Company Car in Action 2021 Event Theme: The Rebirth of the Company Car

Why this theme, and why now? 

Several factors are combining to provide a significant boost to the company car sector. Electric vehicles, low BIK rates, reduced mileages and a revival in salary sacrifice and affinity schemes are encouraging cash takers to return to company programmes while offering non-qualifying employees the chance to buy a new car via company-negotiated benefits packages.

We see company car becoming a broader term for company-provided vehicles, either via a traditional company lease scheme, salary sacrifice or via a company affinity scheme for other employees.

The people responsible for tendering the contracts, doing the supply chain management and setting up and running the schemes are our readers, whether that’s traditional fleet managers or HR/benefits staff, an area where we are planning to grow our penetration (you’ll see more evidence of this at this year’s Fleet & Mobility Live).

With current BIK at 0% for BEVs and 2021/22 BIK rates at 1%, rising to a maximum of 13% for plug-in hybrids, it is no surprise that EV registrations at an all-time high. Last year, BEVs accounted for 6.6% of the total new car market (PHEVs 4.1%) after a 186% year-on-year increase in registrations – 68% of these were company cars.

This year, sales are already up by another 49% compared to 2020 (PHEVS +35%).

Meanwhile, leasing companies are increasingly targeting non-qualifying staff with an array of company-based affinity and PCH schemes, including Lex Autolease, Arval, LeasePlan, Alphabet, Zenith and Arnold Clark.

Private/retail now accounts for 18% of the FN50’s car risk fleet, up from just under 13% in 2018, reflecting the increasing popularity of PCH products.

Industry commentary 

Growth in the traditional company car 

• Wayne Warburton, head of mobility, Siemens: “Most people took cash because it was right for them at the time, but they are now seeing the benefits of the car, particularly with electric, and there is a natural movement back to the company scheme. Ten years ago, we had 3,000 cash takers; now we have 1,200.”

• Paul Hollick, chair of Association of Fleet Professionals: “The company car remains a highly effective tool for businesses and, in many instances, the only viable transport option. Many employers are committed to changing the transport on which they depend to EVs. They know that drivers who give up their company car for a cash option are likely to choose an older, more polluting model. There are strong CSR reasons for retaining company cars.”

• Rob East, general manager corporate sales, BMW: “We are seeing an appetite for more people to return to the company car – 72% predict their fleet sizes will increase over the next three years as people opt back in. It is definitely not the death knell for the company car; there is a compelling reason to take an electric vehicle or PHEV and we are seeing people opt back in after two or three cycles of taking cash.”

Growth in salary sacrifice 

• David Raistrick, senior manager at KPMG: “Now is really the time to think about sal/sac – they should really take off again.”

• Christopher Caddick, head of business development at JCT600 VLS: “We are seeing a resurgence of salary sacrifice, especially at the management and senior management level.”

• Shaun Sadlier, head of consultancy, Arval UK: “EV and ultra-low emission cars are an attractive option for employees via salary sacrifice. We expect to see numbers grow over the coming years.”

• Paul Gilshan, chief executive officer at Tusker: “Salary sacrifice is key to making BEVs affordable for the average British motorist.”

With such significant changes occurring in the sector, now’s the perfect time to find out more at Company Car in Action, with unbeaten access to the leading manufacturers and suppliers in fleet vehicles.

Register here for free and secure the opportunity to make important decisions about which electric models could be right for your fleet on 23-24th June.