Businesses reducing car lists to focus on costs, finds Arval

Fleets are reducing the length of their company car choice lists in response to a renewed focus on costs, according to Arval UK.

Ben Edwards, senior consultant at the vehicle leasing and mobility specialist, said that earlier in the 2020s, businesses expanded the selection of models available to employees to make electrification more attractive, but now wanted to maximise their spending power.

He added: “It made sense in the earlier days of electric company cars to widen choice lists.

“Highly favourable benefit in kind taxation meant most drivers wanted to move into an electric vehicle (EV) but there were comparatively few models available at the appropriate price points and supply, especially around the time of the pandemic, was highly erratic. 

“Now the situation has fundamentally changed. Employees still want to drive EVs but the number, diversity and supply of models have all improved exponentially.

“Arguably, it has gradually transformed from a seller’s to a buyer’s market.”

The current general economic situation and, most recently, worries over the impact of the war in Iran, were leading businesses to instead concentrate on getting the most out of their fleet spending, Edwards explained.

He said: “Really, we’re seeing a return to what might be considered traditional choice list construction, where a limited number of manufacturers and models are chosen that satisfy the widest possible range of employee needs.