Choosing a Make and Model of Company Car

(i) Position

One of the key factors in deciding which type of company car to provide is the position and importance of the employee.

There is no point in you paying for lower ranking employees to have large BMW’s or sports cars, but at the same time, you do not want to make important management feel unvalued with cheap compact vehicles.

The most sensible method of choosing a car is to make a list of suitable cars based on cost and other important features (or use a ready made list - many sellers and leasing companies have them), allowing the employee to pay extra if they wish to go for something larger or more expensive. Allow higher ranking employees (I.e.: Those with higher benefits) to have an extra amount to use, as well as possibly even a larger choice of vehicles.

(ii) Needs

It is always important to take into account an employee’s needs when offering a car or choice of cars. A single employee may not need a 7 seat estate car, and a married employee with 4 children will find no use in a small compact car.

If you are not sure, or wish not to ask these details, provide a range of options, allowing the employee to select the car suits them the most (providing of course it is within the allocated budget).

(iii) Cost

The deciding factor in any decision should be the cost to your business. Is the cost of Car A relevant to the earnings and importance of the employee, and are the benefits (e.g. Employees feeling valued, reduced rental charges, etc…) worth the cost?

If no, then the costs need to be reduced (i.e. Select cheaper cars); otherwise, providing a company car will not be of value to your business.

A large part of the cost of a car will be the tax charges, these can be reduced significantly by picking a more environmentally friendly (i.e. Efficient) car.

(iv) Image

A factor in choosing a company car should be whether the employee is seen as a representative by existing or potential customers. Sales and travelling service staff (for example) are seen as representatives of your business, and their company car therefore should reflect positively upon the business. Try looking at slightly more upmarket cars, those which although not hugely expensive, still look like ‘professional’ cars.

It is not worth spending excess amounts on the image of company cars, but a little extra could help add to the image your businesses projects when meeting customers and suppliers.


Article Index

1  Introduction - Choosing & Using Company Cars
2  Purcahse or Lease a Company Car - Part 2
3  Choosing a Company Car  - Part 3
4  Choosing a Company Car - Summary