Still in the fast lane.

AuthorKinsella, Rebecca
PositionLex Vehicle Leasing report on company cars - Statistical Data Included

All the odds seem to be against the company car but, according to Lex Vehicle Leasing's latest report, the industry still has its foot firmly on the accelerator.

It is not, you would think, the best time for the company car. Environmental pressures mean that the government is making it more and more expensive to drive, insurance is becoming more costly, and even parking places are under threat. But, while many commentators are predicting the end of the company car, there are some who think the opposite. For one thing, they say, it is one of the most popular employee perks available; for another, the British are wedded to their cars, and it is likely to take more than taxes to get them on to public transport.

All things considered, it was a busy year for fleet managers last year, despite environmental issues and spiralling motoring costs. As the national rail crisis forced more people on to the roads and fuel protesters threatened to bring traffic to a halt, there was little slack for anyone involved in fleet management.

Some people may argue that company car drivers are willing to accept high taxes because of the perceived benefits of having a company car, but it is possible that this acceptance stems from ignorance rather than choice. According to Lex Vehicle Leasing's latest annual report on company motoring, awareness of the personal tax implications for company ears is low.

And, interestingly, while company car drivers typically describe themselves as "good" or "very good" drivers, 33 per cent have had an accident in the past three years, compared with 22 per cent of all car drivers. This could be because of the amount of time they spend on the road, but there are still lessons to be learnt by fleet managers.

Where prices are concerned, list values have remained steady, although transaction prices are falling significantly. But residual values are falling even faster. Car prices in the UK are still higher than in the rest of Europe, largely because of the strong pound. Manufacturers have responded to consumer pressure with dramatic tactical deals, but are now being forced to cut list prices.

The Competition Commission report, published by the government last summer, aimed to reduce new car prices by an average of 1,200 [pounds sterling] per car but, because manufacturers pre-empted this development, the market was not unduly disturbed.

More dramatic changes are coming in April, however, when the new company car tax regime kicks in. The...

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