Fleets restricting company car choice lists to get a grip on costs (VIDEO)

Reduced discounts, rising lease costs and long lead times are forcing some fleets to restrict the vehicles available on company car choice lists.

While the arrival of new entrants to the UK car market, particularly from China, was expected to widen vehicle choice on company car schemes, fleets appearing on the latest Fleet News at 10 webinar said rising costs were instead forcing them to limit choice.

“It’s given me a massive headache,” said Steve Openshaw, group fleet and transport manager at Eric Wright Group. “Costs going up, interest rates going up, discounts going down.”

Company car choice at the group is restricted to hybrid, plug-in hybrid and battery electric vehicles (BEVs).

“We couldn't offer a driver the same car that he was coming out of,” continued Openshaw. “So, we had to go to the board and come up with a different solution.”

That solution was to offer a smaller selection of company cars on its choice list to get a grip on costs.

Openshaw is not alone in having to restrict choice. Elaine Pringle, fleet manager at Scottish Water, told Fleet News at 10: “We’re seeing restrictions on the number of models that are available due to price increases.”

The concern, she says, is that employees may choose to leave company car schemes, opting for greater choice through a cash allowance.

“Another factor is availability,” said Denise Hawkins, fleet manager at Stannah Group. “Lead times and availability are also restricting what you can get.”

Long lead times of 12-18 months for some models are not feasible from a planning perspective, she says, while discounts are not being renewed.  

As a result, choice lists have become more restrictive and are also having to be reviewed more frequently. “They have to be reviewed and amended multiple times a year,” she said.

Some fleets have increased grades by £100 or more, to try and enable employees to have access to a wider choice of models, but Duncan Webb, fleet director at the AA, says in some cases that’s not enough to halt the reduction in choice.

He explained: “Interest rates alone are probably going to eat up the majority of that increase before you worry about an RV position or an input price position, or a maintenance position.”

Fleet News at 10 features a guest panel of leading fleet decision-makers discussing the month’s biggest news and hottest industry topics.

The next webinar take place on Friday, September 29, from 10-11am. Register for free here.