Company cars are here to stay – despite pandemic concerns
The numbers have confirmed it. Despite concerns, the pandemic hasn’t impacted the future of the car, with key market indicators predicting growth for the company car market, and drivers feeling more reliant on their vehicles.
Research from the OC&C’s ‘Battery Late than Never’ report indicates that, despite people driving less during the coronavirus pandemic, cars are more important than ever.
Overall, 42% of drivers said the pandemic has increased their belief that their car is “essential”, while the number of non-drivers who expect to own a car at some point in the future has risen by 21%.
It’s good news for the automotive industry.
More consumers to source cars through employers?
The fleet sector might have experienced some downturn during the last year, but the outlook’s looking increasingly positive now. Data shows 6% of consumers expect to source their next car through their employer – which has tripled since 2019.
Recent statistics on benefit-in-kind (BIK) indicate a 30,000 year-on-year decline in employees receiving the benefit in the 2018/19 tax year.
But Government incentives for pure electric and hybrid vehicles have led experts to predict an increase in uptake amongst employees.
What’s the story in 2021?
Figures from the Society of Motor Manufacturers and Traders (SMMT) found that 80,000 new company cars were registered to fleet and business in April 2021, with the market showing positive signs of recovery.
In fact, fleet and business registrations account for 56% of the car registrations market, with 567,108 vehicles registered in the last year.
If we contrast last year’s Jan - April figures with this year, there’s been a 23% uplift in new cars registered. More good news.
What about electric vehicles?
Demand for electric vehicles (EV) has never been higher, with adoption accelerating at an unprecedented pace.
Worldwide figures show that 50% of drivers considered a hybrid when they last changed their car, while 40% say they’ll consider a pure EV when they next change vehicle.
The UK also leads the western world in EV confidence, with 57% of UK drivers considering going fully electric for their next car, compared with just 45% in the US.
Previous barriers to adoption such as technology, availability and proximity of charge points have been improved, leading to increasing uptake too. When asked why, 38% said improvements in tech were a significant factor, 39% mooted 39% and 36% mentioned changes in Government regulations.
Availability issues have also improved, with SMMT figures showing that vehicles capable of zero emissions now make up a third of the available models in the UK.
Combustion vehicle ban contributing to more company cars
With the ban on selling new combustion vehicles set for 2030, the switch to EVs is only going to become more popular.
Lower taxation levels will be a factor and demand will continue to increase the closer we get to the ban, and the likelihood is that we’ll see more and more employees driving company cars.
How many of your drivers will make the electric switch for their next vehicle?
