As we start to make progress towards becoming a net zero economy, the Chancellor’s policy on company car tax is now starting to have a real impact on company fleets.
With the Tesla model 3 now outselling the BMW 3 series, causing the German manufacturers to jump on the electric bandwagon, we are now seeing a real sea change in the buying habits of fleet managers and company owners.
As a result of these changes we are now having conversations with clients on a weekly basis as they move away from car allowances and back into company cars. We are also seeing companies setting up employee contribution schemes to enable their staff to get into the electric car market.
This is a welcome change, and will no doubt have a significant impact on carbon emissions in the future – but what are the unintended consequences of this move for your company motor insurance?
There are a few things to consider in this area, particularly as most company drivers are opting for premium brand vehicles such as Tesla, BMW, Mercedes, or even Porsche.
While these vehicles come with attractive lease and finance deals the list prices are significantly higher than their petrol or diesel equivalent. As a result, most major insurers are likely to ask you to have a tracker installed in the vehicle. This is not fitted as standard and will require you to pay a fee either up front or on an annual basis.
Having test-driven some of these vehicles the performance of them is frankly scary and while some people will be experienced driving cars with such high performance, I would argue most of us aren’t. We are likely to see an increase in vehicle collisions as a result – at least until we get used to it or perhaps these cars all start to drive themselves!
We are seeing extremely rapid growth in the availability of electric vehicles – however, we are not seeing a corresponding increase in the number of repairers able to deal with them after a collision. Plus, we don’t know a lot about what happens to the batteries in these circumstances. For these reasons we are likely to see many more cars simply written off rather than being repaired.As a result, the insurance premiums charged on electric cars is significantly more than on other vehicles, and will come with much tighter driving restrictions around the age of drivers, and will probably also require a tracker requirement.
These are not reasons to stop you taking the company fleet electric, but certainly some food for thought before leaping in.
If you would like more information on this issue, please don’t hesitate to get in touch.
Sam Leeder ACII