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Should SMEs Look at Company Car Schemes?

SMEs (small-medium enterprises) are the lifeblood of business and commerce in the UK. According to government data, SMEs comprise 99.9% of the nation’s total business population – equating to more than 5.5 million businesses, and more than 50% of the private sector’s turnover each year.

Owning or operating an SME may not make you part of a particularly exclusive club, but it does put you on the front of your market. Expansion is necessary but also difficult, owing to the relative saturation of the various markets in which SMEs continue to crop up. Constant and consistent re-investment is required to stay competitive, whether in your offerings to clients or to your own staff.

One common consideration for the growing business is whether or not to institute a company car scheme. There are a number of factors to consider both for and against – with the ‘against’ corner dominated by present economic circumstances. Below are some specific thoughts you should engage with in answering the question, “should my SME consider a company car scheme?”

Sector and Discipline

The major element of this decision relates to the fabric of your business. Some sectors will rely more heavily on private transport than others, and for different reasons. As a small-scale sales organization, you might need to travel around the country in order to meet potential clients and tangibly expand your network.

Likewise, as an engineering consultancy, your staff may need to conduct regular site visits and inspections as part of your service. A digital-based marketing agency, meanwhile, may have little use for physical transport when all assets and services are rendered in the cloud. These factors not only influence your initial decision, but also the kind of car you procure.


Cost is naturally a key consideration if your business has come to the conclusion that a company car scheme may be beneficial. New vehicles are costly to purchase and run, even if leased as part of a scheme with a local showroom. Cutting costs is a central theme in today’s market landscape, so cheaper methods of company car ownership should be explored. For executive staff, used Mercedes are often in excellent condition and highly reliable, making them a solid cost-effective option.

Leasing can be made to work for a business in certain scenarios, but typically hire-purchase agreements are the better bet. This is because the business is left with ownership of a physical asset it can then sell or expense, as opposed to paying for hiring privileges.

Benefits vs Risks

Ultimately, though, it is your responsibility to weigh the benefits against the risks. As a company with a large cohort of hybrid workers, company cars may not be as cost-effective a transport solution when a cycle-to-work scheme could suffice. However, offering company cars can a strong addition to the benefits policy of new roles, attracting new talent and reducing turnover.

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