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Counting The Cost Of The Company Car Fleet

With businesses facing tough times ahead, Peter Eldon, managing director of car fleet solutions specialist Toomey Opticar, assesses the way forward for cutting costs.

The economic future looks pretty gloomy, if the daily headlines are anything to go by. The continuing fallout from the credit crunch and a troubled housing market, plus rising fuel and food prices, are increasingly affecting businesses and households alike.

So in these tough economic times, it makes sound sense for companies to cut overhead costs to protect their profit performance. The company car scheme is likely to seem a good place to start: after all, it can represent one of a business’s biggest overheads.

But businesses may see their options for cost-cutting as limited to driving a harder bargain with their supplier, or savvy resourcing, because they are understandably reluctant to reduce the value of the car benefit for their company drivers.

However, savings achieved via these routes will always be short-term, undermined by manufacturer cost increases and the inevitability of leasing chargebacks

The good news is that there is another, more effective solution for cutting company car fleet costs, which both enhances benefits and is sustainable over the long term. Even better news is that the savings it can generate dwarf anything that might be negotiated with suppliers.

Businesses need to look at the bigger picture – beyond negotiated savings – when it comes to cutting the cost of their company fleet scheme. The real savings come from reducing often unseen losses from  tax leakage and tax inefficiencies, which can add up to seriously large sums. Eradicating these costly tax leaks should be a company’s first priority before slashing budgets.

Toomey Opticar is uniquely able to match each company driver to the most tax-efficient funding type. It then uses monthly mileage recording to ensure that tax efficiency is maximised throughout the duration of a contract.

For clients with larger fleets, this adds up to savings of hundreds of thousands of pounds each year while benefiting drivers, by providing the data to give them a full cost appreciation of the options available. With a recession looming, there’s never been a better time to use tax efficiency to reduce costs - and it makes sound business sense to minimise tax leaks before cutting budgets.

For more details, contact Toomey Opticar on 01582 518181