United Kingdom

Aon Car Benefit, Transportation & Generation Survey 2018 Insights

Significance of company car policy

As the labour market tightens across Europe, companies are focusing on establishing a comprehensive remuneration package for their employees in order to retain talent. One of the key components of the package is the company car benefit.

Company car policies are changing

In recent years, heightened environmental concern and alternative transportation options have resulted in different demands and criteria for company car benefits. Companies are looking at the policies from a range of perspectives including eligibility, financing, budgeting and selection of company car.

Our Car Benefit survey provides a broad insight on these plans, with data collected from a total of 139 companies across four European countries – United Kingdom, France, Germany and Sweden. We asked for budgets per employee level, authorisations for brands and engines, use of different transportation benefits and financing models as well as how digitalisation is impacting these benefits. The survey report provides information on company car financing, fleets and alternative drive engines such as electric motors or hybrid. It also includes input on additional transportation benefits such as e-bikes, shuttle services, car sharing, app solutions and various transportation budgets.

Key findings from Aon's Car Benefits survey

United Kingdom

Eligibility for status car typically starts at middle management levels, whereas for a job requirement car, eligibility varies depending on the job. Car allowances are the most common way to offer car benefits in the UK.

Cost remains the focus for most companies when setting car selection criteria, however environmental considerations (CO2 emission/fuel consumption) are becoming increasingly important.

Many organisations are currently discussing and testing the use of alternative drive cars, mostly hybrid as well as electric cars.

Salary sacrifice cars are offered by a small sample of our participants as a financing option. These schemes are unlikely to become more popular as the tax benefit was reduced significantly for most cars in April 2018. Ultra Low Emission cars (ULEVs) remain tax effective through salary sacrifice schemes, and it may be that such schemes increase in popularity once these vehicles become a more significant part of the car market.

France

The main criteria for the entitlement to receive a company car are specific hierarchical level or career-related mobility needs. As in the UK, status cars are usually granted from middle management and up.

Full service leasing is the most popular type of leasing across all employee levels.

Most of the time, a pre-selected choice of vehicles is available, although this may not apply at more senior levels. The manufacturer/model for a service car is usually not determined by the employee but based on a selection of predetermined manufacturers/models.

An increasing number of companies are discussing and/or testing alternate energy vehicles, these being mainly hybrid or fully electric.

Germany

At the executive level, a ‘status’ car is an integral part of the overall compensation strategy. Usually sales representatives are eligible for a job requirement car.

Offering only a car allowance is not common in Germany.

Most company cars are financed by leasing. The most popular type of leasing across all employee levels is full-service leasing. Costs remains the priority for most companies when defining car selection criteria, followed by environmental considerations (CO2 emission/fuel consumption).

Employees eligible for a company car can most often choose a brand and model from a predefined vehicle catalogue, in combination with a defined budget.

Sweden

Entitlement for a status car typically starts at middle management levels.

As in Germany, a fully serviced lease arrangement is the most common method for provision of cars.

Most companies have a carbon dioxide emission limit where the lower personnel categories have a higher requirement to reduce carbon emissions by looking at the median and the highest value.

Only 50% of the participating companies offer a car allowance instead of company car.

Manufacturer/model for a service car is usually based on a selection of predetermined manufacturers/models or by contract.

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Aon Consulting Limited is authorised and regulated by the Financial Conduct Authority.

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