The latest survey of 470 finance directors, conducted by Financial Director in association with Hitachi Capital, finds that while fleet managers are employed in 41% of companies, finance directors and controllers are directly responsible for fleet management in 72% of companies without fleet managers.
The research also finds that contract hire (67% of respondents) is still the most popular choice for managing company car fleets. Outright purchase is also popular, with 56% of respondents buying their company cars rather than opting for finance leasing (19%) or contract purchase (10%). Most surprisingly perhaps, employee car ownership plans (ECOPs), which were expected to make an impact on the fleet market because of their tax advantages, have failed to interest FDs, with only 8% using ECOPs – although 18% plan to use them in the future. Commercial fleets are generally bought outright (62%).
More than half (53%) of FDs are offering cash to employees instead of a company car, with a further 14% considering cash-for-car options. More than one-third (35%) of respondents are reducing the number of cars in their fleet, 50% have switched to diesel fleets and 14% are switching to smaller car sizes, presumably to mitigate the effect of emissions-based taxation.
When asked about the biggest issues facing company fleets, many FDs cited the increasing burden of health and safety legislation. “Legislation is out of control,” says one FD. “All a business can do is keep paying higher insurance premiums and hope it doesn’t happen. Responsible compliance is impossible.”
“I’m unhappy about the increasing stress levels on our drivers caused by increasing traffic and resulting hold-ups,” says another.
Some FDs are considering abandoning company cars altogether to avoid compliance problems. “Rising insurance costs and red tape have become prohibitive. We are looking at a formula for selling off vehicles to employees.”
In this year’s survey, German cars continue to dominate as the personal car of choice, with 18% of FDs driving BMWs, 12% Audis, 10% Mercs and 8% Volkswagens. One FD surveyed, however, prefers more bang for his buck – he drives to and from work in a Maserati. ?:
View our archived webinar, including Oracle and a host of ‘Fast Data’ experts, to discover how financial professionals can help create a Fast Data business
Reinmoeller, professor of strategic management at Cranfield School of Management, has proposed an Eight Actions Model to help organisations increase margin and perform ahead of market expectations
When thinking about Iran as a potential market it’s important to go in with open eyes. This means being aware of some of the myths as well as being clear on the challenges
Third of UK companies with defined benefit pensions schemes are paying out more from their scheme in pensions than is being received in contributions