AFP refutes claims of company car decline
17 September 2020
Author: Sean Keywood
The potential for a decline in company car use due to the coronavirus pandemic has been downplayed by the Association of Fleet Professionals (AFP).
The organisation's chair, Paul Hollick, said that while reports of a few drivers opting out of cars because of the growth in video conferencing were probably accurate, the bigger picture was more complex.
In fact, he said, overall fleet numbers could even be growing.
He said: "It seems likely that we are going to see a degree of permanent structural change about how some functions go about their business.
"Sales and account management are probably the most obvious examples. The traditional, face-to-face manner of the monthly account management meeting is likely to be consigned to history in favour of Zoom or Teams.
"However, that only concerns a relatively small part of the company car parc. All the other reasons that cars are operated by employers- from job need to human resources considerations - remain in place."
Hollick said that the company car was still a highly effective tool for businesses, and in many instances the only viable transport option.
He said that while mileage for some may be reduced in the future, the journeys that they made were still important.
He added: "Also, while there are reasons why some employers might be reducing their company car numbers, there are other pressures creating growth. For example, consider the drive for electrification.
"Many employers are now committed, at a corporate level, to changing as much as possible of the transport on which they depend to EVs.
"They know that drivers who give up their company car for a cash option are overwhelmingly likely to choose an older, more polluting model. There are strong CSR reasons for retaining company cars."
Hollick said there were also credible grounds to expect growth in other forms of employer-based car provision.
He said this included cash allowance drivers looking to return to company car schemes to pick up the 0% BIK tax rate for EVs, and increased take-up of salary sacrifice schemes for the same reason.
He also said there were signs affinity leasing schemes were gaining in popularity.
Hollick then added: "We also believe there will be a dramatic increase in grey fleet management. Driving this trend is reticence on the part of employees to use public transport because of the risk of infection and choosing to use their own vehicle instead.
"Of course, employers bear almost as a great a responsibility for grey fleet use in legal terms as for company cars and employee-owned equivalents need to be closely monitored, especially in terms of risk."
According to Hollick, it is important for the fleet sector as a whole to resist the idea of a company car decline.
"I've worked in fleet for many years and one thing that I have found occasionally frustrating is that fleet managers could do more to promote their own, often significant contribution to the organisations for which they work.
"That does need to change and, in the wake of the coronavirus crisis, they should underline the benefits of company cars and vans, as well as the effectiveness of the profession of fleet management in general terms.
"The fact is that very few businesses could survive without access to road transport, whatever form it takes, and the current situation hasn't changed that core fact."