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Company car still vital tool for business, says AFP

Reports that the company car is in potential decline have been negated by the Association of Fleet Professionals (AFP) as it highlights that the fleet sector may actually be on the increase as a result of the pandemic.

AFP chair Paul Hollick

AFP chair Paul Hollick

Paul Hollick, AFP chair, said it was likely true that a few drivers were opting out of their vehicles because of the growth of video conferencing but pointed out that the company car remains a highly effective tool for business – and in many instances, the only viable transport option.

He added that although its use for sales and account management has seen changes as businesses ditch face-to-face meetings, the company car has a far broader role for businesses and many of the reasons why they have historically been operated are more vital than ever, from job need to human resources considerations.

Hollick also outlined that the drive for electrification was likely to be increasing take-up of company cars.

“Many employers are now committed, at a corporate level, to changing as much as possible of the transport on which they depend to EVs,” he outlined. “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.”

And, he added, it was likely that former cash allowance drivers were actually 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.

The new rate is also prompting a dramatic increase in salary sacrifice schemes, according to Hollick. “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.”

And while Hollick acknowledged a potentially dramatic increase in grey fleet use, he pointed out that this would be due to employees turning away from public transport – because of the risk of infection – and not company cars; bringing, of course, significant risk considerations for operators.

Finally, demand for van provision is booming within fleets, Hollick added, “largely because of the growth of online shopping and other home-based services in the wake of coronavirus”. In fact, vans are “ever-more critical”.

Hollick also reiterated the prevailing message from the AFP that far from downplaying the importance of fleet, managers should actually underline the benefits of company cars and vans, as well as the effectiveness of the profession of fleet management in general terms.

Last week saw the association urge managers to “bang a drum” on the benefits of effective fleet management, from cost savings to eco savings.

“The fact is that very few businesses could survive without access to road transport, whatever form it takes, and the current situation hasn’t changed that core fact,” Hollick continued.

It’s a subject that will come under focus in the AFP’s ‘Adding value to your business’ webinar taking place on 23 September 2020 and open to all within the industry.

Hollick added: “We are determined to speak with one voice as an industry in promoting the overwhelming advantages of professional fleet management at this point in time.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.