Through affinity schemes, employers can use their bulk purchasing power to negotiate discounts from manufacturers or through leasing companies, says Vicki Taylor
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Affinity car schemes allow employees to purchase discounted cars through their organisation or a leasing company.
Deals come at little cost to bosses but use of cars for work should comply with fleet policy.
Employers or scheme providers should regularly check that employees can't easily source a better deal elsewhere.
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Being offered a discount on big-ticket items such as a car may not come top of the list of reasons why employees choose to join an organisation, but any deals employers can cut to make their employees' hard-earned cash stretch a little further can't be a bad thing.
Affinity car schemes, where employers strike a deal directly with a manufacturer or through a leasing company, provide employees with access to cheaper prices on the purchase of new and used cars.
According to Matthew Saunders, autochoice consultant at ALD Automotive, one of the downsides of employers negotiating deals directly with a manufacturer is that they might not be able to secure as wide a choice as a leasing company. "[An employer] might be able to get a solo or dual-badge agreement. The discounts would be offered on the proviso it was only that brand that was advertised. If you go through a leasing company [it] can provide all types of makes and models," he says.
Neil Munro, head of product development at LeasePlan, adds: "We deal with every single manufacturer you can think of. Because we [do business] with so many we have access to limited-edition deals."
Such deals, for example, might come up when manufacturers are trying to meet year-end or quarterly targets. "[The discount offered] could be anything from 2% up to ridiculous amounts like 25% where there is [a particular model] they are trying to get rid of," Munro explains.
With employees typically covering the cost of the car, employers pay out nothing for the arrangement. The only costs involved are around marketing the scheme to staff, which, if a provider is used will also often be offered free of charge. Instead of charging employers, leasing companies make their money from interest rates payable by employees.
Barclays has offered an affinity scheme to its staff since early 2005. Rupert Hudspith, head of reward programmes, says: "While I suppose everyone realises that a scheme like this isn't going to be the first attraction for someone in joining Barclays, as part of our wider benefits offering we are always committed to things that can give [our staff] an advantage and help their money go a bit further."
Barclays uses its buying power to negotiate discounts directly with manufacturers such as Mercedes, Toyota and Renault. To date, employees have purchased 250 cars.
But the bank is careful to ensure that the deals it offers remain competitive. "You always have to make sure you are not undermining the value of any benefit by ensuring you are genuinely giving your employees something valuable to them or that they couldn't get easily elsewhere," he adds.
Employers should also ensure that where they offer company car drivers a car of a certain value as part of their core benefits package, they do not then offer the same car at a lower cost to other employees through an affinity car scheme, therefore undermining the value of their original offering.
Get the design right, however, and such a scheme can have advantages when looking to recruit and retain staff. "For employers, it is a another way of showing their employees that there are a lot of benefits of working for their organisation," Munro concludes.
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