THE new company car tax system will force drivers out of traditional company cars and into the arms of car dealers, according to leading dealer group.

Reg Vardy says the move to tax fleet drivers according to their car's carbon dioxide emissions will push drivers out of their conventional fleet vehicles and force them to choose alternative personal leasing schemes or take a cash-for-car option.

Group chairman Sir Peter Vardy said: 'I anticipate many customers will opt-out of company car schemes as the new carbon dioxide-based tax comes in to force in April. With many years of experience in providing motoring solutions to retail customers, I am confident that the group will benefit from this growing sector of the market.'

A strong marketplace with record new car sales led dealership group Reg Vardy to announce rocketing profits.

The group recorded a 60.8% increase in pre-tax profits from £9.43 million to £15.17 million in the six months up to October 31 2001.

The group's contract hire division increased its turnover by 31% to £10.9 million and achieved pre-tax profits of £300,000 as its fleet size increased from 5,120 to 8,220 vehicles.

Vardy said: 'Now that new vehicle prices have been reduced, we are growing the fleet size further with the introduction of several new contract hire and leasing products.'