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Why is Personal Contract Hire growing so fast with companies?

When drivers choose cash instead of a company car, employers end up handing over an amount of money every month with no control over how it is spent.

That money is clearly meant to be for the individual to fund a vehicle that enables them to continue to do their job, yet it often ends up being used for other things leaving the employee with a vehicle that’s old, poorly maintained or not fit for purpose.

That in turn creates a growing grey fleet problem, and also results in employees driving on company business in older, higher emission vehicles.

It’s for this reason why the Grosvenor Group is seeing such huge uptake by its corporate customers for its Personal Contract Hire offering, because at the time the cash allowance is provided the PCH solution replicates the benefits of a company vehicle, with low deposits, maintenance cover, road tax and breakdown cover.

Shaun Redhead, who heads up Grosvenor Personal Leasing explains.

“When drivers are offered really competitive and enticing PCH deals at the moment they receive that extra monthly allowance into their bank account, they will be more inclined to use it to fund a new car.

“This has advantages for grey fleet management and it encourages drivers to opt for new, low emission cars that not only improve the company’s overall green credentials but also create the right impression when travelling to meetings.

“It’s for this reason why the uptake of our PCH solution has been beyond our wildest expectations because a rising number of Grosvenor Leasing corporate customers now offer their drivers a Grosvenor PCH solution if they decide to take the cash alternative.

“It means the driver moves quite seamlessly from Grosvenor corporate contract hire to Grosvenor personal contract hire, with all support provided for both the corporate and personal schemes from our offices in Kettering.”

According to the BVRLA the true company car market has been reducing year on year since 2017 and the number of privately registered cars has been increasing at a faster rate than those owned by companies.

The average age of grey fleet and cash allowance cars is older than both lease cars and those funded through a salary sacrifice scheme, and the average fleet car is 29% cleaner than its cash allowance counterpart.

The total number of cars used for business use is circa 12.3 million, of which 10.5 million are grey fleet and 1.8 million company cars, with 32% of drivers being offered a cash allowance instead of a company car if they wish to take it.

“Historically businesses paid little attention to what a driver did after taking the cash option,” said Shaun, “but now more drivers are opting out of the company car scheme, fleet managers are proactively helping these cash drivers source a vehicle that is suitable for business use and we see personal contract hire in the corporate arena becoming very much part of a fleet manager’s remit.”

For information about setting up a personal contract hire scheme for your business, why not speak to Shaun Redhead on 01536 536 666

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Call us today on 01536 536 536

GET IN TOUCH
Call us today on 01536 536 536

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