Is the Company Car a Thing of the Past?
By Space Coast Daily // September 16, 2020
Company-owned vehicles vs managed fleet
Is the Company Car a Thing of the Past?
Traditionally company cars were a popular incentive for employees, especially for people working in field positions. The trend for company cars in Europe sees a user-centric choice towards having a company car. However, in North America, many companies only give employees access to a company vehicle if it is deemed necessary for their job.
Due to the miles clocked up as the US is significantly larger and corporate travel can be more extensive, a study has suggested that the corporate fleet market has grown for the past eight years up to 2020, and around 20% of new light-vehicle registrations were attributed to corporates in 2016.
Company-owned vehicles vs managed fleet vehicles
Many companies previously owned their own fleet and company cars and managed everything in-house. However, as years have passed, many are looking at or moving to managed fleet strategies that include leasing and financing options.
The future of company cars
Technology and innovation are changing the way that corporate companies manage and use fleet vehicles. There is also a need to consider the cost implications for businesses, and many are moving to reduce operating costs.
There are also different types of lease available, including open-end leases and closed-end leases. Many companies prefer the open-end lease as this gives some flexibility on contract length and mileage. Plus, if the vehicle’s market value exceeds the residual value, there is a reward for companies, or the option to buy at the lower residual cost.
Buying a used company car
Used company cars and fleet vehicles can make brilliant cars for the average joe. While they might have a few miles on the clock, they are often serviced well and maintained for maximum efficiency. Check out some of the pros and cons of buying a used company car:
Pros
New models – Many company cars are recent models and are only used for a few years before another is brought in. This means you may have the opportunity to buy a model with the latest gadgets for a fraction of the price.
Well-maintained – Fleet and company vehicles are typically well cared for and are in good condition on sale.
Cheaper options – Choosing a used fleet vehicle is often less expensive than a car for sale privately. Plus, you can often find them alongside private sales by searching for certified preowned vehicles near me.
Cons
High mileage – Company cars are used frequently and sometimes by several people, so mileage is often high due to extensive traveling.
Increased wear and tear – Due to the number of miles company cars do, they will experience more wear and tear. However, this is often counterbalanced by good maintenance.
Low resale value – Although you may get a used company car cheaper than private sales, the resale value will also reflect this. You also may not be able to obtain finance for an ex-fleet vehicle.
While company cars may be reducing slightly in popularity, fleet vehicles are still a top choice for corporate that require functional cars for their employees.
