When the COVID-19 crisis finally began to pass, organizations around the world expected that the worst of the economic and geopolitical volatility was behind us. However.
After the pandemic, organizations that offer company car benefits to eligible employees found themselves forced to manage ongoing supply chain disruptions, soaring vehicle prices and fluctuating fuel and electricity prices. And it doesn’t look like their headaches are going to fade — particularly considering the current war on tariffs.
The final impact of the current tariffs on vehicles and their maintenance is still unknown, but one thing is certain: Organizations must keep a close eye on these developments, as they can have a real impact on employers’ ability to maintain their workforce’s mobility. Spiraling costs, supply-chain disruptions and related service issues are a real threat.
While WTW’s 2025 Company Car Benefits Survey Report provides insights into the types of policy changes that companies foresee (Table 1), it still is too early to fully understand the extent of how the current geopolitical and economic climate will affect policies. And we all know that redesigning these programs takes time.
Organizations have always been keenly interested in vehicle makes and models, and they still are relevant today. Of course, vehicle price always has been a major factor in organizations’ selection of vehicles, too, but questions are bubbling up about delivery times and the cost and turnaround time of maintenance. Disruptions in the automotive industry’s supply chain will influence fleet selections. Understanding where a vehicle is manufactured is part of the equation as well as accessibility to spare parts, maintenance services and electric charging facilities (Table 2).
Concerns related to fleet management also are pushing organizations to consider whether providing a cash allowance instead of a company car is more efficient going forward. The switch to cash is challenging — but could increase flexibility, reduce administrative burden, reduce risks linked to ownership and direct/indirect costs.
Conversely, these concerns are somewhat transferred to employees to manage. Any changes to policy should take into consideration:
Increased regulations linked to sustainability and government initiatives to introduce alternatives to pollution-driving cars also are pushing organizations to develop more holistic options for commuting. This can increase flexibility for employees as well as reduce the organization’s CO2 footprint.
Beyond electric cars and car allowances (in lieu of a company car), organizations look at how public transportation, bicycles, mobility allowances and parking facilities can benefit their employees’ mobility overall as well as support sustainability objectives (Figure 1).
Most survey participants reported that aligning with market best practices and competitiveness is their main objective when reviewing their car policies. Updating car and commuting programs also requires a thorough review of the organization’s ambitions, goals and business needs at the global, regional and local levels.
In unpredictable times, it is even more important to have access to reliable market data sources to have a clear understanding of shifts in market practices. Remember: Market practices often are influenced by location-specific factors (e.g., regulations, available means of transportation, infrastructure, geography, climate, employee preferences).
Having access to sound market data and objective, external sounding boards will bring a level of certainty in an uncertain world. It also will help you design and deliver a policy that is relevant, sustainable, affordable — and appreciated by your workforce.
