LETTERS to Fleet News’ editor John Maslen.

ECOs are no threat to traditional fleets

SIR – I noted with interest the comments of Nick Brown. In his letter (Fleet NewsNet, March 31) he asserts that ‘ECO schemes ...invariably do not generate the savings claimed...’ and that ‘...alternatives to the company car are dangerous...’.
In my position, I would invariably dispute these points. But any thoughts I have are qualified by knowledge of the largest ECO customer base in the industry and, in generating a leading market position, an understanding of all the challenges and opportunities presented by ECO to support my views.
Despite this, I am not writing to counter any arguments Mr Brown has put forward – I am writing to support his cause. He is right when he says there is a ‘huge knock-on effect’ to suppliers moving from a single corporate contact to hundreds of individual drivers to deal with as end users.
He is right when he asserts that employers tempted to offer ‘certain alternatives’ may be reducing their control and limiting the value they can extract from operating a well-run fleet. And, of course, he is right that the associated benefits of company cars impact on both social and economic imperatives that employers have a regard to incorporate into their fleet policies.
ECO, however, is simply one choice available to employers looking to achieve a number of objectives with their fleets. It can support certain initiatives but as with any option will do so to varying degrees of success. It complements traditional company cars and there is a point where the benefits of one outweigh the other.
Our responsibility as suppliers is to advise on that point, which will vary from one customer to another depending on the profile of their fleet and what their key objectives are.
Matching these objectives and assessing capabilities of suppliers to deliver a solution is undoubtedly a key challenge for employers.
This, however, is an exciting area of development for fleet suppliers. More and more customers are looking for recommendations that draw upon a mix or blend of approaches to arrive at the optimum solution that will not only impact on business efficiencies but also build the foundations for sustained improvement in operating and financing a fleet of vehicles.
Far from threatening the existence of the traditional company car, this approach is acknowledging the important role it has to play but in doing this it also means companies also appreciate the limits of its contribution to a fleet strategy. Any fleet strategy has to be aligned to the wider business strategy as vehicles link employers to their employees, through benefit packages, and to their customers in helping to service their needs.
In turn, suppliers are realising this throughout the industry and those that have responded to the market will be able to incorporate a range of methodologies in their recommendations.
This can only be good news for fleet operators as they can build a trusted relationship with their supplier based on sound advice and access to new developments.
Only time will tell, but I don’t believe that ECO and other alternatives pose a threat to the existence of the traditional company car because there are many good reasons as to why alternatives may not be right.
There is nothing to fear from ECO schemes, in fact quite the opposite, in embracing tax-efficient alternatives we may see less traditional company cars but as result they will become more entrenched as a feature of fleet strategies in the future as their true value is realised.
Change is coming and we all need to embrace it or risk losing sight of what is really important to our customers.

Adam Trevaskus
Head of Whitechapel and Corporate, Lloyds TSB autolease

Views on ECOs are outdated and misinformed

SIR – On the subject of cash-for-cars (Fleet NewsNet, March 31) Black-i Vehicle Management’s Nick Brown’s comments were predictable. I agree that offering an employee cash in lieu of a company car without a proper, structured policy or management controls in place, is inappropriate.
However, his views on employee car ownership (ECO) are outdated, do not reflect today’s market requirements, nor do they reflect the view of a growing proportion of today’s fleet managers.
Most well-informed Fleet News readers will be well aware that ECO has long been accepted as a mainstream fleet funding product. It now sits alongside other funding options such as contract hire and lease purchase, etc.
As with any type of vehicle funding, careful consideration must be given to whether ECO is appropriate, and it is not always solely about cost savings. Some employers are looking for cash savings, others to simply freeze their costs.
Employee choice and flexibility may be a key reason for switching, while a wish to dispense with the administration burden of company cars may be the deciding factor. Each case is different and must be treated as such.
Mr Brown also seems misinformed on how ECO actually works. His view that setting up and running an ECO scheme involves expensive professional advice is not the case. He also points to a loss of control in relation to health and safety and appropriate vehicle choices. Again he is misinformed. A professionally designed ECO plan has controls and procedures built in to ensure the employers’ health and safety responsibility is upheld and vehicles are fit for purpose.
However, he is right to point out that most mainstream leasing companies which are set up to deal with a single decision-maker in a company are not often able to make an efficient switch to dealing with individual drivers under ECO schemes. This is why Provecta has remained an independent ECO specialist helping employers to make an informed decision about their car benefit policy, and is now the UK’s market leader.

Nick Sutton
Chairman, Provecta Car Plan

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