THE Association of Fleet Professionals (AFP) believes a continuing narrative on the decline of the company car is incorrect.
While the association said it acknowledged that the growth of video conferencing had led to a some drivers opting out of the company car and there was a degree of structural change about how some functions go about their business, there were strong grounds to envisage company car growth rather than decline.
Chair of the AFP Paul Hollick, said:
“There are a couple of big stories here. The first is cash allowance drivers looking to opt back into company car schemes thanks to the 0% benefit-in-kind rate for EVs introduced at the start of the current tax year. This is proving a very attractive option.
“The same tax situation is also prompting a dramatic increase in salary sacrifice schemes. We believe these types of initiatives will gain much greater traction in the near future. Additionally, there are signs that affinity leasing schemes are gaining in popularity.”
Hollick added that it was important that the fleet sector, as a whole, resisted the emergence of any emerging narrative that the company car was in potential decline.
He continued by saying that all the other reasons cars are operated by employers– from job need to human resources considerations – were still in place. And that while mileage for some may be reduced in the future, the journeys that they make would still be important.
The overall market view was complex, but Hollick said he expected growth in the company car sector.
Many employers are now committed, at a corporate level, to changing as much as possible of the transport on which they depend to EVs. They know that drivers who give up their company car for a cash option are overwhelmingly likely to choose an older, more polluting model. There are strong CSR reasons for retaining company cars.Paul Hollick, chair, Association of Fleet Professionals
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.