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Company cars: The safe approach

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9th Mar 2006
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Richard Schooling, commercial director of car scheme provider Alphabet, compares different types of scheme from the perspective of duty of care.

The Government has made at-work driving the main lever in its campaign to reduce road deaths and injuries. Its 2003 guidelines on managing work-related road safety cast a wide net over employers and can be seen as a prelude to the impending new law on corporate killing.

The message is that all driving done on behalf of the business is the employer's responsibility. To protect themselves and their employees, employers must take steps to control the use of vehicles on business.

However, there is growing awareness that the main forms of vehicle provision used by employers are far from equal in health and safety terms. The question of control is paramount but there are critical differences between company cars, cash, car ownership schemes and daily rental or pool cars in terms of the level of control they give over roadworthiness and fitness for purpose.

It is vital for employers (and their scheme providers) to understand these specific strengths and weaknesses when setting car policy. For that reason, I hope the following analysis may prove helpful. It is taken from a recent survey and report, Cars, Cash, Care and Control, by Nottingham Business School and Alphabet, copies of which are available to HR Zone readers by calling Alphabet on T: 0870 50 50 100 or emailing [email protected].

The company car option
Company cars offer the highest level of control. The employer can directly control fitness for purpose, insurance cover and maximum mileage and age. Maintenance workshops report directly to the employer or to its fleet management company, helping the organisation to keep a closer eye on roadworthiness. In the UK, a well developed and innovative supply industry offers customers expertise on all aspects of fleet operations including safety.

Cars owned by employees but funded partially or wholly by the employer through a structured employee car ownership scheme (ECO)
Employee car ownership schemes provide employees with company car-style motoring without liability for Benefit in Kind tax. They do not suit every employer but where they do, they can deliver huge savings on overall fleet costs. The employer, through the scheme provider, is able to set parameters on the age and maximum mileage of the cars. The ECO scheme provider also usually manages the car's maintenance. Some schemes also include insurance cover for drivers.

Read the second part of the article.

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By webbrowan
22nd Mar 2016 06:22

There are many different perspectives that we can view this whole situation from when it comes to the topic of company cars. If an employee requires the car solely for work purposes but still has to fork out the costs of maintaining it regularly from his/her own pocket, then the situation would be deemed as a burden. On the other hand, if an employee does not need to settle even a single cent when it comes to the car finance portion, then we will definitely see it as a huge advantage for the employee.

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