Company Cars: Demand Will ‘Spike’ In 2020
The demand for company cars will rapidly increase in 2020. This will follow lower benefit-in-kind (BiK) rates for plug-in hybrids, driving up fleet interest. That is, according to consultancy service company HRUX.
A Great Time For Hybrid Drivers
For 2019/20, BiK rates for vehicles with Co2 emissions of 0 – 50 g/km are 16%. Vehicles with emissions between 51 – 75 g/km stand at 19%. However, these will decrease in 2020/21 to 2-14% and 15-19% respectively (depending on zero emission range).
Current Rates ‘Terrible’
HRUX believes that current rates are simply “too high” and are putting employees off of company cars. Harvey Perkins, the company’s director, told a delegation at the Car Fleet Management (ICFM) conference that they currently represent a ‘terrible’ deal. He said, “the rate of attrition of tax rates is too high and the implication is that company cars were a good deal two or three years ago, but are now a terrible deal.” He added, “many drivers do not know what the cost of their company car will be until they have to order a new one. They then find out what the tax is and, as a result we are seeing more people opt out.”
But the significant reductions in BiK for zero emission cars and plug-in hybrids are set to make an impact soon; they’ll become a much more attractive offering as a result. As Perkins explained, “drivers will spend more money in Starbucks than in company car tax if they have a pure electric car. It is really an unbelievable deal.” He drew attention to the fact that hybrids with 40-mile ‘clean’ range will face an 8% tax rate, which is the lowest in a generation; stressing that they would remain an ‘answer’ until pure electrics become viable. It’s not all good news though, as the government will have to raise lost funds from elsewhere, “we will see some form of UK-wide road charging to recoup that money if it starts to float away with the transition to electric vehicles.”
Despite rising Benefit In Kind (BiK) tax, company cars remain an attractive employee benefit. It’s why so many large corporations offer them; they’re useful in attracting, and retaining, members of staff. It’s easy to see why. Policies usually make desirable models more accessible, streamline maintenance processes and make employees feel valued. In short, they’re practical and motivating. It’s not all just about cost, after all.
Company Cars That Cost less Than £100 A Month – https://www.autoservefleet.co.uk/latest-news/company-cars-cost-less-100-month/
Duty Of Care: Let Autoserve Take Care Of It For You – http://autoserve.co.uk/motoring-tips-advice/duty-care-autoserve/