Restricting company car choice lists for cost control

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【Summary】Fleets are being forced to restrict the vehicles available on company car choice lists due to reduced discounts, rising lease costs, and long lead times. Rising costs are limiting vehicle choices and some fleets are only offering hybrid, plug-in hybrid, and battery electric vehicles. Restrictions on models and availability may cause employees to opt for cash allowances instead. Choice lists are becoming more restrictive and need to be reviewed frequently.

FutureCar Staff Aug 18, 2023 4:28 PM PT

Restricting company car choice lists for cost control

Some fleets are being forced to limit the vehicles available on company car choice lists due to reduced discounts, rising lease costs, and long lead times. The expectation that new entrants to the UK car market, particularly from China, would provide more options for company car schemes has not been met. Instead, fleets are facing increased costs and are having to restrict choice.

Steve Openshaw, group fleet and transport manager at Eric Wright Group, expressed his frustration with the situation, stating, "It's given me a massive headache. Costs going up, interest rates going up, discounts going down." As a result, the company has decided to only offer hybrid, plug-in hybrid, and battery electric vehicles on its choice list.

Elaine Pringle, fleet manager at Scottish Water, also mentioned the restrictions on vehicle models due to price increases. This raises concerns that employees may choose to leave company car schemes in favor of cash allowances that provide greater choice.

Denise Hawkins, fleet manager at Stannah Group, highlighted the issue of availability. Long lead times of 12-18 months and the lack of renewed discounts make it difficult to obtain certain models. Consequently, choice lists have become more restrictive and need to be reviewed and amended multiple times a year.

Some fleets have tried to enable employees to have access to a wider choice of models by increasing grades by £100 or more. However, Duncan Webb, fleet director at the AA, explained that this may not be enough to prevent the reduction in choice. Interest rates alone can consume most of the increase, leaving little room for other factors such as residual value or maintenance costs.

The challenges faced by fleets in maintaining a diverse choice of vehicles on company car choice lists are significant. The rising costs, limited availability, and long lead times are forcing fleets to make difficult decisions in order to manage their budgets effectively.

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