End of ECO schemes hit dealer staff morale

THE ending of employee car ownership (ECO) schemes – in its most basic form a company car tax dodge – is going to impact dealers and staff morale, making it even more difficult for dealers to retain staff.

Almost half of dealers (45%) surveyed in the latest Startline Motor Finance tracker survey said the end of ECO would impact staff attraction and retention.       

The same survey found that 38% of dealers think the schemes are an important benefit for dealer staff while 41% believe “a lot” of current government actions are negatively affecting car dealers.

But, to give balance to this view, 35% of dealers agreed with the government’s assessment, saying ECO schemes were always questionable, while 24% have already replaced them with another option for staff.

Paul Burgess, CEO at Startline Motor Finance, said:

“Attracting and keeping good quality staff remains an issue for many dealerships and the ending of ECO schemes by the Chancellor planned for next year is clearly felt to remove a key element of employee benefits packages.

“What is perhaps noteworthy is that a large number of dealers – more than four out of 10 – also feel that this is part of a pattern from the government, that they are just generally making life quite difficult for dealers.

“Perhaps everything from higher employee national insurance to substantially increased levels of minimum wage can be placed under this heading although, on the other side of the balance sheet, we now have sensible revisions to the Zero Emissions Vehicle Mandate.”

Nevertheless, Burgess also acknowledged that dealers found ECO schemes ‘problematic’ and have been expecting government action as it seeks to up its tax take.