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Author Archives: Chris Proud

Remove significant cost from your car fleet. Get your personal cost-reduction report

Remove significant cost from your car fleet. Get your personal cost-reduction report

Company car benefit for professional, managerial, executive and other client-facing employees remains a highly attractive incentive. It can be both a powerful and persuasive competitive advantage when recruiting and retaining top talent and helps an employer develop a standout rewards package. It can also, however, be a massive investment, and in larger businesses it is typically the second biggest cost category behind labour. Experience suggests that operating 100 company cars will typically cost about $1.2m per year.

The complexities and nuances of a company car fleet supply chain mean there are massive opportunities for cost creep throughout the life of a contract. Indeed our own research into a company car fleet of over 2000 vehicles shows that unplanned and variable costs account for over 24% of overall fleet spend. To mitigate this cost creep it is important to work through all the possible tactics for creating a slick and cost-efficient supply chain that will control cost and remove the risk of unplanned spend.

We have outlined 28 tactics that all help remove cost from a company car fleet. They are categorised by the savings they will generate and the complexity of implementation. We have developed an interactive tool that will produce a set of personalised tactics based on the selection of the following:

  • Time
    • This allows you to select the timescales you have for delivering the cost-savings. The longer the time scales, the more likely a higher level of savings.
  • Expertise
    • We recognise that not all those with a responsibility for fleet have a detailed understanding of a fleet supply chain. This variable allows you to select your level of expertise about fleet, from basic to expert.
  • Employee Impact
    • Company cars can be very emotive and some cost saving tactics will have greater employee impact than others. You can select the level of employee impact that you are willing to accept, influencing the tactics that are suggested.

Plugging in your status across these three variables will result in a personalised set of tactics that could be employed to remove cost. They will also be presented on a chart which show likely savings and how complex they are to implement.

To establish your personalised tactics to remove cost from your company car fleet simply enter the three responses to the variables at Fleetworx Fleet Cost Saving Tool and download your personal report

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Driving in the EU after a no deal Brexit – Company car driver briefing

Driving in the EU after a no deal Brexit – Company car driver briefing

So we are fast approaching Brexit deadline day. Like it or not, it could be a no deal Brexit awaiting us on the other side of March. But what are the everyday implications for UK companies running a company car fleet and especially those whose drivers need to drive or take a car into the EU. Here is a very quick no deal Brexit briefing indicating what fleet owners need to do in the event of leaving on 29th March without a deal.

  1. Licence – drivers may need to obtain an International Driving Permit (IDP) to drive in the EU. There are different types of IDP and they will depend on in which country you are driving. Be careful to research the type that will be needed by your drivers’ as they could be turned away at the border or face fines if they don’t have the correct IDP.
  2. Vehicle number plate – even if your vehicles have a euro-plate, vehicles may need a GB sticker. Bizarrely, the vehicles will not need a GB sticker to drive outside the UK if a euro-plate is replaced with a plate that features the GB sign without the EU flag!
  3. Motor insurance – if the UK leave without a deal then drivers will need to carry a motor insurance Green Card when driving in the EU and EEA.

It is important to remember that all of the above applies to Ireland, so any driver movement across the Irish border will need to adhere to these guidelines, something that, if not planned, could catch out many unsuspecting company car drivers.

So, other than some regulations around data protection that may be required, the above appears to be the extent of the implications if the UK leaves the EU without a deal – a little bit of short-term pain for company car fleet operators, and their administrators, but nothing too challenging.

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Transitioning Car Fleet Supply – Get The Reward You Deserve

Transitioning Car Fleet Supply – Get The Reward You Deserve

Out with the Old, in with the New

Tendering for new fleet suppliers is a necessary process for most larger organisations and can deliver substantial savings opportunities.

Most procurement professionals tasked with going to market for leasing services will have had their eyes on a substantial prize at some point, whether it be through direct lease cost savings, new business incentives or even just a more focused supply chain.

Sometimes the challenges come not from getting the deal on the table, but from what to do about getting this deal accepted and then, importantly, delivered across the business.

Internally, instinct will be telling the key stakeholders that this will mean a whole lot of work for them and their teams as they will have to manage more relationships, educate a new supplier in the workings and the culture of the business and deal with additional sets of management information.

Additional complexity is a difficult sell in modern businesses whose natural instinct is to focus on core activities.

Be Careful: There’s Knives Around

The other key challenge comes with managing in the new and managing out the old supplier(s).

The core issue is that with vehicle leases, you are tied to that supplier until the lease ends, which could be 4 years hence.

It’s like getting divorced but sharing the kitchen with your ex for the next 4 years; it’s going to be sometimes less than helpful, pretty tense and you’ve got to be careful, because there are knives around!

The ‘knives’ in this case are the variable cost factors that will be brought into play to ‘max out’ the profit opportunities for the outgoing supplier(s).

The new supplier will be excited to get up and running with your new business and will undoubtedly resource the implementation, and provide a plan and personnel to support process integration.

Unfortunately there is little they can do to support the removal of the old supplier –  it’s like introducing your new spouse in the kitchen scenario – basic compliance is the best that can be expected but it’s likely to end up in tears!

It would be fair to say that the broader the reach of the fleet and the more entrenched the supply chain, the greater the pain of change that will be experienced.

This is particularly true of ‘outsourced’ solutions where little or no internal resource retains responsibilities for daily activities – where it becomes difficult to merely lift away activities from the outgoing supplier through transition.

Let us Ease the Pain of Change

It is not uncommon for fleet tendering projects to fail to result in change.

This is not because substantial savings could not be achieved or service vastly improved, but because the anticipated ‘Pain of Change’ was not palatable to key stakeholders in the business, or those stakeholders could not perceive how the roll-out could happen without severe business disruption.

Fleetworx can significantly reduce that pain of change through a carefully managed fleet transition process.

We provide expertise, systems and resource at the right point and in the right amount throughout the transition period, until such time as a full handover to the new supply chain can be achieved.

For more information about how Fleetwox can support your car fleet transition programme download the free ebook “Transitioning Car Fleet Supply. Get the reward you were promised”

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Company Car Fleets – Single or Multi Supply? You Decide.

Company Car Fleets – Single or Multi Supply? You Decide.

When considering a company car fleet supply process, fleet stakeholders are often in conflict over the type of process with which to engage.

Some departments are often in favour of a single supply agreement so they can build relationships with one supplier, whilst other departments encourage a dual or multi-supply so they can “horse-trade” the leasing cost and “bank” a saving.

Choosing between single supply or dual/multi-supply is central to a company’s fleet model, and making the correct choice at the beginning of a supply term is essential; as the wrong choice could have a significant impact on the overall fleet cost.

But what are the relative merits of the two supply choices and which will be better for your business? Read on or download our simple infographic outlining the differences.

SINGLE SUPPLY – PRO’S

  1. Contact Leverage

The leverage generated by putting all the business with one supplier can provide the following benefits:

  • It develops a strong negotiating position which can help eliminate contract re-writes;
  • It can help remove any profiteering by the lessor on end-of-contract charges for damages, and restricts the charges to the actual costs to the lessor and no more;
  • It can help protect against high 2nd tier supplier costs with large lessor rebates;
  • The client will be able to negotiate greater transparency.
  1. Budget Accuracy

As legacy suppliers disappear, only one PO will be required per supplier. This will inevitably produce more accurate budgeting.

  1. Relationship Management

Relationships only need to be maintained with one supplier, resulting in slicker processes that reduce the administrative burden of managing multiple suppliers.

  1. Realistic Pricing

Although still needing to be competitive, the headline lease pricing of a single supplier will tend to be more realistic and more reflective of total cost than that of a dual or multi-supply arrangement.

SINGLE SUPPLY – CON’S

  1. Complex Savings Calculations

True savings gained form commercially advantageous terms are more complex to determine than those from directly competing lessors.

Very often, the final savings cannot be determined until individual contacts have matured.

  1. Detailed Contract Component Knowledge

A detailed knowledge of the contract components is required to understand the competitiveness of the supplier. This detailed knowledge is also important when managing the pricing structure and avoiding cost creep.

  1. Governance Need

Resource needs to be applied to governance processes within the client, as the single lessor cannot be expected to “sign off” their own invoices.

DUAL/MULTI SUPPLY – PRO’S

  1. Savings Transparency

Competitive bidding for each individual car can demonstrate accountable savings.

Although it should be noted that these are theoretical savings and may not reflect the whole life cost of the vehicle.

  1. Reduced Governance Burden

Some of the administrative burden of running multi-supply can be allocated to fee-charging external multi-bidder intermediaries. These are also ideally placed to conduct local governance tasks.

DUAL/MULTI SUPPLY CON’S

  1. Cost/Resource Burden

The client may need to pay fees to an intermediary company to transact the multi-bidding or resource it internally.

  1. Risk of Contract Deviation

The competitive nature of the rental is only maintained so long as the contract runs to the original deal. As contract parameters can change, the headline price can be theoretical, which means the contract may not produce the cheapest option.

  1. Supplier Selection

Suppliers must be churned regularly to exploit the opportunities of multi-bid, otherwise savings may only be theoretical as the suppliers may be the most expensive on the market.

For a simple infographic of supply options click here. This article is one in a mini-series featuring the complexities and challenges of managing fleet supply contracts. Visit www.fleetworx.com for other resources such as our ebook explaining how to Avoid Fleet Commercial Contract Trapdoors

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Lifting the Lid on Business Mobility – Car Sharing

Lifting the Lid on Business Mobility – Car Sharing

As companies are being forced to reconsider the financial and carbon cost of employee movement, a wide range of service providers are disrupting the market and providing mobility solutions that are shifting the focus from long-term leasing and ownership, to usage and mobility.

One of those services is the development of car sharing.

Many companies have taken the concept of the company carpool, enhanced it with technology, and transformed it into a car-sharing scheme. It is the development of the technology that makes the creation of a sharing scheme much more attractive and effective than even 10 years ago, with advancements such as real-time app-based booking and keyless vehicle access.

According to Fleet Europe, the car-sharing market is expected to grow at an annual rate of 26%, with 18m users by 2020. The market is driven by the rental companies who have gone through a period of product development and acquisition to offer the majority of the corporate car sharing schemes currently available. DriveNow recently divested by Sixt, and Ubeeqo by Eurpocar, appear to be leading the market with penetration across Europe.

Car sharing is quite a step-change for companies and employees alike, and the introduction of schemes will always require careful planning and consultation. The main practical requirements are managing the optimum number of vehicles so that availability is never compromised. It is stated that 1 car share vehicle can replace up to 8 standard company cars, however, a study of travel habits and a detailed understanding of travel planning is needed before the correct ratio of vehicles to employees is introduced.

As company cars are still a powerful and emotional draw for employees, some providers mitigate this by offering an integrated car share and mobility credit allowance. This means a user can relinquish their company car and downgrade to a smaller car within a car share scheme. They have credit up to the value of their allowance that they use on the car share use, however, they can also use that for evening and weekend hire.

The “sharing” of the vehicle can be handled in many ways:

  • Station based – where the cars are centrally located and must be hired and returned to the same station.
  • Free-floating – where the cars are parked within zones and are located and unlocked via a booking app, after the journey they can also be dropped anywhere within a fairly widespread zone.
  • Intra-corporate – where businesses located within industrial /business areas collaborate and share vehicles between their employees.

There are two business models for developing a car-sharing scheme:

  1. Use technology to convert part of an existing fleet. Companies such as Ubeeqo offer technology to assist in this.
  2. Enlist the services of specialist provider such as DriveNow or Car2Go and make use of their vehicle fleet and booking app.

Car sharing is one of a number of mobility solutions that are being implemented by businesses across UK and Europe. To understand more about business mobility and what it could mean for your employee movements Fleetworx have created the ultimate guide to business mobility.

Fleetworx provide client-side support in the design and delivery of cost-saving and carbon-saving company car policies and mobility solutions. To find out how Fleetworx could help you review the mobility options in your business contact Graham Rees or Tom Osborne on +44(0)1926 353 300 or visit www.fleetworx.com

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Business Mobility: Everything you wanted to know about mobility (but didn’t know who to ask)

Business Mobility:  Everything you wanted to know about mobility (but didn’t know who to ask)

“Business Mobility” and indeed “Mobility” is a hot topic. Whole swaths of the fleet industry are refining their propositions around the term.  Leasing company’s such as Alphabet have repositioned themselves as “business mobility partners”, whilst the CEO of SIXT suggests customers are not concerned about their method of transport as long as they get quickly and conveniently to their destination.

But what actually is Mobility? And what does it mean for your business?

Traditionally, company car fleets have been the answer to a company’s employee mobility requirement. But as the approach to mobility is drawn into sharper focus, the company car is rapidly becoming only one part of a broader mobility mix.

Several key macro factors are influencing the mobility landscape across Europe and the market is responding with a raft of mobility start-ups and new product development from mature suppliers. The very real threat of vehicular access bans within inner cities is forcing companies to reconsider how their people move around their territories. This, coupled with the changing attitude of the millennials (under 35) toward mobility, has resulted in mobility products based around reducing the size and number of cars and switching people into car sharing schemes, public transport and cycling.

Mass digitisation of society has also influenced the way in which people travel, and the introduction of Mobility as a Service (MaaS) has allowed travellers to consider transport as something they purchase when it is needed, rather than having permanent car ownership. Indeed, a recent study by ALD found that 50% of Europeans consider car ownership as non-essential.

In addition to the changing attitudes of society at large, several market forces are also influencing the way in which companies are dealing with mobility. The reduction of cost is an ever-present challenge and understanding the efficiencies of how a company moves its people is essential to this task. Reviewing total cost of mobility, rather than managing the car fleet in isolation and reviewing total cost of ownership, is an increasingly popular practice among many European companies.

The review of the mobility category as a whole, rather than in silos of car fleet, business travel and expenses, also helps a business calculate its total CO2 emissions attributable to transport, as well as understand the efficiency of travel and employee productivity.

Recruiting the brightest new talent remains very difficult and as the younger generation move into more senior positions, new mobility solutions can exploit their changing attitude and be used as an attractive recruitment tool.

Although there is a noticeable market shift toward mobility, many organisations still do not understand what it means and how it can help their business. To assist companies with this change Fleetworx have created a straightforward guide to the services that make up business mobility, what it means for your business and how to introduce it.

To get your free copy of this Ebook click here or call Graham Rees or Tom Osborne on 01926 353 300 to discuss how mobility may work in your business.

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How to Prepare Your Car Fleet for External Factors such as WLTP

How to Prepare Your Car Fleet for External Factors such as WLTP

WLTP is firmly on the horizon and looming large. As of 1st September 2018, all new car registrations will need to issue CO2 emission based on WLTP (Worldwide Harmonised Light Vehicle Test Procedure) rather than the previously applied NEDCA.

A few months ago we talked here about the impact WLTP will have on company car fleets, suggesting the following three challenges:

CO2 Impact

The movement of official CO2 emissions data for a car fleet will impact a company’s carefully constructed fleet CO2 emissions target

Capital allowance claims

It will impact capital allowance claims as cars will move above the new threshold for claiming the standard rate of 18% which, as of the introduction, will be 110 g/km.

BiK Impact

In many cases, NEDC2 will effectively move the BiK of a car two brackets higher.

Unless a company has very tight control on their car fleet structure and understands the impact of these changes to a granular level, it is likely that they attempting to manage these impacts by currently observing two possible directives on company car orders:

  1. as only a selected few manufacturers have released their completed WLTP emissions figures, issue a restricted company car order list, covering only those that are WLTP compliant; severely limiting employee choice.
  2. allow older models of cars which haven’t been tested for WLTP, whilst anticipating the possibility of a negative impact on BiK tax and employers NI contributions when the actual WLTP figures are released. This could result in a hike in personal taxation and/or a request to cancel the order.

Whilst the above two solutions allow a business to navigate the uncertainty of WLTP, they are not ideal and could cause confusion, employee resentment and cost issues.

To be better placed to deal with the impact of WLTP many businesses employ the services of a Fleet category partner. A fleet category partner operates as client-side support, managing the supply chain and ensuring a helicopter-view of the whole fleet dynamic and the supply chain.

Having a completely transparent overview of the car fleet, with a firm grip on costs, compliance and replacement cycles, means the business can understand the sensitivities of the fleet to external factors such as WLTP, resulting in quick and informed decisions.

So rather than taking a compromised approach to managing WLTP, like the scenarios above, having a detailed understanding of the fleet means strategic decisions can be made that will result in the best possible outcome.

A number of our clients who are dealing with WLTP are using their transparent view of its impact to manage their order procedures accordingly, putting directives in place that enhance the medium and long-term benefit to the employee and the business.

Ultimately, having a fleet category partner allows a faster, better informed and more controlled policy procedure that can react accordingly to extraneous factors such a compliance, taxation and cost increases.

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Imminent IFRS16 Accounting Standards Will Impact Car Fleets: Make Them Work to Your Advantage

Imminent IFRS16 Accounting Standards Will Impact Car Fleets: Make Them Work to Your Advantage

The new IFRS16 accounting standard is effective from 1Jan 2019 and will affect publicly listed companies that operate a leased company car fleet. It is broad reaching legislation that fundamentally changes the way organisations report their leases, forcing them to be recognised under an on balance sheet accounting model.

Currently such leases are classified as Operating leases and are kept off balance sheet. These Operating leases’ will now only apply to leases which are 12 months or less or where there is a ‘low value’, which is generally accepted as less than $5k.

Consequently, companies who use a lease funding model to procure their car fleet are now obliged to report this information in a different, more sophisticated manner. Currently the leasing contracts can be reported on the P&L account, meaning there is no need to have such a detailed insight into the data held within each contract.

And here is the rub.

By moving the reporting to the balance sheet, companies must now have a far more robust leasing information system.

Many of our clients are working with their accountancy partners to establish a robust means of recording data on all leases throughout their business.

Our clients have the substantial challenge of understanding what specific values they need to capture in the first instance and thereafter what may change, all proving fundamental to the design and build of their ‘lease information systems’.

Discipline issues

What has taken many by surprise, is the huge variation of lease structures and reporting practices around EMEA, limiting the granularity of reporting in some cases to the lowest common denominator. It is not unusual in some less developed markets just to receive a single monthly rental figure which includes all services whereas, in others, finance and services are itemised to a granular level.

Also, what is evident, is that most businesses up to this point, have lacked discipline and structure when it comes to recording their vehicle lease contract arrangements with their suppliers.

At best, these are dispersed across the region and, at worst, contract documentation cannot be located at all.

And the retrieval of this data from across the EMEA region is perhaps the most challenging aspect of all. Communicating with sometimes more than 80 suppliers from 30 plus countries, and attempting to extract the required data in a standardised format, is no mean feat.

The idiosyncracies of vehicle leasing also add complexity to the recording and reporting process. Unlike equipment or building leases, where the rental and term remains static, vehicle rentals and end dates can change due to mileage variations. So, not only do the supply chain need to be engaged once to collect the initial data, they also need to be kept engaged so changes in rental or terms can be accurately reported.

Collecting lease data accurately and timely will be critical to the successful adoption of IFRS16 reporting. The challenge however, as we have found, is that a complex supply structure creates a complex array of data formats. And where corporates often have centralised structures with scant resource, it is very difficult to maintain dozens of supplier relationships at the right level to retrieve and manipulate the information to the right standard.

This ability to accurately collate and manage lease data is where Fleetworx clients have a substantial head start on their peers. As part of our “Fleet Category” management services, Fleetworx holds relationships with all the fleet supply chain on ours clients’ behalf. Which means we remove the pain of collecting critical contractual data and monitoring any contractual changes due to mileage variations or otherwise. Crucially, this data is also validated, cleansed if necessary and stored in Fleetworx Centrax database.

The value for our clients comes from the single report we produce which consolidates their lease data from across the EMEA region: helping them manage their “lease information systems” more closely, more accurately and less painfully.

We consider the introduction of IFRS16 an ideal opportunity for fleet owners to align their reporting systems, develop closer relationships with the fleet supply chain and gain a more thorough understanding of the fleet category cost. By its nature this then provides an excellent opportunity to deliver best practice and savings.

With support from a professional category management partner like Fleetworx, the task of developing a birds-eye view of the fleet category can be hugely simplified, whilst the rewards can be significant.

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Exposing Hidden Car Fleet Contract Costs

Exposing Hidden Car Fleet Contract Costs

When costing a fleet supply agreement, and choosing the right funding model and appropriate supplier, it is important to understand that the price quoted against a vehicle list is merely a price at a snapshot in time, and on a very specific configuration.

It is a price that is being provided for the purpose of comparison, either between other suppliers in a multi-bid scenario or against other suppliers in a single bid scenario. It is extremely unlikely that it will reflect the actual cost of operating the fleet over the term because of two main reasons:

Price creep
As the fleet expands and the legacy supplier is removed, the new leasing price of each type of vehicle will change over time: likely to result in an increase in the headline price that the contract was signed against.

Additional supplier margins
Although the provider may have offered significant signing-on incentives to win the business, they will always be factored into the overall contract pricing, very often with sophisticated systems to recover this investment.

And it is these margins that the supplier can apply to consumables and services that need to be understood, so they can be managed.

It is a common misconception that the only revenue elements that can be negotiated are the management fee and the margin on the financing interest.

Most fleet stakeholders assume that focusing on these means they are in control of the contract costs, however, that is, unfortunately not the case. There are in fact six cost categories within a typical leasing contract that are used to generate revenue for the lessor.

To understand these six commercial trapdoors Download the fleetworx e-book “Fleet Contracts: Avoiding Commercial Trapdoors – A Practical Guide for Procurement Departments” .

 

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How Structured Company Car Schemes Can Improve Employee Wellbeing

How Structured Company Car Schemes Can Improve Employee Wellbeing

The recent REBA crafted report on wellbeing clearly demonstrates the growing strategic importance of wellbeing strategies and services. There is strong evidence of the high profile that wellbeing now enjoys at board level, and the subsequent clear recognition of the link between employee wellbeing and recruitment and retention, employee engagement and productivity.

It is the firm belief of many REBA members, and report contributors, that a strategic and properly measured wellbeing programme can make a powerful impact. REBA expect the growth of such programmes to soar in the short to medium term, with 45% of companies researched already having a defined wellbeing strategy, and 49% of those without planning to introduce one this year.

Stressful working environments (73% of respondents said a high-pressure work environment is the biggest threat to staff wellbeing) and personal money concerns are widely acknowledged as key wellbeing challenges. As such, companies are keen to explore mental health and financial wellbeing campaigns that can alleviate these pressures and contribute positively to their wellbeing efforts.

Employee mobility and the provision of mobility solutions is one such area that can have a big impact on workplace stress and financial anxiety. Company cars remain a popular benefit perk for many employees, however the industry is seeing a small but growing shift toward cash alternatives, relieving the employer of much responsibility and shifting it to the employee. And in the confusing and predatory world of car retailing, this is not a recipe conducive to employee wellbeing.

Most fleet owners manage their car selection design quite tightly so they can exert some control over their fleet and the type of vehicles driven by their employees. A well organised and correctly specified car fleet provides a more controlled environment for both the employer and the employee; assisting safety, comfort, and productivity.

Company Car Support Network

As the fleet supply chain exists to manage the vehicle, and support the driver, it also removes the personal burden of responsibility for the upkeep of the vehicle, allowing the employee to be free from the distractions and compromises of personal car ownership. However, once this support network is removed and the requirement to source, maintain and eventually dispose of a personal car, albeit with employer financial support, becomes the responsibility of the employee, then the convenience of a company car compared with a cash allowance is drawn into sharp contrast.

Wellbeing implications

If a company decides that a cash allowance is how they wish to mobilise their workforce then there will be a number of implications that could impact employee wellbeing:

Unfamiliar responsibilities
Switching people into a cash allowance scheme will expose them to a number of situations with which they may not have been familiar for many years, such as financing, insurance, maintenance, all of which can cause anxiety, become huge distractions and create financial challenges

Financing arrangement
A personal vehicle needs to be sourced and, unless the employee has the luxury of being able to afford to buy a car outright, it is likely it will need to be financed. (this also raises the issue of exerting some control over the quality and age of the vehicle being used) Car purchases could be private or most likely Personal Contract Plan (PCP) or Personal Contract Hire (PCH) schemes, for which there is usually a deposit required. A cash allowance will provide a monthly fixed sum which can be used to cover the financing payments,  but it will not cover the deposit; something that will need to be covered by the employee.

Minimum term commitment
If the car is to be financed there will be a minimum term to which the employee will need to commit. If their employment circumstances change then they will be committed to the term or likely face early termination penalties.

Insurance
Insurance will need to be arranged by the employee and as most employees may be coming off the back of a company car (it is often difficult to prove no-claims from a company policy) they may struggle to negotiate cost-effective and appropriate levels of cover. And in the event of a claim the typical excesses of £300-£500 need to be paid by the employee.

Maintenance
Company car drivers have the luxury of a centrally applied maintenance arrangement. MOT’s are covered, servicing is just an email away, tyres replaced at the drop of a hat. Dealing with these without the support network of the employer can lead to many hours of sourcing, negotiating and appointment making, as well as creating a serious concern over its financing.

Roadside assistance
Company-wide roadside cover is universally applied to a company car fleet, whilst cash allowance drivers fend for themselves. It is not a particular onerous task to appointment a roadside recovery partner, but it still requires effort and expense.

In-Life and End-of-Contract Damage
If indeed the employee arranges their vehicle on a PCP or PCH, unforeseen operating costs such as damaged tyres and wheels, minor scratches and non-routine maintenance costs are typically not covered under either the maintenance or insurance programmes. Employees will be liable to a recharge if their vehicle is returned with what is classed as unfair wear and tear, a set of tyres for a typical fleet car can cost between £800-£1000.

Excess Mileage
When the employee negotiates their vehicle financing they can be easily lured into an attractive deal with relatively low contract mileage, often overlooking the punitive penalties that are imposed if they exceed the contracted amount on vehicle return.

And even the offer of a cash allowance can have consequences for company car drivers. If a company car driver has deliberately chosen a more energy efficient car with a lower BiK tax point, and their employer offers a cash alternative, then the employee will be charged at the higher of the cash or car benefit value. A consequence that the driver may not even be aware of, and ill-prepared for, until they get their tax bill.

The positive impact on employee wellbeing of a well-designed and carefully administered company car programme compared to a cash allowance scheme should not be underestimated. Personal car ownership brings with it a whole host of challenges that employees need to manage, adding anxieties and pressures that can be hugely distracting and stressful.

Fleetworx can design and implement a range of company mobility solutions that will deliver long-term savings and provide a structured framework of employee mobility that can deal with the ever-changing demands of modern business.

To understand more visit www.fleetworx.com.

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