But John Lewis, chairman of British Vehicle Rental and Leasing Association (BVRLA), says the flexibility of the company car still made it an attractive option.
He points out that an average saloon car costs about £350 to lease for a month, plus fuel and insurance.
But anyone wanting to travel from Reading to Newcastle on a train faces a cost of £251 for a standard open return ticket, he said. They would also face four changes of train.
‘Stack those costs and times up against the benefits of flexibility, time saving, convenience, comfort and employee motivation and the company car wins comfortably,’ he said.
‘You can argue that people can work on trains, but have you ever tried to work in a standard carriage? With the growing overcrowding problems we hear about, I just don’t think the work idea is practicable anymore.’
Low rail fares are available to early bookers, but Lewis said this was rarely an option for business travellers. He added: ‘I believe very strongly that the way the rail service is currently going is bad for individual businesses and for UK plc.’
He dismissed suggestions that fleets will widely adopt the use of train travel when measures such as road pricing are introduced.
Speaking soon after a raft of increased rail prices were announced, Lewis said: ‘There seems to be a misconception among the rail operators and government that congestion on roads and the threat of road user charges will drive the business community on to railways again.
‘It won’t. Do they really think people sit in their cars on congested roads because it’s cheap, because they like it or have nothing better to do?
‘Unless the government takes action to inform motorists of what the deal for drivers is, then it will rapidly be seen only as a stealth tax.’