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Company car remains resilient, according to Arval survey

Date: 30 June 2020   |   Author: Simon Harris

The company car looks set to stay as the business travel method of choice, despite the emergence of new mobility alternatives, new research shows.

Fewer than one in five UK businesses (18%) say they believe their company drivers would give up their vehicle for any of a range of other options, including a mobility budget, car sharing, ride sharing or a mid-term rental arrangement, according to the Arval Mobility Observatory research.

Shaun Sadlier, head of Arval Mobility Observatory in the UK, said: "At a time when the company car is undoubtedly changing, perhaps more than at any other time in living memory thanks to the arrival of new forms of power, these results show how resilient it remains within UK corporate culture.

"The reasons for this are simple - the company car is an extremely time-efficient and cost-effective means of transport as well as being a strong employee benefit. Mobility solutions will need to match or exceed these advantages if they are to compete in the market."

He added that even among respondents who thought their drivers would give up their company vehicle, most of the alternatives chosen often represented an alternative method of car provision - which is even more prevalent post-Covid-19.

"If you look deeper into our research, the attachment to the car is even more marked. Among drivers who would give up their vehicle, the vast majority of the alternatives they would consider are arguably different methods of accessing a car using company money, from finance schemes such as private leasing or salary sacrifice, to medium-term rental. 

"In fact, looking at the figures in that light, just one in 20 fleet managers report that their drivers would give up their company car for a non-car solution - a mobility budget - and even that may ultimately be spent on a car.

"What this shows, we believe, is the degree to which business thinking when it comes to mobility is about reframing their relationship to the car and using other options alongside it, rather than a wholesale adoption of alternatives. 

Sadlier added that the reasons why employees favoured company cars were easy to understand and also shown in the Arval Mobility Observatory research. 

"As well as being an efficient and effective means of business transport, a company car is a very easy means of ownership, with everything effectively taken care of for the employee, who can also benefit from more regular access to new technology. This is why it remains such a popular benefit, whether it's an essential component of a job or as an employment perk."

Would you anticipate that your drivers would give up their company car for these alternatives?

  Total % 10 employees or fewer 10-99 employees 100-999 employees 1,000-plus employees
Private lease or salary sacrifice 10 5 15 12 13
 Mid-term rental 6 5 9 7
 Car sharing 2 6 10 12
 Ride sharing 7 4 9 4 12
 Mobility budget 5 1 4 10
 At least one 19 9 19 21 27

What is the main reason you believe encourages your drivers to stay with their company car instead of using mobility alternatives?

(Responses: Total %)

Ease of motoring, with all services provided by the company: 30

Not having to finance their own vehicle: 20

Delivery of a new car every 3-4 years: 12

No risk of ownership: 10