THE company car remains the most popular employee benefit, but one-third of employers have not yet incorporated the new emissions-based company car tax into their fleet policies, according to new research.

A report produced by business information specialist GEE Publishing and commissioned by Godfrey Davis (Contract Hire) found that 49 per cent of respondents expect the new benefit-in-kind tax system to have no impact on the appeal of the company car to employees; and a further 38 per cent thought drivers were indifferent to the implications of the new tax.

Just over half (51 per cent) thought drivers would select cars with lower CO2 emissions, while 22 per cent said drivers would select diesel cars and 8 per cent anticipated downsizing moves to smaller engined cars.

Author of the report, GEE's Cherry Park, said: 'Despite the scare-mongering, this research demonstrates that company cars still remain the most popular of employee benefits with almost 70 per cent of employees eligible for a perk car taking up the offer.

'On a more negative note, many companies have still not calculated a pollution rating for their vehicles and as a result many employees may be unnecessarily stung by higher tax charges without fully comprehending the reasons why.'

The survey of finance directors, company secretaries, fleet managers and human resource managers at 358 organisations with an average fleet size of 134 vehicles also found that contract hire continues to improve its share of the fleet funding market at the expense of outright purchase.

Some 70 per cent of the fleets surveyed with 100-plus vehicles now use contract hire, although this percentage falls to 46 per cent for the whole parc. But outright purchase has seen its market share shrink from 33 per cent to 31 per cent, although in the sub-25 vehicle sector some 42 per cent of fleets still use cash to acquire their cars.

In line with the growing adoption of contract hire is the increasing use of lease rates as benchmark bands in company car choice lists, used by 43 per cent of respondents.