Car insurance – Tips & Advice – Green driving
We've all seen the harassed businessmen trapped in their cars in traffic jams or gulping down a coffee in a service station on their way to their next meeting somewhere in Milton Keynes. And the fact that so many working people spend their days travelling from one location to the next in a company car is having a negative impact on the environment
In its 2008 report, Behind The Wheel II, the Energy Saving Trust (EST) takes a close look at the impact of company cars on the environment and the financial cost to businesses. It reports that:
- 56% of all new vehicles are registered to organisations
- Company cars account for around 11% of passenger cars but 25% of car CO² emissions
- British businesses could save a staggering £2.6 billion by switching to greener fleets
Cut emissions, cut costs…
When you consider the rules on vehicle road tax it's not surprising that industry could save so much money by going green. Currently there are seven categories for road tax which are based on CO² emissions. Put simply, cars with emissions of less than 100g/km pay zero car tax per year with cars between 101-120g/km paying £35. Cars over 225g/km (registered after 23/3/06) pay a whopping £400 a year. This is due to change in 2010 with the introduction of thirteen bands, with the highest emitters paying £900 for the first year and £455 for subsequent years.
By reducing the CO² emissions of the car, a tax saving can be had immediately. And running smaller, lower-emitting cars will generally have an added benefit – fuel consumption will be lower as these cars tend to offer more miles to the gallon. Indeed, the EST claims that if UK businesses changed their fleets to 120g/km or less of CO² emissions, they would save £660 million a year from reduced fuel consumption alone.
Individual burden
In 2002, the tax regime for company cars changed so that individual drivers began to pay tax based on a combination of the value of the vehicle and its CO² emissions – the actual calculation being rather complicated. According to the EST report, changes brought about in April 2008 mean that drivers opting for a car with 120g/km or less will see their tax burden halving. Similarly, employers' class 1A National Insurance will also halve.
Making the change
There is an increased pressure on companies to be seen to be green – but it can take a long time to move a big ship and many companies have been slow to act on company car issues. According to the EST, most companies that provide cars don't even have a written policy (only 39% of those surveyed).
If you are an employer or, indeed, an employee who uses a company car, making changes seems to not only make financial sense, but economic sense as well. Check out the Energy Saving Trust website for their recommendations.
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