A Viable and Sustainable Car Benefit Provision for West Way Employees
The CBS Optimiser’s financial results proved an ECOS solution was best suited to West Way’s criteria.Tags: Automotive ECOS
West Way is Nissan’s largest dealer group in the UK, with 14 sites nationwide and more than 600 employees. Jon Roberts was appointed Managing Director in 2020 after being part of the Nissan group – in various roles – for over 18 years.
Although Car Benefit Solutions (CBS) and West Way had worked together previously, it was the new appointment of Jon to MD, as well as other new personnel that spurred on the review of the employee car benefit scheme.
With 500 employees in the business and 200 of them eligible for a company car, West Way wanted a cost-effective solution for the business that also kept their employees happy.
Having a large workforce eligible for company cars meant that West Way not only needed a solution that would make them savings, in comparison to their existing employee car provision and write-down costs, but also required external management to ensure the scheme would run smoothly.
With the current set-up largely based around a traditional company car fleet, West Way was keen to implement a new off-balance sheet solution that was straightforward and could be rolled out efficiently.
Financial Controller, Neil Hassell approached CBS with some ideas about how to create the best car scheme for the West Way employees, but was also keen to understand more about the how other groups managed their schemes. CBS Regional Manager, Chris Treacy suggested using the CBS Optimiser to determine the best solution.
After conducting analysis on a handful of cars across West Way’s existing range to gather some initial findings. The CBS Optimiser’s financial results proved an ECOS solution was best suited to West Way’s criteria. The CBS Optimiser calculated significant savings per year if all recommendations were implemented. This difference in costs were a combination of savings against Class 1A National Insurance Contributions (NICs), along with write-down savings on excess demonstrators plus potential margin on CBS vehicles.
The CBS Optimiser also analysed the running costs of a CBS scheme versus the traditional company car scheme West Way were operating. The conclusion was that a CBS employee car benefit scheme would be 96% lower in cost to the business when compared to the Class 1A NICs paid for each company car.
After a few stages of scheme evolution, the first group of pilot drivers were put onto the West Way Employee Car Ownership Scheme in March this year. Chris delivered a webinar to outline the scheme details, changes planned and what the drivers could expect.
From the initial pilot group, a further scheme consideration was raised regarding drivers that required higher mileage than the scheme allowed. CBS reviewed and created two bespoke options to satisfy the additional requirements for West Way, ensuring the schemes were eligible for all drivers’ needs. To date, 126 employees have already joined the scheme with more orders in the pipeline.
With the decision to remove company cars for the majority of drivers, West Way have now made the CBS scheme available for all of the employees who were previously eligible for a traditional company car. The scheme parameters and performance are continuously reviewed by both parties to ensure they meet the business needs and optimise the savings potential. The scheme has become even more attractive to West Way, thanks to a realignment from Nissan Motor (GB) Limited, which means vehicles on a CBS scheme count towards target, volume related bonus (VRB) and have enhanced handling fees. Currently, the group is exploring how the scheme can be utilised elsewhere within the business.
Andy Buswell, Group HR Manager, who was responsible for implementing the scheme, said: “As well as removing the benefit-in-kind costs associated with a company car, the CBS solution has removed a huge burden of the P11D reporting process from our administration team. On top of helping to set up the scheme, our Regional Manager, Chris and Field Operations Manager, Craig have been able to advise us every step of the way with the rollout of the scheme; providing a wide range of resources including employee packs, marketing pieces and hosting online webinars all tailored to our needs.
“The solution has provided a viable option for our employees to replace their company cars that’s also sustainable for our business, and I look forward to seeing how we can continue to evolve the scheme even further in the future.”