Fleet News

Green policies boost diesel - and bicycles - report finds

THE importance of the environment is growing in significance to the fleet market with an increasing number of companies focussing on them when developing car policies.

A green transport policy has been introduced in nearly a quarter of companies (22%) and car sharing is encouraged in over one third (40%) of companies, according to the annual guide to company car policies by the PricewaterhouseCoopers LLP reward survey business, Monks.

‘Company Car UK’ has gathered data from 188 companies who between them manage over 81,000 cars.

The report covers car availability, car allocation policy, flexibility, cash allowances, fuel provision, mileage allowance, fleet policy and taxation.

In addition to environmental issues, it also finds that the health and safety of employees is paramount in the development of company car policies.

Over half (51%) of UK companies are preparing for the new anti-smoking laws and nine out of ten companies now have a policy regarding mobile phone use in cars.

Gary Hull, director of employment solutions, PricewaterhouseCoopers LLP, said: ‘Company car policies in UK companies are continuing to evolve with many companies now taking environmental pressures and road safety into account even more so than before. This will have to be recognised by providers as the need to ensure that employees have access to, and are encouraged to take up, green transport options increases.’

Other key findings of the report include:

Green transport policy – Over a quarter of companies (27%) are now restricting choices to diesel engine cars. Since the changes to company car taxation were introduced in 2002 there has been a move towards diesel-engined cars as a more environmentally friendly power source, with the added advantage of lower fuel consumption.

Around half of all companies (48%) now encourage employees to cycle to work with over three quarters of these companies (76%) providing showers and the same proportion (76%) providing secure parking.

Policies that encourage the use of public transport are now used by 39% of companies and are most common in the largest companies.

Health and safety - Many companies now have guidelines for work-related safety with over 90% of companies now recognising the need to communicate with employees about mobile phone use in cars and 80% of companies conducting driving license checks of employees who drive for company business.

Car availability – The typical salary at which a car is provided as a standard benefit has continued to rise and is now £35,000. This has risen from £33,500 in 2006. The percentage of companies which provided a choice of company car or cash allowance in lieu of a car, or provide a cash allowance only, has increased steadily over the last ten years from 62% in 1997 to nearly 90%.

Fuel provision and mileage allowances – There has been a decrease in the number of companies providing all fuel for private use. In 70% of companies some drivers have elected not to receive fuel for private motoring.

Mr Hull said: ‘In his March 1998 Budget, the Chancellor of the Exchequer said that is was his intention to discourage employers from providing, and employees from accepting, free fuel. The consequent increase in the taxation of the provision of fuel for private use has therefore meant the benefit has become less desirable for many employees. A number of companies are therefore introducing a policy whereby the provision of fuel for private motoring is an optional benefit.’

Car allocation policy – It is clear that most company car drivers have a choice over the car they drive. While 65% of chairmen will have a choice of any car, only 35% of sales representatives do. Companies are also placing restrictions on where their cars are manufactured, Japanese cars manufactured in the UK are accepted by 81% of companies and 59% of companies will accept cars from other far eastern manufacturers.

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