KEY: BIK most important to 39%
Benefit in Kind (BIK) tax is now more influential than specification and fuel economy when choosing a company car, ALD Automotive research has revealed.
A sizeable 39% of respondents in the study classed BIK as the most influential factor, followed by car specification (25%) and fuel economy (17%).
This compares to 2012’s survey of 1,000 fleet drivers, where 25% opted for specification, 22% for fuel economy and 14% for BIK taxation.
Helen Fisk, AutoSolutions Manager at ALD Automotive, claimed the changes to BIK announced in March’s Budget as a turning point.
All low emission cars are now no longer exempt from company car tax and the maximum threshold has increased from 35% to 37%.
Also, the diesel supplement is to be removed from 2016 and, significantly, most drivers will see increased uplifts in BIK rates over the coming tax years.
“Following the Budget we’ve seen BIK propelled to the top of the list of drivers’ priorities as they look more carefully at their opportunities to minimise their exposure,” said Ms Fisk.
“It’s clear that drivers are planning for future rises by selecting vehicles with low enough emissions to last a typical three-year agreement period.
“Even as the economy improves, maximising take home pay remains a priority for many company car drivers.
“Interestingly, it seems fuel economy is becoming less of an issue for drivers.
“This could be because drivers have become immune to higher fuel prices and are, therefore, switching to fuel efficient models with a lower BIK rate.
“Company car drivers are typically the first-in-line to take action and react to changes in legislation, as well as adopting new models and technology from manufacturers, especially when it saves them and their company money.
“The results from our survey help us to carefully monitor changing driver demands and seeing how the influence of BIK has more than doubled in the last year only supports our advice to fleets that they must use a total cost of ownership programme to balance cost, flexibility and choice to identify the optimum fleet policy.”