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Company car and allowance schemes grow in popularity as benefit, says Towers Watson

Cars remain in the driving seat as a company benefit for UK and EMEA businesses, shows a report from professional services firm Towers Watson.

The popularity of company car and car cash allowance schemes continue to grow. Almost 80% of managerial staff remain eligible for car benefits, but companies are far more likely to offer employees the choice between cash and a car, or only offer a cash allowance, than they are to offer only the option of a car, according to The Company Car Benefits Survey 2012.

Darryl Davis, senior consultant in Tower Watson's service division said: "Company car and allowance schemes are still proving very popular across Europe as a sizable part of many people's employee benefit packages.

"In the UK, the option of a car or cash allowance remains the most common policy across almost all categories of eligible employees," he added

A different scheme that is proving extremely popular is the salary sacrifice for car scheme (SS4C). Mike Gunnell, director of MGMedia services, and representative of Tusker, a SS4C company told HR Magazine: "The main reason people are turning to these schemes is the rising cost in motoring. With SS4C, the only additional cost is fuel.

"These days everyone is looking for a more cost-effective way of acquiring a car and this is one way of doing this."

Half of the companies included in the Car Benefits Survey 2012 indicated that one of the changes they had made to their company car scheme was to introduce more tax-efficient, environmentally friendly cars.

Darryl Davis, senior consultant in Towers Watson's Data Service division said: "The growth in green car options has been driven by the increased tax burden that many countries have placed on higher carbon dioxide (Co2) emitting vehicles."

He added: "It's becoming more expensive in many countries to own heavily polluting vehicles, whereas environmentally efficient vehicles can be subsided with tax breaks. We anticipate that this will become a distinct trend in company car schemes over the coming years."

The Towers Watson Company Car Benefit Report surveyed 2,500 companies across 40 countries in EMEA on their car policies.