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Pros and Cons of Providing Company Cars to Your Employees

Blog post   •   May 23, 2016 07:26 BST

Company cars offer a great many perks for staff, but just like with everything, they also come with their fair share of downsides.

Not least is the task presented for the employer and employees in making sense of the tax system, but also the potentiality of racking up costs with high purchase prices and maintenance issues.

But these cons aren't putting people off. As a study last year proved, showing that every year around half of all new cars sold in the UK are sold to companies for use as company vehicles.

It all comes down to taking more care and consideration in the process of deciding if company cars are right for your business. So much so that the role of company car fleet manager is growing rapidly among medium and large businesses.

Let’s take a look at why that is and also explore some of the reasons running a company car fleet may not be for you and your employees.

Greater Mobility And Flexibility For Employees

No doubt one of the most attractive reasons for providing company cars is the mobility and flexibility it offers employees.

This is especially true for employees with families and children. Having access to a second car can give employees more freedom and control over their journeys and day-to-day schedule, in order to better separate their work and family life. Business trips don’t have to disrupt the kid’s swimming lessons, and your partner’s individual work plans don’t have to cause any daily conflicts.

And for staff who don’t have their own vehicles and rely on public transport (which is prone to be late and unreliable) to get to work, a company car can be a much more productive option.

Make Location Less Of An Issue

Maybe the location of your offices aren't served by public transport, or are a little out of the way, or maybe your staff work unsocial hours; whatever the case may be, providing company cars can do a lot for the issue of location.

That also means when it comes to taking on new employees, you have serious bargaining power to outweigh any barriers due to where you’re based.

Extra Taxes For Employees

In recent years, governments have increased taxes to encourage the use of ‘greener’ and more fuel efficient vehicles.

The amount of tax you and your employees will pay is generally determined by a vehicle’s CO2 emission levels and list price (though older vehicles registered before 1998 are still taxed on engine size).

This means business and employees both need to consider tax implications thoroughly before making a decision on a vehicle, and also that running a company fleet could be uneconomical if many of your staff already have their own transport.

The Cost Of A Fleet Of Company Cars

Company cars don’t have to be pricey—some of the most popular company cars of the past include the Vauxhall Astra and Ford Focus. But the cost of running a whole fleet can soon add up.

Purchasing several company cars can be a huge investment for many businesses, leaving a considerable dint in the company’s disposable cash balance. For this reason, and many more, leasing is becoming an incredibly popular option for running a large fleet.

Depending on the company’s circumstances, company cars can be either highly valuable or an unnecessary extra cost and burden. If they are something your business and employees will benefit from, then they can be not only a great way of getting your employees from A to B on time and in style, but a great symbol of quality and care for your public image.

If you’d like to find out more about our company car fleet leasing options, leave us a comment or send us an email at

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