FLEET operators must consider the implications of guaranteeing loans for employees when looking to offer cash alternatives to traditional company car schemes. Swan National business development manager William Caldwell told Fleet News Roadshow delegates that employees may, unknown to the company, have poor credit ratings which would prevent them from getting a loan to buy a car without company support.

He said: 'The credit rating of employees must influence the scheme. An employee with a poor credit rating may fail to get a loan, so the possibility may exist for the company to guarantee against all or some of the contracts. But if that is called upon in the future it could open up a benefit-in-kind issue. Guaranteeing contracts would have to be carefully considered according to the company's objectives.'

Caldwell said these objectives were vital to the success of such schemes. Attempts to simply reduce costs by opting out of traditional company car operation had not tended to be successful and fleets looking to save pennies could well be better served by opting for running lower spec company cars.