DRIVERS SHOULD BE ENCOURAGED BACK INTO COMPANY CARS, SAYS LOMBARD BOSS
Significant Savings for Fleets and Drivers
If drivers are encouraged to take the company car option rather than cash they and their employers will both be better off, as well as reducing CO2 emissions, according to Lombard.
A recent report by accountancy firm KPMG concluded that company cars produce up to 40% less CO2 than those chosen by cash-for-car drivers, who frequently buy used vehicles with poorer emissions performance.
“A 40% reduction in CO2 equates to approximately 8mpg, which would result in a saving of around £600 in fuel cost over three years at today’s fuel prices, and considerably more if fuel prices continue to rise towards £2.00 per litre as predicted,” says Rob Bailey, Head of Lombard Vehicle Management.
“In addition the new 10% tax band for cars in the sub-120g/km of CO2 category makes the company car option far more attractive financially for drivers. In the past they would have had very little choice. However, not only have the numbers of sub-120g/km cars risen dramatically, but the quality and appeal of has been transformed, with manufacturers including Audi, BMW, MINI and VW producing super-efficient model derivatives which qualify for the 10% tax rate.
“Such cars also reduce the financial liability for employers, as they have to pay Class 1A National Insurance contributions on the value of employees’ benefits. When you factor-in the fuel savings, 100% first-year allowance for low-CO2 cars and CO2-based VED charges, it is clear that businesses can save considerable money if they keep drivers abreast of the their potential benefits to them of choosing a low-CO2 car and offer a choice list embracing the latest entrants into the sub-120g/km sector.
“We are in increasingly tough economic conditions, and if financial savings rather help maintain the effort to reduce our environmental impact then that is a happy bi-product of the situation.”
