One of the most famous work-life perks – the company car – could be under threat of extinction thanks to a lack of clarity from Government around the future of the business car sector.
The future of the company motor is in peril thanks to a lack of clarity and action by Government that’s forcing more and more people out of business vehicles and into older, less efficient cars.
Today, the fleet industry, backed by leading automotive magazine Fleet World, is launching a campaign to save the company car, calling on Government to give better guidance and clarity to help drivers achieve their efficiency targets.
“The message is a simple one,” says Fleet World editor, Alex Grant. “Company cars are cleaner, safer and better for business, yet the Government seems hell-bent on making life difficult for the businesses and drivers that use them.
“We’re getting anti-diesel tax, which is pushing up running costs, but we’re not getting Ultra Low Emission Vehicle (ULEV) incentives put in place to support the alternatives, and there’s very little stability being provided to help fleets make long-term decisions.”
“The message from policymakers appears to be clear; that diesel is bad. And fleets aren’t getting the support they need to adopt the alternatives, which at the moment are vague at best.”
In its campaign, Fleet World points out that company cars are some of the cleanest on the road. Average CO2 emissions among newly-registered British Vehicle Rental and Leasing Association (BVRLA) members’ cars was 112.0g/km in Q1 2018, versus a market-wide average of 122.5g/km.
These are also far more likely to be hybrid or electric vehicles (9.6% in Q2, versus 5.1% for the UK market), while 87% of car fleets are compliant with the newest Euro 6 emissions standard. But as tax hikes erode the value of these schemes, HMRC data shows 20,000 fewer drivers opted for a company car in 2016/17 versus the year before.
With personal lease cars emitting 12% more CO2, and privately-owned ‘grey fleet’ cars on average 22% higher, the consequences of the sector declining are huge, going against the Government’s own plans to improve air quality and decarbonise road transport in the UK.
Fleet World is also calling on Government to offer more support for Ultra-Low Emissions Vehicles and give greater clarity around new WLTP (Worldwide Harmonised Light Vehicle Test Procedure) regulations that are set to shake up the way car MPG figures and emissions are measured. At present, the Government is offering no guidance on how Benefit-in-Kind tax will be structured around the new regulations, which is causing fleet managers and company car users to stall their purchases.
The campaign features four calls to action:
- Advance notice of future company car tax bands, particularly how these will accommodate the transition to WLTP
- Fair tax for diesel engines, which remains a vital technology for fleets
- Joined-up thinking with regards to incentives for ultra-low emission vehicles
- A national framework for clean air zones
“It seems to us that a lack of understanding of the fleet market is causing mass confusion among drivers and businesses and it needs to be sorted quickly,” added Grant. “The fleet sector is one of the most efficient and dynamic areas of the new car market, but the company car itself could become an endangered species if action isn’t taken quickly, and the Government starts to understand the needs of business and business motorists.
“Don’t over-tax fleets, or underestimate the importance of the company car. Give businesses the tools they need to forward plan, and the incentives they need to run the cleanest vehicles.”