Executives embrace green company car revolution

For years, they have been the ultimate corporate status symbol and a reminder of the relatively lowly place green issues occupy on the list of business priorities. But according to new figures, even the hallowed company car is now enjoying a green makeover.

New data released today by the UK's largest company car provider, Lex Autolease, reveals a significant shift in company car leasing habits in favour of greener and more fuel-efficient models over the past year.

The company said that average emissions across its fleet of 350,000 vehicles fell from 158g/km in 2008 to under 152g/km this year.

In addition, the firm has now supplied over 30,000 vehicles to companies across the UK with emissions of 120g/km or less.

Steve Osborne, head of fleet management at Lex Autolease, said that the growing interest in smaller company cars was being driven by a desire to cut carbon emissions and fuel costs, as well as the introduction of lower taxes on the most fuel-efficient vehicles.

Under new tax rules introduced in April, any company car with emissions of under 161g/km is subject to higher allowances against corporation tax, while the government's banding of company-car taxes mean vehicles that emit less than 120g/km of CO2 are subject to the lowest 10 per cent tax rate.

"Each of those company car drivers [with cars emitting less than 120g/km] is paying the lowest rate of benefit-in-kind tax and really getting the most out of their employment package," said Osborne. "In turn, the company could also be making thousands of pounds in post-tax savings."

He added that firms were likely to face increasing pressure to switch to low-emitting vehicles as the government works towards achieving the EU target of limiting average emissions to 95g/km by 2020.

There are a number of steps businesses can take to encourage staff to opt for greener company cars, Osborne said. "First, they should refine their choice lists to bring on board more fuel-efficient and low-emitting vehicles," he said.

"Next, identify ways for drivers to cover fewer miles and, finally, work out how to buy fuel smarter on a consistent basis. Together, these improvements can significantly reduce costs to the bottom line and help companies improve their overall profitability."