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THE difficulties endured by many small businesses are beginning to lift, it seems, as 26% of small and medium sized enterprises (SMEs) say they are in the market for a new company car.

The research, undertaken by the b2group, a business-to-business lead generation specialist, found that over a quarter of SME businesses were considering purchasing or looking for a new supplier of company cars over the next six months.

The findings were conducted with SMEs, comprising 77% with under 50 employees and 23% with 50 plus employees.

“The fact that 26% of SMEs are willing to spend their precious budget on company cars demonstrates that a sizable proportion of smaller UK businesses are feeling confident in the current economic climate,” commented Jeremy Whitaker, ceo b2group.

Typical of this new mood of economic optimism is Insurance IT solutions provider CDL (Cheshire Datasystems Limited), which has just taken delivery of 38 Mazda 6 2.2 5dr TS 129ps diesel models.

Gary Johnson, who is the head of customer services at CDL, said that the reason the company chose the car was its low CO2 emissions and good running costs.

“The Mazda6 met all of our company car requirements. It’s a five-door car and offers strong wholelife costs is a stylish vehicle and has a solid reputation for safety with a five-star European New Car Assessment Programme crash test rating,” Mr Johnson added.

The b2group’s findings support CDL’s company car buying requirements.

The top two company car considerations for SMEs were low maintenance costs and fuel economy, followed by low CO2 emissions to minimise company car tax and high residual values.

Mr Whitaker explained: “SMEs put great emphasis on buying vehicles which have low maintenance costs and are fuel efficient, which probably doesn’t come as a great surprise to many. They have smaller budgets than the large corporates with their big fleet budgets and therefore must always keep a close eye on their spend and make it work as hard as possible with the cars they buy or lease.”

Mazda’s fleet and remarketing director, Peter Allibon also added: “Fleet business is rebounding as the economy recovers from recession. While a number of fleets extended fleet replacement cycles into a fourth year as the economy slowed, they realise that extending further into a fifth year is often not viable as residual values reduce while the service, maintenance and repair costs rise.”

SME reasons for buying company cars

    • Low maintenance costs 63%
    • Fuel economy 61%
    • Low CO2 emissions to minimise company car tax (P11D benefit in kind) 33%
    • High residual value 31%
    • Three-year company car replacement cycle 49%
    • Four-year company car replacement cycle 8%
    • Two-year company car replacement cycle 8%
    • Research carried out under b2group’s SME Voice brand

 

Further information

For additional comment on SMEs, company cars, and an interview with Mazda’s Peter Allibon, read the Editor’s Blog Mazda’s small business fleet programme begins to take off.

Over a quarter of small firms need new business cars

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Ralph Morton is an award-winning journalist and editor of Business Motoring, as well as Editorial DIrector of Business Car Manager Ltd. Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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