19/08/03

Sainsbury’s Bank launches new freephone service to help people understand the financial implications of choosing between company cars or cash alternatives

Sainsbury’s Bank, which offers a car purchasing scheme, ‘Drive’, reports a dramatic increase in the number of people opting out of company car schemes in favour of cash alternatives to purchase their own vehicles.  In response to these findings, the bank has announced a new freephone service (0800 096 0526) to help people understand the financial implications of keeping their company cars or opting for cash alternatives. 

The bank confirms that over the past six months, 40% of its Drive sales were from people who have opted out of their company car schemes and taken cash alternatives.  This compares with only 5% before changes to tax were made last year, which saw the old mileage discounts replaced with a new system based on a percentage of a car’s list price and its level of carbon dioxide emissions.

Sainsbury’s Bank believes that there are two main reasons for this change:
1. The rise of the cash alternative:
Cash alternatives are becoming more common.  A year after the new company car tax rules, there has been a 20 fold increase in the number of employers offering drivers a cash alternative to their company cars.  50% of businesses anticipate a further rise in cash for car arrangements.

2. A desire to drive petrol related cars:
More than 60% of businesses expect to switch their company car schemes to diesel powered vehicles in the future.  A number of motorists prefer to drive petrol engine cars and therefore opt out of their company car schemes taking cash alternatives instead to purchase their own, usually petrol based vehicles.

Steven Baillie, Product Manager, Drive car purchase, Sainsbury’s Bank said: “It can be difficult to work out whether to have a company car or choose a cash option.  We hope that our freephone service will help people decide what’s best for them.

“We recently cut our Drive rates and they are now the lowest they have ever been.  In fact you can drive away a new car from as little as £99 a month.”

The new APR is a reduction of up to 2% on its previous rates. With a new, flat APR of 7.9% across all makes and models, Drive is now an even more competitive alternative of financing a new car and indeed beats most loan rates currently on offer.

Provided by Sainsburys Bank