Fleet News

‘Nightmare ahead’ over fleet cash-for-car rush

HALF of companies are expecting to introduce some form of cash-for-car scheme in the next three years – but they could be ‘sleepwalking into a nightmare’, an expert claims.

A new report suggests an increasing number of companies are moving away from offering traditional company car schemes without assessing the potential risks. And it raises concerns that this comes at a time when the Government is introducing new laws for managing at-work safety, particularly with its proposed corporate manslaughter legislation.

The ‘Cars, Cash, Care and Control’ report quizzed 200 financial directors at medium to large-sized firms and was written by Professor Peter Cooke, of Nottingham Business School’s Centre for Automotive Industries.

Cooke described the report as the most shocking he has written in 35 years in the industry. Respondents were asked about their attitudes to cash alternatives over the next two to three years.

A total of 50% said they were more likely to offer a cash alternative, 47% said there was unlikely to be a change and 3% said they were less likely to offer a cash alternative.

He said: ‘These firms are risking a double whammy. They are cashing out of their closely controlled company car fleets just as the Government is bringing in tighter standards for managing at-work road safety and proposing a new corporate manslaughter law.’

At the report’s unveiling, Cooke said he was not against firms offering their staff a cash- for-car option so long as tight controls over vehicle use were introduced.

The report says: ‘Far from making the connection between cars, cash, care and control, a high proportion of the companies surveyed did not even appear to be aware of the issues. Two-thirds did not think they needed to discuss corporate manslaughter while most said they gave fleet issues scant attention, if any at all.’

Richard Schooling, commercial director at leasing company Alphabet, which commissioned the report, said: ‘Making the right decisions about business cars has never been more important.

‘Employers need to be absolutely sure they fully understand all the options and implications before taking away company cars.

‘Some alternative schemes deliver both the cash benefits that businesses want and the control they need, others do not. Simply cashing out of company cars without due consideration – which is what a lot of firms seem to be doing – is hugely risky.’

  • Copies of the report are available by phoning 0870 5050100 or by emailing alphabet@alphabet.com.
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