Fleet200 meeting 2023

Company cars continue to be an emotive subject for employees, but rising vehicle prices mean they may not be eligible for the same vehicles they were several years ago.

This is because many organisations have not reviewed their choice lists, fuelling a shift towards cash allowances once again.

“Ten years ago a lot of companies were pushing out cash allowances, but we’re kind of seeing it coming back in again and I think a lot of that is to do with the actual cost of the vehicles,” said one delegate at the Fleet200 Strategy Network meeting this month.

“You have your companies who set their bandings for their company car schemes about five or six years ago, but perhaps haven’t realigned their bandings to the current market situations.

“This means a driver who was able to get a BMW 3 Series, which you could deem to be a standard company car, is no longer able to get one. This is why people are looking at cash allowances so they can get the car they want.”

Another added: “I find that whatever way you introduce, the drivers want the other way.”

Fleet200 meeting 2023

Company cars continue to be an emotive subject for employees, but rising vehicle prices mean they may not be eligible for the same vehicles they were several years ago.

This is because many organisations have not reviewed their choice lists, fuelling a shift towards cash allowances once again.

“Ten years ago a lot of companies were pushing out cash allowances, but we’re kind of seeing it coming back in again and I think a lot of that is to do with the actual cost of the vehicles,” said one delegate at the Fleet200 Strategy Network meeting this month.

“You have your companies who set their bandings for their company car schemes about five or six years ago, but perhaps haven’t realigned their bandings to the current market situations.

“This means a driver who was able to get a BMW 3 Series, which you could deem to be a standard company car, is no longer able to get one. This is why people are looking at cash allowances so they can get the car they want.”

Another added: “I find that whatever way you introduce, the drivers want the other way.”

One fleet, which has a 50/50 split between cash allowance and company car drivers, offers the allowance to employees such as senior managers, which business-need drivers are provided with a vehicle.

“Because we allow a trade up on the fleet as well, there’s never going to be a point where our cash allowance is the same and people are always going to complain about that,” he said.

“If vehicle costs keep increasing, you could get to the point where drivers are contributing 50% on top of their cash allowance to get a car, and how do you govern that as a fleet?

“How do I say to someone that these are the restrictions on the vehicles they choose when they’re funding it themselves to that extent?

“We don’t want to disengage employees because even for business-need it’s a very emotive issue that a lot of people get annoyed about because it’s no longer you get given a specific car and you deal with it.

“We are looking at changing the company choice list because after joining it was probably the thing I got spoken to about by many different departments and managers.”

Another delegate spoke of how the cash allowance was seen as a salary uplift by drivers at a previous employer.

“They were open about it, saying how they would use the money for timeshares etc, but would then book hire cars or use public transport which the company then paid for,” he added.

“So we changed that to a mobility allowance, so it was ‘there’s an allowance for you to be mobile, you can’t claim for anything else. Yes, there are circumstances where you may need a van to carry stuff instead of a car, but it works, it’s a balancing act.”

Other views expressed during the round table discussion included:

  • Some manufacturers are coming in quite aggressively with discounts on non-electric models.
  • Reviewing wholelife cost bands to get electric cars into the bottom bands as well, because no electric vehicles were available for business-need drivers .
  • One fleet is going to do an exercise to see if it needs a pool fleet at its office site.

Login to continue reading.

This article is premium content. To view, please register for free or sign in to read it.

Please enter your email
Looks good!
Please enter your Password
Looks good!