Demand rising for company cars

14th December 2011

The new year could see businesses responsible for more car maintenance, with the Association of Car Fleet Operators (ACFO) forecasting an influx in demand for company cars.

ACFO believes that 2012 will see a "sea change" in attitudes towards company cars, due to revisions to benefit-in-kind taxation and the tough economic climate making personal driving much more expensive for individuals.

If such an increase does occur, businesses will find themselves needing to ensure these vehicles are kept up to scratch, replacing worn tyres and brake pads and booking MOT checks.

Company car benefit-in-kind tax thresholds are actually due to tighten in April, but a special ten per cent rate for low-emission vehicles is due to be abolished.

As a result of this, the AFCO also expects the choice of vehicles used by companies to change in the new financial year.

Group chairman Julie Jenner said: "Evidence suggests that with personal budgets being squeezed due to the global economic crisis, drivers are firmly focused on how much tax they are paying and their disposable income.

"Although almost every driver will see their company car tax bill rise from April 6, 2012, analysis reveals that it is significantly cheaper to pay tax on a company car than to run your own vehicle."

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