10 March 2016

Activa contracts focuses on company car provision at benefits roadshows

Activa Contracts is promoting the advantages of employees driving a company car at a series of benefits roadshows being held by one of its largest customers.

The roadshows will be held during April and are a customer-focused development of Activa Contracts’ on-going ‘Electric Getaway’ roadshows. These were launched to highlight to our customers’ company car drivers the tax-efficient benefits of ultra-low emission vehicles.

Activa Contracts has been a supplier to the company for 13 years, but last year won a sole supply agreement across the organisation’s 400-strong company car fleet. The business also has a further 280 employees who have opted out of the company car scheme in favour of a cash allowance.

Activa Contracts won the solus contract after putting together a whole life cost-based proposal that enables employees to have a wide choice of vehicles across numerous motor manufacturers.

The company previously operated a manufacturer sole supply arrangement, but engaged consultants to undertake a root and branch review of its company car policy.

Activa Contracts delivered the most attractive company car policy from potential suppliers. It enables employees to choose from around 5,000 models spread across a host of job grades with even entry-level entitlement giving access to a wide range of aspirational vehicles.

Almost 700 out of 950 employees at the company are entitled to a company car or a cash allowance and it is hoped that the attractiveness of the new-look scheme will drive some cash allowance drivers back into a company car – and already that trend is starting to gather momentum.

So far almost 10% of cash allowance drivers have opted back into the company car scheme, which has been designed to make it as attractive as possible both to employees and new recruits.

The new scheme also comes with the ability for employees to trade up or down out of their grade and the company car choice list is subject to a CO2 emissions cap currently set at 130g/km, enabling the client to reduce average CO2 emissions across its fleet.

The outsourced contract hire with maintenance agreement also sees Activa Contracts provide a range of other added value services including fleet management, accident management, short-term rental and risk management solutions, including driver licence checking.

Activa Contract managing director Ian Hill said: ‘A company car offers many benefits, not least that it is totally hassle free in terms of vehicle maintenance and support available.

‘Basing company car choice lists around whole life costs invariably widens vehicle choice and opens the door to many aspirational cars which, may have a relatively high list price but are very cost effective in terms of their total cost of ownership. As a result, employees may be able to choose a more attractive car than perhaps they thought they were entitled to.

‘As motor manufacturers continue to focus on introducing low emissions cars to their ranges and simultaneously expand their model line-ups, employees can easily find an attractive car to match both their work and lifestyle requirements while keeping benefit-in-kind tax bills in check.’

He continued: ‘Employees driving their own cars on business trips continue to prove to be an administrative and compliance burden for many employers. We believe a company car remains exceptional value for money for both employers and employees and limits organisations’ risk exposure.

‘Basing a company car scheme on whole life costs enables companies to deliver a very attractive scheme to employees, which can prove to be a major employee recruitment and retention tool in a competitive labour market.’

Activa Contracts uses a calculator developed by professional services firm Deloitte to highlight to individual employees the true ‘net’ value of a company car versus that of a cash allowance.

Mr Hill added: ‘During the roadshows and subsequently we will go into detail with employees and show the net cost to them of choosing a company car or taking a cash allowance. It is virtually always the case that employees are better off choosing a company car.

‘We hope that other clients will take up our offer to take part in benefits roadshows to highlight just how attractive company cars can be as part of a remuneration package.’

Meanwhile, the objective of the ‘Electric Getaway’ roadshows is two-fold:

  • To enable existing company car drivers to view the very latest ultra-low emission cars, understand issues such as vehicle range and charging requirements associated with plug-in cars as well as the tax implications versus their current vehicle.
  • To highlight to employees who have opted to take a cash allowance in lieu of a company car that their current choice is almost certainly poor value versus the greater tax efficiency of the latter.