Take The Sting Out Of
Company Car Costs

Efficient driving
Reduce unnecessary journeys
Maintain vehicles properly
Consider teleworking
Be aware of the new fuels
Plan for the tax changes

The cost of running company cars is therefore higher than ever. Yet steeply rising fuel prices are not keeping vehicles off the road. Almost 95% of travel is by some means of road-based transport. However, as few as 5% of drivers say they would switch to rail or other forms of transport even if the effect of congestion was to double journey times.

Clearly, company cars remain popular. So while this is the case, employers will want to look at ways to curb the rising cost of maintaining a fleet. Here are some pointers:

• Efficient driving Driving at a constant speed will improve fuel consumption, especially where this is between 5-10 m.p.h. below the speed limit. Keeping within the speed limits will eliminate the cost of speeding fines - and a lost license.
• Reduce unnecessary journeys Short trips use a comparatively large amount of fuel. Plan and schedule journeys carefully so that you avoid having to make the same trips twice. When visiting customers, organise your appointments so that you can see several people in the same area on the same day.
• Maintain vehicles properly Check cars regularly, including tuning, emissions and tyre pressures.
• Consider teleworking Could some staff be encouraged to work from home on a casual or regular basis?
• Be aware of the new fuels LPG (liquid petroleum gas) is increasingly popular and is considered a 'clean' fuel. It is available for use with conversion kits and costs less than half the price of petrol at 40p per litre. The government provides a subsidy of up to 75% of the conversion cost (typically costing about £1,400) and converting a new, high usage car would save money in the long term. However, there are only 300 forecourts in the UK that supply LPG.
  Compressed natural gas (CNG) and liquefied natural gas (LNG) are also gaining in popularity and will qualify for discounts in recognition of the air quality benefits.
• Plan for the tax changes From 6 April 2002, the government will base the tax charge on a percentage of the car's price graduated according to the level of the car's carbon dioxide (CO 2 ) emissions, increasing from 15% to 35%. Existing business mileage discounts and age-related discounts will be abolished.

For the longer term, the Inland Revenue is considering how the authorised mileage (FPCS) rates for drivers who use their own cars for business journeys might be improved.

We can assist you in working out the most tax-efficient and cost- effective company car strategy for your business. Contact us now for help in this highly important area.