carrentals.co.uk
predicts further growth for the car hire market as more drivers turn their backs on
high-tax company car schemes and opt for a cash alternative to purchase a
private vehicle.The company says it is already seeing rising demand from UK drivers who are
doing the maths and choosing to hire a car that includes unlimited mileage
for long journeys, rather than incur the depreciation and mileage on their
own car.

Since April 2002 company car taxation has been based on a car’s CO2
emissions and list price when new.  For a small car emitting 165 grams per
kilometre CO2 in 2002/03 the tax rate started at 15% of the car’s price -
this lower threshold of C02 emissions is being reduced each year with the
rate for 2003/04 at 155g/km.  It then rises in 1% steps for every additional
5g/km over the lower threshold - reaching a maximum of 35% of the car’s
price.

As a result, employees who require a larger car for work and home activities
are finding it more cost effective to opt out of the company car scheme and
run their own vehicle.

The National Travel Survey 2002 from the Department of Transport supports
the reluctance of British drivers to pile miles onto privately owned
vehicles.  In 2002, prior to the impact of company car tax changes, the
average company owned car travelled nearly 20,000 miles.  This compares to
about 8,000 miles for privately owned cars. 

Doug Scott, managing director of carrentals.co.uk, said: “We are predicting
a steady increase in car hire bookings from customers who have opted out of
their company car scheme and bought their own car.  As a result, they are
far more conscious of the costs involved in terms of mileage and
depreciation for long journeys - for example touring the UK or driving the
car abroad.

“An increasingly attractive alternative is to hire a car, with unlimited
mileage and comprehensive insurance included, providing a more
cost-effective alternative to taking a privately owned car.”

The car hire market is also benefiting from the growth in low-cost flights,
according to carrentals.co.uk.  With more people travelling more often, the
demand for car hire from airports such as Bergamo in Italy, Hahn near
Frankfurt in Germany, and Charleroi near Brussels in Belgium, all served by
low-cost airlines, is increasing.

Scott added: “With the combination of low-cost flights and company car tax
implications British drivers are increasingly looking at the car hire market
to support their requirements.  We are benefiting from this, and with the
choice of vehicles and locations now higher than ever customers are finding
it cheaper and more convenient to choose a hire car over their own vehicle.”
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