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Car Schemes: Getting The Balance Right

Car schemes can still be one of the most successful employee benefits if run correctly. The answer lies in achieving the right balance between costs and employee satisfaction, as Jim Salkeld explains.

Managing a fleet of any size can be a time-consuming task, and although keeping track of costs is a key responsibility, ensuring the chosen scheme works well as an employee benefit is just as important.  If it doesn’t, it can become pointless and counterproductive.

To be really effective, the car benefit must provide a high level of satisfaction for employees at the least possible cost to the business. Unfortunately, the days are gone when simply offering a company car was enough to impress recruits. Now, with complex tax implications and so many alternatives on offer, businesses must work a little harder. 

In an effort to meet this key objective, it is commonplace for fleet managers to assess their fleet as a whole and decide between company cars or some form of employee car ownership (ECO), whether it be a “free-for-all” cash scheme or a more structured ECO scheme. Yet neither option individually can provide a truly cost-efficient solution as driver mileage profiles can be so varied.

The solution should be to adopt a mixed fleet strategy (i.e. both company car and employee owned car) so that drivers can be offered the best possible choice of vehicle at least cost for them and their employer. Such a strategy will enhance the scheme for employees, improving staff motivation, retention and attraction.  

Perhaps not surprisingly, the administration involved in offering both company car and employee owned options can be daunting, and may prevent companies from realising the tax efficiencies and staff benefit opportunities available to them.

So where is the solution to meeting all of these criteria and achieving the cost savings and staff benefit enhancement that a mixed fleet strategy can deliver to your company?

Endorsed by fleet tax specialist Alastair Kendrick, Optifleet, the latest online driver management solution from Toomey Opticar, steers employees to the least-cost option (company car or employee owned car) at the point of selection, based on individual mileage profiles and personal choice. It also manages their driving experience thereafter, including online monthly mileage logging, online car selection, occupational road risk controls, maintenance, insurance, breakdown, accident management and mileage changes.

Taking full advantage of HM Revenue & Customs’ authorised mileage allowance payments (AMAPs) to help fund the employee-owned car, Optifleet minimises company costs while providing the variety and flexibility required by employees. Unlike many ECO schemes, there is no underpayment or overpayment, and no requirement for the costly "end of year" mileage reconciliation that can reduce or even eliminate promised savings.

With Optifleet, managers have an opportunity to strike the perfect balance between cost and employee satisfaction in a fully managed environment.

For more information contact Opticar on 01582 518181.