More and more businesses are offering company cars for employees, which comes with multiple benefits for both parties. Read on to discover why you should consider providing a company car to suitable members of staff and how to make the most of it.
What is a company car?
A company car is a vehicle that the business provides to an employee, which is usually for both business and personal use. Most employees who have a company car will travel a lot for work purposes, such as being out on the road on a regular basis. A common example is a regional sales manager who needs to drive around the country to visit clients, although many company directors, marketing and events managers, financial consultants and similar roles can also require a large volume of travel.
Can anyone have a company car?
The owners and directors of a business will usually have a company car, as well as members of the senior management team. However, you can actually offer any employee a company car if you think it will benefit your day-to-day operations, sales, customer service and annual growth, so it’s very much a personal decision.
How does a company car scheme work?
When a director or employee is given a company car, the vehicle will be paid for by the business on top of their annual salary. However, the employee will pay Benefit-in-Kind tax, which is calculated according to the vehicle’s market price, the employee’s income tax band, the age of the car, the engine size and fuel type, and also its level of CO2 emissions (hybrid and electric vehicles benefit from much lower tax obligations).
The benefits of a company car
There are multiple advantages that come with allocating company cars to certain employees, which is why many businesses choose to offer this perk to directors and managers:
No financial contract for the employee: The vehicle is paid for each month by the business, which means that the employee is not personally tied to the financial contract.
Fewer costs for the employee: It’s typical for the business to also pay for the insurance, maintenance, servicing and MOTs. On top of this, some companies decide to also pay for any fuel used for work-related travel, with the employee simply paying relatively low Benefit-in-Kind tax rather than expensive fuel bills.
Attract top talent: A company car is one of the most popular perks you can offer, so it can play a leading role in attracting the right candidates towards C-level roles.
Run a more efficient business: If your employees are dependent on trains and taxis, there will surely be cancellations and delays disrupting their schedules. This could result in a director or manager missing a client meeting or industry event, which can bring serious ramifications. When you choose company cars, the employee simply needs to factor in heavy traffic and they’ll always arrive at their destination on time.
Save money: Businesses that have company cars remove costly train fares and taxi fees from the equation. Whilst the vehicles (and perhaps their fuel) do of course have to be paid for, it can prove a lot more cost-effective than using public transport.
The benefits of company car leasing
There’s also the option for a company to lease cars for its employees rather than purchase them. This can prove even more affordable and strategic due to the following reasons:
No depreciation: A leased vehicle is handed back to the dealership after a set period, which means you don’t have to worry about losing value as the car ages.
A stress-free arrangement: When the lease ends, your business simply returns the vehicle and exchanges it for a new one without the hassle of trying to sell it.
Better vehicles representing your business: Leased company cars enable businesses to choose the very best makes and models. The ability to select a higher class of vehicle for less money will delight your employees and ensure that your business is always represented on the roads by professional and attractive vehicles. (As an added bonus, a modular vehicle wrap means that your staff are advertising your business everywhere they go.)
Exceptional features: You can also choose vehicles that are fitted with the latest safety features and in-vehicle technology, which could otherwise be too expensive if you were to purchase the car.
Are there any drawbacks to company vehicles?
The benefits of company vehicles far outweigh the drawbacks. Still, there are some factors to consider when deciding whether or not to offer company cars to your employees:
The cost: Due to the company paying for the vehicle (either as a financial contract or a lease), this cost needs to be included in your cash flow, budgeting and financial forecasts.
Liability: Even the most cautious and responsible drivers can get into accidents. If this happens, there will be an additional cost to your company.
Ownership: If the employee has a company car in place of a personal vehicle, they need to accept that it could be taken away from them by the employer at any time. They also have to hand it back immediately if they leave the company.
High-impact branding for company cars
Here at Brandfixx, we provide a very fast, affordable and sustainable alternative to the traditional kind of vinyl wraps that stretch over the entire car. By scanning the vehicle and creating a high-quality modular decal for each panel, we can brand up your vehicle in a fraction of the time and save you money in the process. This innovative branding solution is perfectly suited to a wide range of business vehicles, including company car fleets and taxis.
A particularly attractive feature of modular wraps is that if one area of the vehicle is scuffed, scratched or damaged, we simply replace that individual panel of wrap rather than removing the whole thing and starting all over again. This saves you even more money and minimises waste, making our modular commercial vehicle wraps a very wise choice for businesses of all shapes and sizes.
Get in touch
To find out more about our fast, affordable and hassle-free vehicle wraps, get in touch on 01482 686010 or fill in our contact form.