Many drivers are opting into company car schemes thanks to the fact they make work-related driving and commuting more convenient and affordable. But what do you need to know in order to pick the right company car for your work travel and lifestyle?
Whether you’re considering an electric vehicle (EV), hybrid, or petrol model, understanding how each option fits your driving habits and work requirements will help you make an informed decision. This guide explores the key differences between each powertrain, the costs involved, and the considerations that matter for both drivers and employers.
Which company car is right for you?
Before comparing different cars, it’s important to consider how you’ll use your company car on a day-to-day basis. Some key factors to think about include:
Electric company cars
Electric vehicles have become an increasingly popular company car choice thanks to improvements in battery technology, charging infrastructure, and government incentives.
Electric company cars are particularly well suited to drivers with predictable daily mileage and reliable access to charging.
Key benefits include:
Things to bear in mind:
Hybrid company cars
Hybrid vehicles bridge the gap between traditional petrol cars and fully electric vehicles.
There are two main types:
Plug-in hybrid vehicles (PHEVs): plug-in hybrids combine a petrol engine with a rechargeable battery. They can travel a limited number of miles solely on electric power before switching to the petrol engine.
Self-charging hybrids: self-charging hybrids recharge their batteries while driving and through regenerative braking, removing the need for external charging.
Hybrid vehicles are often suitable for:
- Individuals who cannot always access charging facilities
- Employees regularly travelling longer distances
- Drivers that want a tax-efficient way to drive thanks to their lower BiK rates
- Drivers wanting improved fuel efficiency without relying entirely on charging infrastructure
Things to bear in mind:
- Hybrids can have less storage due to having to house an electric battery and engine
- They can only travel short distances using the battery alone and still release tailpipe emissions
Petrol company cars
Petrol vehicles may suit drivers regularly travelling long distances or don’t have reliable access to chargers.
Benefits include:
Things to bear in mind:
Advantages and considerations for each vehicle type
| Vehicle type | Advantages | Considerations | Best For |
|---|---|---|---|
| Electric (EV) |
|
|
Drivers with predictable mileage and access to charging |
| Hybrid |
|
|
Mixed driving patterns and occasional long journeys |
| Petrol |
|
|
Drivers routinely travling long distances with limited access to chargers |
What running costs should you expect?
Although company car schemes reduce many driving-related costs, you should still consider:
Fuel vs electricity costs: electricity is often cheaper per mile than petrol, particularly when charging at home. However, costs can vary depending on charging methods and energy tariffs.
Maintenance and servicing: electric vehicles typically require less maintenance because they have fewer mechanical components than internal combustion engine vehicles.
Understanding BiK: BiK is paid on company car benefits provided for personal use. The amount payable depends largely on the vehicle’s emissions and list price. Because EVs have significantly lower BiK rates than many petrol alternatives, they can often be a highly cost-effective option for employees. Current UK company car tax rules continue to favour lower-emission vehicles, helping make EVs attractive for both drivers and employers.
T receives a company vehicle that can also be used privately. The tax payable is influenced by:
- The vehicle’s list price (P11D value)
- CO₂ emissions
- Your income tax band
How does your choice affect your employer?
Selecting the right company car doesn’t just affect you, it can influence an organisation’s wider financial and operational objectives.
Fleet emissions and sustainability targets: many organisations are working towards lower fleet emissions and broader sustainability commitments. Vehicle selection plays a key role in achieving those objectives.
Employee recruitment and retention: a competitive company car offering can help businesses attract and retain talent. Employees increasingly value access to modern, efficient and environmentally responsible vehicles.
Future fleet planning: as vehicle technology evolves and emissions legislation develops, businesses need fleet solutions that remain effective in the years ahead.
Final thoughts
Choosing the right company car is ultimately about balancing personal driving requirements with your work-related driving. While electric vehicles continue to grow in popularity thanks to lower running costs and favourable tax treatment, hybrids and petrol vehicles may still suit those who regularly travel long distances or don’t have access to a charger.
FAQs
For many drivers, yes. Electric company cars can offer lower running costs, favourable BiK tax treatment, and reduced environmental impact. The suitability depends on factors such as mileage, charging access, and personal driving requirements.
Benefit-in-Kind tax is charged when an employee receives a company vehicle for personal use. The amount payable depends on factors including the vehicle’s list price, emissions, and the driver’s income tax band.
Yes, many EV drivers charge their vehicles at home using a dedicated charging point, often making it one of the most convenient and cost-effective charging methods.
The answer depends on driving patterns, charging access, and employer policy. Modern EVs are increasingly suitable for high-mileage drivers, while hybrids may provide additional flexibility in some circumstances.
Consider your annual mileage, journey types, access to charging, running costs, tax implications, employer policies, and long-term vehicle suitability.
