The methods employers use to finance company cars have changed significantly over the past five years according to a survey.
Research by the Monks Partnership reveals that contract hire or contract purchase is now the preferred method of acquisition, with 42 per cent of firms choosing this option, compared to 34 per cent in 1996.
It also shows that the proportion of companies buying cars outright has reduced from 37 per cent in 1996 to a current level of 27 per cent and the number of employers offering a cash alternative to a company car has increased to 74 per cent from 70 per cent last year.
David Atkins, the report’s author, commented, “This year’s results confirm our consulting experience that many companies are reviewing their car polices prior to the change in the taxation of company cars in April 2002.
“In particular the level of cash alternatives to the car have been reviewed and several companies have introduced a personal leasing option to provide drivers with greater choice so that they may select the best – and most tax efficient – method of payment.”