it is the most cost-effective approach.
‘Having greater control is identified by larger businesses, those purchasing vehicles outright, users of daily rental and those managing the fleet internally.’ More than 50% of fleets of all sizes said there were no disadvantages to their current policy, with smaller fleets the most happy with their current arrangements.
The BVRLA research helps to identify a potential cause of the 250,000 fall in the number of tax-paying company car drivers over the past few years.
The report also asked fleets to predict what changes to travel policy they will be making over the next five years.
More than 60% of firms with less than 50 employees said there would be no changes, but larger companies said there would be even more availability of a cash alternative, which could see the number of private drivers on business increasing further.
Large companies with more than 500 employees were most likely to head down the route of employee car ownership schemes.
Large companies are also the most positive about investigating alternative fuels.