The company car is making a comeback in the UK
as businesses reduce the number of “cash for car” payments to
employees, a new survey suggests.

The proportion of businesses offering staff
cash rather than a company car — has decreased from 36 percent to
25 percent in the past two years, according to the survey of 300
managers who make decisions about company cars.

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Gary Killeen, fleet services commercial
director for GE Capital UK, which carried
out the research, said company car fleets were becoming more common
because
grey fleets (employees using their own car for business use)
could sometime be more expensive than a car fleet, and can be a
hassle to manage.

“In the early part of the 2000s, there was a
significant move towards cash for car policies but they are now in
quite a marked decline,” Kileen said. “However [many employers] found that providing the cash option was often more expensive than
normal company car provision.”

The grey fleet in the UK – estimated to range
from one to three million drivers – has potential legal risks for
companies.

This is because employers who pay staff extra
for the cost of buying, running and insuring their own cars for
business use have a ‘duty of care’ to employees.

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Employers could face legal action, or even
criminal prosecution, if an employee using their own private car is
involved in an accident and the vehicle has not been properly
maintained; or if the driver does not have an up-to-date driving
licence.

In the public sector, nearly 57% of
work-related mileage is made by employees in privately-owned
vehicles, according to the UK’s Office of Government Commerce.