Report predicts return of company cars

A new report confirms that more businesses are returning to company cars and away from cash alternatives.

According to a report into UK fleet services by market research specialists Market & Business Development, the introduction of the Corporate Manslaughter Act earlier this month is driving firms away from cash schemes.

It attributes this to concerns over the lack of control that management has over private cars used on business.

Companies will be able to maintain greater control of maintenance and, as such, avoid being held responsible for employee deaths and being made subject to unlimited fines, according to the report.

It goes on to say that in previous years the trend by companies offering employees cash-for-car options rather than providing company cars has exerted a downward pressure on demand for fleet services.

However, this situation is changing and the fleet services market is now projected to grow year-on-year.

In fact, over the forecast period it is expected to peak at around £12.96 billion, at 2007 prices, which equates to an overall real-term increase of nine per cent compared with 2007.

The report also suggests that the trend towards outsourcing fleet services will continue as firms continue to focus on core activities.