Calculating the cost of company cars.

Whether a business has a car fleet of 5, 500 or 5,000 vehicles, the costs of running a company car represent a significant investment of perhaps £5,000 - £8,000 per annum and beyond.

Despite this high level of investment, many businesses still base their car selection policy on upfront cost bands, such as a car's list price or perhaps the monthly lease rental.

Unfortunately, these upfront cost bands only represent part of the equation as the type of vehicle provided can have a significant impact for the business in relation to both direct and indirect tax as well as National Insurance (NIC) charges.

It is now widely accepted as best practice within the fleet industry for businesses to take a much more holistic look at company car costs, in particular taking into account the potentially high levels of tax and NIC charges arising.

This approach, commonly referred to as Whole Life Cost (WLC) modelling can enable a business to identify all of the various costs incurred in car selection and subsequently make choices which attract the lowest costs to the business whilst enhancing employee choice.

For further information please contact the Cobia team on 0845 226 0580 or email info@cobia-uk.com