Despite being cash strapped, SMEs are still paying cash for their company cars


Even though the economy is still looking gloomy, and weak growth expected to continue throughout 2013, most SMEs are opting for cars that are both fuel and cost efficient, yet they are wasting some of their valuable capital to make these purchases.

In the Business Car Manager SME Company Car of the Year awards for 2012, the top honours went to BMW and Mercedes, and the online motoring mag also discovered that most SME’s might not be using the most efficient of methods in order to buy their company cars.

With almost 1.5 million SMEs using cars for business use, accounting for 49% of all new business car registrations, 55% are using cash or loans to buy them, according to recent research by MAGMA Automotive.

At a time when small businesses are struggling with cashflow, tight margins and longer payment terms from suppliers, they may be using up valuable working capital to make expensive purchases.

Chairman of the judges, Phil Orford, the chief executive office of the Forum of Private Business, said:

“It could be a bumper year for company car sales this year, thanks to the Chancellor’s 10 fold increase to the Capital Allowance budget which came in to effect on 1 January. So there’s never been a better time for businesses to buy, and there’s certainly some great car to choose from as these awards show. However, it is vital they investigate the most appropriate way to purchase their car and not tie up essential finances that could be used to improve their business.”

Business Car Manager editor Ralph Morton added: “The new Mercedes hybrid was a clear winner in the judges’ voting. There’s the prestige of driving the three-pointed star but without the company car tax burden. At 12%, the E 300’s company car tax banding is better than the newly launched compact A-Class.

“As for BMW, the company has been consistently at the forefront of the SME company car market, thanks to the excellence of its cars allied to low benefit in kind company car tax, and its Business Partnership Programme offering tailored support to small businesses.”

Mercedes was named Best Overall Company Car for SMEs for its all-new Mercedes E 300 BlueTEC Hybrid G-Tronic Plus. BMW was named Champion SME manufacturer for winning most categories in the Business Car Manager SME Company Car of the Year Awards 2012.

The other key winners in the Business Car Manager SME Company Car of the Year Awards 2012 in association with MAGMA Automotive Services were:

Most Cost-Efficient Car for an SME to buy: Peugeot 208 5 Door 1.4 e-HDi Access+ 70 EGC Stop and Start

Most Cost-Efficient Car for an SME Company Car Driver: Audi A1 Sportback 1.6 TDI SE 105PS

Best Company Car for SME Directors: Mercedes E 300 BlueTEC Hybrid G-Tronic Plus

Best Company Car for SME Business Owners: Range Rover Evoque 2.2 SD4 Dynamic 190hp 4WD

Best Company Car for SME drivers: BMW 320d EfficientDynamics

Best Finance and Service Package for SMEs: Citroen

Best SME Company Car Programme: Vauxhall

Best Company Car for SMEs Readers’ Award: BMW 3 Series range

Full details of the SME Company Car of the Year Awards 2012 by Business Car Manager can be found at