It was a big day for me in the early 1980s when I took delivery of my first company car. Not only did I have a brand new car, but I was also free from the perils of depreciation, maintenance bills, insurance premiums, and hefty finance repayments.
Today’s eager young executive lives and works in a very different environment. Finance is more readily available, cars are more reliable and are designed to enhance our lifestyles. The days of being happy just to have a car have long gone!
But the role of the young executive has also changed; before the digital revolution my job was about meeting people, building relationships and sorting out issues in the field. Although these functions are still important, they are not as crucial as they once were because we now rely on more immediate and more convenient forms of communication.
One thing that hasn’t changed though is the taxman taking his share; unless you choose an environmentally friendly car, tax is a significant consideration for both employees and employers.
So, does this mean the company car is a relic of a bygone age?
It’s hard to envisage a world where the company car has disappeared. The government may decide that its environmental objectives can only be met by continuing to offer tax breaks or grants to encourage early adopters of clean cars, but it could equally decide that the rising cost of fuel, congestion charges and the introduction of ultra low-emission zones across the country will be sufficient to encourage the switch to cleaner cars.
Whatever the long term brings, the right company car provided to the right employee is fantastic value for money. But perhaps it’s time to reassess our concept of the ‘company car’? At what point should we adopt a holistic approach to the provision of business cars, which may include a combination of car, cash allowance, Personal Contract Hire and even Employee Car Ownership?
Reviewing a car policy is never a waste of time and should lead to either an affirmation of the existing policy or the identification of a better way forward.
David Rawlings is director of BCF Wessex Consultants Ltd, a provider of multi-platform digital solutions to the industry.