Fleets reducing choice as focus moves to costs - Arval

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

Ben Edwards, Senior Consultant at the vehicle leasing and mobility specialist, said 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.

“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 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.”

Ben Edwards, Senior Consultant, Arval UK Tweet

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, Ben explained.

“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.

“Rather than EVs being a separate choice consideration, they are now subject to and integrated into regular fleet decision making. More and more businesses are approaching our consultancy team to discuss their revised priorities and we are helping them create new solutions, including negotiating with manufacturers to access preferential terms.

“Most company car fleets are now EV-dominated but some still want to offer hybrid and internal combustion engined alternatives, and, across all fuel types, there are options that provide a high degree of value, allowing employers to concentrate their spending power while still meeting human resources needs.”

Ben added that extras provided by manufacturers were also forming an increasingly important element of their proposition to fleets.

“Some car makers are supplying and fitting a home charger with every EV delivered, for example, and this can be a very attractive incentive, especially where the requirement for a car is a necessary job requirement.”