Answer to Question #230012 in Macroeconomics for Mfezi

Question

What are the four advantages that the car company have

Answer 1

Following are the four advantages that the car company have:

• No financial ties for employee:  The employee is not directly bound by a financial contract because the car is leased through the company. It is the company's responsibility to ensure that all monthly payments, as well as any maintenance, service, or MOT duties, are met on schedule.
• No unexpected costs: Insurance, service, and/or maintenance are frequently covered by the employer. Furthermore, some employers may offer a company automobile fuel benefit, which is less expensive than filling up your own tank because your employer will fill it for you and charge you a flat fee similar to the BIK tax.
• Low Benefit-in-Kind (BIK) rates: Benefit-in-Kind (BIK) tax rates are typically a modest fraction of the final cost of the vehicle. The overall tax you pay is determined on the CO2 emissions, fuel type, and income tax rate of the car. Rates are even reduced if you drive an electric or hybrid vehicle. The BIK rates for zero-emission vehicles are 2%, compared to 15% to 37% for petrol and diesel vehicles.
• Recruitment incentive: If you're a business owner, a company vehicle programme is a terrific way to recruit and keep employees. A business automobile is a great way to show your staff how much you value their efforts and to set an example for new hires.