Fleet News

Dual benefits of a cash-for-car switch

A FIRM’S switch from a company car scheme to a cash allowance system has cut both insurance premiums and accident rates.

James McNaughton Paper Group believes its drivers take fewer risks, treat their cars better and have fewer accidents as they perceive the cars belong to them, even though the company still insures the vehicles on their behalf.

The paper supplier did not anticipate the cuts when introducing an employee car ownership (ECO) scheme through its contract hire and leasing supplier, Alphabet, almost two years ago.

With the help of cash allowance scheme specialists the Miles Consultancy, the company has just 12 company-owned cars left while the remainder of its 250 drivers are signed up to the ECO scheme.

Group finance director Ian Pinks hailed the scheme as an outstanding success. He said: ‘We were not looking to reduce the cost of running our fleet, although we will gladly take the benefits of reduced insurance premiums and accident costs, plus lower NICs, tax savings and reduced administration costs, but we have also been able to give our employees greater choice of vehicle and reduced tax liabilities.’

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