What is happening in company cars: Part 1 - Practice

Company cars remain one of the most desirable employee benefits provided in the UK. Primarily, it is the all-round convenience they offer which makes them so attractive, but the image and status they convey also add to their appeal. In recent years, however, because of changes to the tax system and a desire to keep a rein on costs and administration, the prevalent trend has been a move away from cars, with companies instead preferring alternative options such as employee car ownership schemes (ECOS) or cash alternatives. This trend looked to be irreversible, with many commentators sounding the death knell for company cars, but a number of new developments may mean that the situation is changing.


This two-part report examines the latest available car surveys to help shed more light on this situation by looking at the approaches that companies are currently taking with regard to all aspects of fleet policy.

The first part of the report is split into five main areas:

  • vehicle acquisition and fleet management
  • driver eligibility and vehicle allocation
  • scheme flexibility
  • insurance, fuel and other costs
  • health and safety.

These five sections examine what is happening with regard to current practice at this point in time and in some cases how things have changed over the last year or more.

A glossary of some common company car and fleet management terms is set out in section 7.

To supplement this information, a second part entitled Company Car Policy Guidelines, to be published in a forthcoming issue of e-research, provides more information about the policy options available to companies and the pros and cons of different approaches. It also covers the five areas mentioned above and can be read in parallel with this initial part.

Whereas the first part of the report seeks to answer what companies are currently doing, the second differs in that it provides information on why they may have chosen a particular policy direction highlighting advantages and disadvantages and other consequences.

Taking the two parts of the research together, the reader will be in a position to understand the implications of different policy directions when designing their own car policy or even if they are only considering changing it.

Here, in part one, the current situation is examined by drawing on our own in-house knowledge together with information from a batch of the latest reports and surveys from industry specialists focusing on this major benefit. Additional information referred to comes from organisations including:

  • Alan Jones and Associates
  • Employee Benefits magazine
  • Hay Group
  • Lex Momentum Consultancy Services
  • Mercer Human Resource Consulting
  • PricewaterhouseCoopers' survey unit Monks.
Download PDF