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Security and convenience key to staying with a company car

The latest findings from Arval Mobility Observatory’s research indicate that 31% of those fleets without alternative mobility policies in place believe that employees not having to finance their own vehicle, followed by the ease of motoring with all services provided by the company (18%) and no risk of ownership such as residual values (16%) are the top drivers for choosing a company car.
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8 June 2022

FACTORS related to financial security and convenience top the list of reasons why fleets without alternative mobility policies in place believe that employees choose a company car rather than funding their own vehicle.

The latest findings from Arval Mobility Observatory’s research indicate that 31% of those fleets believe that employees not having to finance their own vehicle, followed by the ease of motoring with all services provided by the company (18%) and no risk of ownership such as residual values (16%) are the top drivers for choosing a company car. Low company car tax when choosing an electric vehicle (EV) (12%) and delivery of a new car every 3-4 years (3%) were also listed.

Shaun Sadlier, Head of Arval Mobility Observatory in the UK, said: “It is highly informative to look at the reasons why fleet decision makers without an alternative mobility policy in place, believe that so many drivers choose to stay with a company car rather than funding and maintaining their own vehicle.

“The vast majority of the factors mentioned by respondents are based around financial security and convenience. For example, not having to finance your own vehicle is the top result, as in previous years, and it is clear that drivers view this as a major advantage.

“It is worth bearing in mind that this avoidance of potential risk becomes potentially more attractive during times of economic uncertainty of the kind we are seeing now, with the emergence from the pandemic being accompanied by issues such as the rising cost of living and conflict in Ukraine.”

Perhaps the single most important standout response to the question, Sadlier said, is that four times as many fleet decision makers as in last year’s survey mentioned the very low personal taxation applied to EVs as a factor in opting for a company car.

“This bears out predictions widely made in the fleet sector in recent years that drivers who have taken cash options in the past will return to company cars and other employees will enter salary sacrifice initiatives as a result of the current minimal Benefit in Kind taxation rates and higher initial purchase price for EVs. This is something that is being seen at Arval in the UK and which we expect to grow in the coming years.”

In a related question, Arval Mobility Observatory’s Barometer also asked which solutions businesses offered to employees to finance a personal car. Respondents mentioned salary sacrifice (23%), cash allowance (23%) and personal contract hire (5%).

Sadlier said: “When it comes to the methods offered to employees who do not choose a company car as a means to finance a vehicle, cash allowance and salary sacrifice are the joint top options listed, which is a repeat of recent years. Again, we expect to see a growth of the latter in future reports.”

Arval Mobility Observatory carries out its authoritative research of key trends in the fleet and mobility sectors every year. The 2022 Barometer talked to fleet decision makers in 26 countries and the figures shown here cover UK responses to this section of the survey.

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Chris Wright

Chris Wright

Chris Wright has been covering the automotive industry nationally and internationally for 30 years. Following spells with consumer titles he became News Editor of Automotive Management (AM), Editor of Automotive International, International Editor for Detroit-based Automotive News, and Editor of Dealer Update. He has also co-authored several FT Management Reports and contributes regularly to Justauto.com

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