Financial security and convenience are among the top reasons why employees prefer company cars to funding their own vehicle, according to fleet decision-makers.  

The vast majority of key company car benefits cited by respondents were based around financial security and convenience

Research by Arval’s Mobility Observatory has indicated that 31% of fleets without alternative mobility policies in place believe that employees not having to finance their own vehicle is a key attraction, followed by the ease of motoring with all services provided by the company (18%) and no risk of ownership such as residual values (16%).

Low company car tax when choosing an electric vehicle (12%) and delivery of a new car every 3-4 years (3%) were also listed.

Shaun Sadlier, head of Arval Mobility Observatory in the UK, noted that the vast majority of the factors mentioned by respondents were based around financial security and convenience – and highlighted that this avoidance of potential risk becomes potentially more attractive during times of economic uncertainty of the kind we are seeing now.

But he added that perhaps the single most important standout response was that four times as many fleet decision-makers this year mentioned the very low personal taxation applied to EVs as a factor in opting for a company car.

“This bears out predictions widely made in the fleet sector in recent years that drivers who have taken cash options in the past will return to company cars and other employees will enter salary sacrifice initiatives as a result of the current minimal Benefit-in-Kind taxation rates and higher initial purchase price for EVs. This is something that is being seen at Arval in the UK and which we expect to grow in the coming years.”

Arval Mobility Observatory’s Barometer also explored which solutions businesses offer to employees to finance a personal car. Respondents mentioned salary sacrifice (23%), cash allowance (23%) and personal contract hire (5%). While this repeats the results of previous years, salary sacrifice is again expected to show growth in future reports due to the current low BiK rates.
What is the main reason you believe drivers stay with a company car rather than adopting a mobility solution?

Which solutions do you offer to employees to finance a personal car? 

Salary sacrifice 23%
Cash allowance 23%
Personal contract hire 5%
Other 47%