A new way of operating company cars is being launched, effectively creating a halfway house between car clubs and traditional company car leasing or ownership.

Billed as cars for people who want to drive new vehicles but don’t want the associated debt or commitment, the backers of Pay-as-you-go Cars (PAYGC) will initially target small and medium-sized businesses in the south east of England.

The launch is planned for November, although a pilot website is live at www.paygcars.com.

The company’s directors hope to swiftly roll the businesses out nationally and have plans to also target the retail market and overseas.

Director Larry Chan told Fleet News: “The business has tremendous potential in the UK.

“Operating a fleet of 10,000 cars in the UK is not out of the question and, subject to market conditions, we also plan to expand outside the UK within a short space of time.”

The crux of the offering to companies and employees is that cars can be funded via the increasingly popular salary sacrifice route to give tax savings.

Salary sacrifice works best when substituting salary for a taxable benefit at a much lower rate, thus delivering potential savings to employees and employers.

However, the key difference to the norm, says PAYGC, is that cars are supplied on 28-day rolling contract terms with a 1,200 miles per month allowance and the promise that a vehicle is replaced as soon as it is six months old or has travelled 7,000 miles. Penalty charges apply if mileage limits are breached.

To access the scheme, there is a one-off membership fee, which is equal to a single 18-day payment on a chosen car.

When Fleet News checked out the PAYGC website it was promoting indicative monthly pre-launch prices of, for example, a Ford Focus 1.6 TDCi Zetec S 115 PS five-door manual from £365 including VAT with all costs covered except fuel and insurance; a Ford Mondeo 2.0 TDCi Titanium X 140 PS Business Edition manual from £425 including VAT; and a Volvo XC60 2.0 D4 163PS 2WD R-Design Geartronic auto from £565 including VAT.

Chan said PAYGC is “working very closely with Ford” and that negotiations are taking place with a major supplier, but he declined to reveal whether that was another vehicle manufacturer or dealer group.

The website claimed rates were “at similar levels of annual cost to vehicle leasing or cash purchase”, but instead of one car every three years or less frequently, those signing up to the initiative would be entitled to two new cars every year.

PAYGC, which will manage the fleet, is also offering an insurance package via Aviva and says that with no lease, loan or finance agreement in place and no long-term commitment, customers pay online every 28 days or can walk away without any obligations if their circumstances change.

Chan said he was “very confident that there was a market” for the PAYGC concept with businesses and drivers that wanted better value than car clubs offered and did not want to commit to either owning vehicles or a three- or four-year leasing agreement.

He added: “We are filling a gap in the market for businesses and people who don’t want any long-term commitment because they don’t know what the future holds, but want better value than can be offered by car club schemes and car rental which make financial sense only for occasional motoring.

“The project has been designed to replace the purchase or leasing of cars with an alternative which is more likely to be successful in the present economic climate, as it involves no financial risk to the car user, while having unique operating benefits.”

PAYGC is the brainchild of businessman Clive Bridgeman, who lived and worked in Spain for a number of years.

The principle of PAYGC was established by a business operating with 600 cars on the Costa del Sol which, it is claimed, “proved to be immensely popular” notably with UK citizens living in the area.

Bridgeman, founder and chairman of PAYGC, when contacted by Fleet News was travelling in Russia “researching the worldwide application of the concept”.

He has now assembled a team to develop and launch PAYGC with Chan, who has a background in establishing and building businesses, joining the company in May as a director.

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