It found that employers in northern Europe are far more likely to offer cash over a company car than their counterparts in southern and eastern Europe.
A total of 56.9% of UK companies offer a cash alternative and a further 15.2% offer a cash allowance only.
Another 23.8% provide company cars without the option of cash and 4% reimburse expenses to drivers using their own cars.
In contrast, more than 80% of companies in Belgium, Greece, Italy and Portugal provide company cars only. This increases to 90% in Latvia, Slovenia, Bulgaria and Croatia.
Employers who offer a cash allowance without the choice of a company car were found to be rare outside the UK, Ireland and Nordic countries.The Watson Wyatt Company Car/Cash Allowance Report 2006 found a marked divide.
Anne Severeyns, senior consultant at Watson Wyatt, said: ‘The divide between northern and southern Europe on cash alternatives to company car provision is widening. This is down to two main factors.
‘The first is undoubtedly the local tax benefits of providing cash alternatives to company cars in the UK, Ireland and the Nordic area. The second is the continued and heightened status of the company car in southern and Eastern Europe. The car is simply a more coveted and important lifestyle accessory in the south and east.’
The study questioned 5,000 companies in 34 countries.
The full pan-European report is available at €1,900. For details email email@example.com. Single country formats are available.