Company car fleets by numbers

There’s nothing like the data to tell you what’s going on in the world of company cars. We reveal the stats and trends you need to know to stay one step ahead in the fleet management game.

THE OVERALL DRIVING PICTURE IN THE UK

Almost 40.75m people in the UK hold a driving license. That’s 62% of the total population driving 37.9m vehicles licensed to travel on UK roads. These figures form part of a long-term trend of increasing vehicle registrations although during January to March 2018 saw the first dip in Q1 registrations since the latest recession. Whether this is a blip or the start of a slow down in new car purchases remains to be seen.

One trend that continues is the decrease in new diesel registrations with a sharp year-on-year decline in Q1 registrations of 33%. This is likely to be in response to hikes in road tax for diesel cars and nervousness around additional charges like the congestion and emission zone fees that look likely to come into effect across the UK.

However, cars remain the most popular form of transport with the vast majority of journeys – 65% – made by car, indicating that this mode of transport still plays a significant role in many people’s lives. It also explains the continuing popularity of company cars as part of the total reward package, as data in the next section reveals.

HOW DO CARS FAIR IN YOUR EMPLOYEE REWARD PACKAGE?

According to a Willis Towers Watson survey, company cars frequently form part of the total reward package in the UK:

• 75% of UK companies offering company car benefits
• 90% of managerial employees eligible where car benefits are on offer
• 55% provide a car
• 45% provide the choice between a car and a cash allowance

Where employers provide company cars, there’s a trend towards directing employees towards greener options:

• Alternate fuels – in the UK, 67% of companies allow employees to select alternatively-fuelled cars including LPG, biofuel, hybrid and electric cars. This places the UK in third place behind Sweden and the Netherlands with 70% and 72% respectively allowing alternative fuels.
• CO2 emission ceilings – when it comes to placing a CO2 emission ceiling on the cars employees can choose, the UK is ninth amongst European, Middle Eastern and African (EMEA) countries. Just 41% of UK employers limit the emissions of company cars, perhaps preferring tax regimes that reward greener cars to do the heavy lifting for them. However, even in Sweden and the Netherlands, the percentage is similar indicating that, when it comes to make and model, employee choice is still a major aspect of total reward.

UNDERSTANDING THE MAKEUP OF COMPANY CAR FLEETS

European company car drivers are voting with their feet – albeit slowly – when it comes to green driving. 1.5% of fleet cars are now either plug-in hybrid or fully electric. In the UK, fleet drivers are choosing plug-in hybrids over fully electric vehicles at a rate of 2.6 to 1.

What does this mean for your fleet? Again, choice is important, so partnering with a car benefit provider with a wide range of plug-in electric and battery-electric vehicles is key to keeping your drivers happy.

Make sure your provider has the following green makes and models available on their scheme as these were some of the most popular ultra-low emission vehicles in 2018:

*vehicles you see in your account may change depending on your company/organisation settings, salary, and/or other factors.

SO WHERE ARE COMPANY CAR FLEETS HEADING?

According to Deloitte, fleet cars – whether they’re operated in-house or via car benefit leasing providers – account for an increasing percentage of new car registrations. In the UK fleet cars:

• Accounted for 37% of new registrations in 2012
• Accounted for 38% of new registrations in 2016
• Are predicted to account for 41% in 2020 – that’s almost 1.2m cars

And Deloitte predicts that the corporate channel will continue to increase its market share into 2021 too. In the UK, this is down to two main drivers:

1. An increase in employment
2. Salary sacrifice schemes making new cars more affordable

With greater numbers in work and more companies introducing salary sacrifice arrangements, increasing numbers can afford to get behind the wheel of a new car.

However, it’s not all plain sailing. The risks on the horizon include Brexit uncertainty and the government’s new car tax regime. Deloitte expects around 50% of the 970k British employees paying benefit-in-kind tax on their car will be impacted by these planned changes.

TAKE POSITIVE ACTION THROUGH GREEN CARS

While nobody can do anything about Brexit, companies can take positive action around company car tax by introducing green cars to the fleet and car benefit schemes. With corporate fleets expanding, this will be an essential tactic to make the most of the new tax regime and control fleet costs.

And it will also enable companies to continue provide the car benefits their employees want while reducing the company’s carbon footprint.

Tusker can help you future-proof your organisation with ultra-low emission vehicles, simply request a free demo of our scheme and find out more about various car schemes.