LONDON--(BUSINESS WIRE)--According to SpendEdge procurement market intelligence experts, the first challenge every fleet manager faces is to reduce operation costs, and second is fuel price volatility. In their recent study on the best practices for managing company cars, procurement intelligent specialists unearth some of the key methods for effective company car management to increase productivity without compromising on resources.
Company cars market at a glance
For several years now, providing company cars to employees have been a significant non-cash benefit as it permits easy access to the workplace and provides personal mobility. The company cars market, although constantly confronted with the growing tax system for both employees and organizations, remains a lucrative market. As a result, car makers are increasing their investment in R&D and technological innovation to capitalize on their ROI. Region-wise, the UK is one of the top countries in providing company cars because half of the cars sold there are bought by companies for corporate use.
Nowadays, opting for public transport to work can be unreliable and often lead to employees reporting late to work, thus leading to loss of productivity time. However, when companies provide cars, the process of commuting to and from work becomes much convenient, efficient, and less time-consuming. This company car system works out extremely well for organizations that are located remotely as staff members waste no time traveling by public transport.
One of the biggest drawbacks of driving a company car is the heavy tax levied upon the total value of the car and its emissions; with lower CO2 emission comes bigger tax deductibility. Moreover, company cars are not a one-time investment as they need to be occasionally maintained, repaired, and serviced, due to frequent driving. Not just that, company cars must be replaced, and that becomes an added expense for the business.
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Some of the best practices that need to be followed by every fleet manager while providing company cars to employees as cited by SpendEdge supply market intelligence experts are:
- Car maintenance standards should be outlined that includes wear and tear guidelines
- Set CO2 emission limits or promote zero-emission to reduce on tax and fuel costs
- Establish a strong fleet policy to define eligibility
- Mandate a vehicle insurance segment mentioning the driver’s liability, should there be an accident
- The driver will have to report any change of circumstances like address change, health, or driving license endorsements
The role of procurement continues to grow in the decision-making process as there is increasing emphasis on cost saving opportunities. Procurement intelligence experts believe that while there are unforeseen expenses in providing company cars to employees, there are always measures to curb costs.
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