Company Cars: An Uncertain Future As They Cease To Be Status Symbols
The future of company cars is becoming increasingly uncertain. Whilst the leasing sector is expected to grow, it’s uncertain whether the vehicles will play a role…
An Uncertain Future
According to the British Vehicle Rental and Leasing Association (BVRLA), the leasing sector is expected to grow; but it’s unclear whether company cars will play any significant role. It surveyed the views of 20 experts from across the automotive industry. It found that many believe cash allowance opt-outs will significantly hit demand. This, they argue, will largely be a result of over-taxed employees moving towards personal contract hire or grey fleet. In a report, the BVRLA itself argues that Worldwide Harmonised Light Vehicle Test Procedure (WLTP) and high BiK rates are effectively killing off company vehicles. That said, some of the experts said that some cash-takers were moving back towards company options because of the simplicity they entail. There’s also hope that 0% company car tax rate for electric vehicles will transform the landscape.
Gerry Keaney, chief executive for the BVRLA, acknowledged challenges for the leasing industry but remains optimistic. He said, “our sector is in for a bumpy ride in 2020, but it has both hands on the wheel. BVRLA members are providing more consultancy and advice and building stronger customer relationships and loyalty”. He added, “they are ideally positioned to take advantage of some of today’s key megatrends. Finance remains cheap and society is becoming used to the idea of buying a service rather than owning an asset. At the same time, road transport has risen up the political and business agenda and expertise is in short supply”.
No Longer A Status Symbol?
Whilst money and finance can go a long way in explaining the popularity of company cars, there’s arguably more to it. Culture can have an a big impact, too. Peter Golding, managing director of FleetCheck, believes there’s been a change in attitude. Explaining the situation he explained, “historically, in a corporate environment, there has been quite a strong emphasis on the company car you were given as a signifier of your position within the organisation”. He continued, “it has been part of fleet culture. However, that situation has already been changing and hierarchies could further flatten significantly, we believe”.
Golding also suggested that young people were at the centre of the change saying, “part of this is simply attitudinal. There appears to be less emphasis among younger people when it comes to seeing the car as an extension of their personality or a reflection of their personal success. It is more of a means of transport”. He added, “that doesn’t mean that they don’t want a ‘nice’ car – they probably do – but the model and grade is less of a priority”. Ultimately, Golding feels that we’re moving away from company vehicles that act as status symbols and towards a more utilitarian approach; we’ll embrace them not because they imply success, but because they’re cleaner, safer and (in some cases) more convenient for our work and lifestyles. Either way, company car offerings clearly need to evolve if they’re going to survive.
60% Of Employees “Ready To Quit” If They Lose Company Cars – https://www.autoservefleet.co.uk/latest-news/60-of-employees-ready-to-quit-if-they-lose-company-cars/
Transport Problem: What Would It Take For You To Give Up Your Car? – https://autoserve.co.uk/motoring-news/transport-problem/