Spoilt for choice?
Businesses are tightening up choice lists in a way that has not been seen for a while. The move is often cyclical with companies tending to be relatively hands-off during the good times, while being a little more prescriptive when the economy is less forgiving.
The latest quarterly Company Car Trends research from GE Capital’s Fleet Services division showed fleet bosses are more inclined than ever to question and restrict choice. An increasing number of the 250 fleet decision makers questioned are using stricter criteria when it comes to deciding which models will be offered to employees. It's no surprise that cost savings are at the top of company car agendas.
Such a clamp down might seem a little draconian, but the savings identified are a two-way street with employees also benefitting financially, even if it means sacrificing the car of their dreams for something more prosaic. A bigger bank balance at the end of the month will be welcomed by most in these straitened times.
The findings could prove a useful barometer for fleets across the country, especially SMEs sourcing cars from their local main dealers where cost savings could pay significant dividends. They can also be useful means to advise drivers taking cash allowances to fund their own cars.
Respondents were asked which criteria were being used to set employee car choice now compared with the first quarter of 2011. CO2 emissions topped the list in both surveys but by a greater margin this year (70%) than 2011 (52%). While companies are more inclined than ever to show their green credentials this is a clear indication that lower CO2 emissions means lower whole life costs.
Other significant increases were fitness for purpose, up from 40% to 59%, and maximum monthly rental rates, up from 40% to 58%.
Discussing the findings Gary Killeen, fleet services commercial leader for GE Capital UK, said they clearly showed a shift in thinking:
‘There has been a lot of interest among fleets in re-examining and tightening up their company car choice lists over the last year or so, with employers using them as a direct means of meeting their key fleet objectives.
‘At the heart of this is a desire to reduce expenditure. This is seen in the increased interest in lower CO2 emissions, maximum monthly rentals and maximum engine capacity. These help reduce acquisition and running costs although there is also the advantage that most will reduce your carbon footprint.’
Franchised dealers have a good understanding of the importance of CO2 emissions, and recent years have seen them increasing stock and selling cars according to this, after all car manufacturers have worked hard to reduce the CO2 levels. Retail customers are more likely than ever before to ask about CO2 emissions as a way of driving down the road tax costs in what has become a progressively harsh VED regime.
The same applies to user-choosers who are now fully aware of their exposure to CO2 related BiK tax and could do a lot worse than to visit their local dealer when their car comes up for renewal to see which are the most tax efficient and practical models available. A dealer test drive may even convince doubters that the current generation of low emission, high output engines also deliver performance.