Feature – Focus on cars: Employee choice of cars

Peter White discovers limitations of company car choice range from business image stipulations to load-bearing capability

If you read nothing else, read this …

  • Many employers do not allow drivers in employee car ownership plans (Ecops) to choose sports cars or utility vehicles, and many require staff to select cars with four seats.
  • The decision on what cars staff can drive is based on a combination of business policy and cost.
  • Working Ecop drivers must be able to carry tools of the trade in their cars, which may well influence something like boot capacity.

Article in full

Asking a company car driver to choose what model vehicle they want is like giving a child two bars of chocolate and telling them they can only have one – and then asking them to part with their pocket money for it.

Drivers who receive a car through a structured employee car ownership plan (Ecop) – where the vehicle is legally owned by the employee but treated as a company car – often have to work under a different set of rule choices to traditional company car scheme members.

Some organisations will allow workers to have any car they wish, from a daisy-painted 1972 VW camper van to a brand new Lamborghini, while others will restrict the choice to one model with a selection of two colours. The majority of employers will ban staff from choosing soft top sports cars and 4×4 sports utility vehicles, while many employees must also have a car that has four seats.

Harvey Perkins, director at KPMG, says that some employers are more bothered than others: “There are all sorts of reasons why a business imposes controls on their fleets but a legitimate one is that they don’t want their clients to think that they have too much money.” One company had to ban a recent influx of Mercedes E-Class cars after staff found out that they had the same rental cost as a Ford Mondeo, because the firm felt it made it look too flashy.

Most organisations don’t want their sales staff burning rubber in a brand new two-seater when they turn up at an important client’s office. But some reasons aren’t as logical or as business focused as this. For patriotic reasons towards UK manufacturers, there are still organisations that do not allow staff to have a foreign car.

There are a number of car models that are more popular in Ecops than they are on the high street. Research by Ecop provider Provecta Car Plan highlights that while Renault has a 7.4% national market share in the UK, in its Ecop fleet it has a 10.9% share and Honda, which has a 3.5% market share, is driven by 5.2% of Ecop drivers. Nick Phillips, sales and marketing director at Provecta Car Plan, says that this is because they are competitively priced and suit many lifestyles.

Another common requirement is that employees must be able to carry the tools of their trade in their cars. GlaxoSmithKline (GSK) offers most of its 5,000 drivers, who participate in an Ecop, a free choice of car. But employees that work in its nutritional division, must make sure that their cars can fit dozens of cartons of Lucozade.

Harsha Modha, benefits programmes manager at GSK, says: “[Some] people were buying sports cars with hardly any boot and then they were having to hire cars at an additional cost to the company. So the nutritional business said for these people who [must] be on the road selling Ribena and Lucozade, we need to stipulate boot capacity.”

This also highlights the difference between a perk and a working company car. While many organisations use Ecops to fully replace traditional company cars, others use them for certain grades and perk drivers are often afforded more choice.

But staff are more understanding if they spend their working day in their car. “On paper it is your car, but people in these schemes understand that their employer is within their right to determine [the] kind of car,” says Perkins. GSK’s Modha agrees: “Obviously it has to satisfy the job they are doing, but otherwise it [doesn’t] matter.”