Should your business consider company cars?
A company car is a key perk in any role and is generally offered to employees who cover a lot of distance per year due to their job. As a business owner, you may consider offering company cars to current staff as a benefit or offer them as a job perk to potential new candidates.
What is a company car?
Company cars are vehicles provided by an employer for private and business use and remain a popular employee benefit. Buying a used car for business makes a lot of sense, especially for small companies. Opting for used cars that are only one or two years old will ensure that you are offering your employees high-spec vehicles that also come with a warranty when bought from dealerships, making them safe and reliable.
Benefits
One of the main benefits of offering a company car scheme is the strong talent it is likely to attract. Nowadays, the perks that come with a job role are one of the top considerations for potential employees, after salary. As such, offering perks such as a company car is likely to widen the candidate pool and improve the quality of those applying for roles at your company.
Happiness is a key factor in productivity, so ensuring that your employees are satisfied with their job, pay and perks is a great way to ensure that business productivity is high. Offering perks such as a company car lets your employees know that they are valued and it can have a positive impact on both their work life and home life.
Drawbacks
The drawbacks of company car leasing may mainly affect the employee, leading them to avoid opting for a company car lease.
One of the top drawbacks may be the tax that comes with the perk of a company car. The amount of tax will depend on salary, the cost of the car and the amount of carbon dioxide that the car emits. As such, a high earner driving an expensive car with high carbon emissions could be looking at a costly tax bill. To combat this, your company could look to only offer electric vehicles to reduce carbon dioxide emissions, or only allow certain vehicles with low emissions as part of the scheme.
Of course, a drawback for many employees would be that they do not own the car which can be risky if they are let go or resign. With a lease agreement, there is no option to purchase the vehicle so the employee may end up without a car. If you want to avoid this as an employer, you could consider buying the cars to lease them to your employees with the option to buy the car outright from you.
Conclusion
Overall, you should assess what your business is looking for when it comes to offering company cars but, more often than not, they will be a benefit to you and your employees.
