Benefit-in-kind (BIK) tax is now more influential than car specification and fuel economy when choosing a company car.

It will put further pressure on manufacturers and dealers to ensure they offer a strong range of low CO2 emission, and consequently low BIK rates, cars to suit company car drivers, who account for half of the new car market.

In 2012, ALD’s survey of 1,000 company car drivers found car specification to be the most important factor (25%) in choosing their next vehicle, over fuel economy (22%) and BIK taxation (14%).

However, 2013 has seen a significant change in driver attitudes with BIK tax now being classed as the most influential factor (39%), followed by car specification (no change at 25%) and fuel economy (17%).

Commenting on the significant rise in BIK’s influence, Helen Fisk, AutoSolutions manager at ALD Automotive, highlighted the changes to BIK announced in the Budget (March 2013) as a turning point.

All low emission cars are now no longer exempt from company car tax and the maximum threshold has increased from 35% to 37%.

Also, the diesel supplement is to be removed from 2016 and, significantly, most drivers will see increased uplifts in BIK rates over the coming tax years.