Fleet News

Company cars back in action

There are signs that the return to company cars and away from cash alternatives is gathering pace.

According to a report by Market & Business Development into the UK fleet services market, the introduction of the Corporate Manslaughter Act earlier this month could lead to more employers returning to offering company cars rather than cash schemes.

The report attributes this to concerns over the lack of control that management has over private cars used on business.

“Legislative changes – the introduction of the Corporate Manslaughter and Homicide Act 2007 – will encourage many firms to return to providing company cars rather than cash-for-car schemes,” said the report.

“This is due to the fact that companies will be able to maintain greater control of maintenance and, as such, avoid being held responsible for employee deaths and being made subject to unlimited fines.”

It said that in previous years the trend by companies offering employees cash-for-car options rather than providing company cars has exerted a downward pressure on demand for fleet services.

However, this situation is changing and the fleet services market is now projected to grow year-on-year over the forecast period to a peak of £12.96 billion (at 2007 prices), which equates to an overall real-term increase of 9% compared with 2007.

The report suggests that the trend towards outsourcing fleet services will continue as firms “continue to focus on core activities”.

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