CASH for car expert Gary Hull, director of human resource services for PricewaterhouseCoopers, highlighted a number of reasons why a fleet might want to provide its drivers with a cash option.

They include the potential for reducing costs, the fact that it offers an alternative, extra flexibility and a reduction in administration.

He added that a fleet's overall objectives would influence the way in which the cash allowance was calculated.

Hull said research showed that most companies made the cash allowance cost neutral to the company.

Before implementing any alternative car scheme, fleets should establish exactly how much it costs them to run a traditional company car scheme so as not to increase costs with any other initiative.

Factors to take into consideration include the annual lease cost or depreciation and finance costs, repairs and maintenance, road fund licence, administration costs, insurance and accident management, National Insurance contributions and the implication of corporation tax and the impact of VAT.

Should the fleet decide to press ahead with an alternative scheme it is important the company retains control over the choice of car employees can choose so they are fit for purpose and properly maintained. But he stressed that a cash- for-car scheme would not suit all drivers so it was vital fleets did their homework before embarking on such a move.

He also warned against studying the marketplace to see what type of allowance competitors were offering.

'Some companies may offer a big cash for car allowance,' he said. 'But no pension or medical provision. Or they might have a lower cash allowance but higher mileage allowance.'

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