Best company cars
There are so many attractive choices these days that picking the best company car can be quite a challenge. We look at the best of today's most popular models
Half of all new cars registered in the UK are purchased for company car fleets but what should you look for when it comes to buying one? When choosing a company car, you'll want to keep a close eye on costs, with a car's Benefit-in-Kind (BiK) liability a deciding factor.
For decades the diesel engine was the default choice of the company-car driver. Now, however, a diesel model that doesn’t comply to RDE2 standards incurs a 4% BiK surcharge (up to 37%) over petrol models with the same emissions figure. This means you need to consider if you will drive enough miles to justify the amount you’d save in fuel over the higher BiK cost and related income tax.
With diesel power gradually falling out of favour, what are the cheap alternatives? In recent years, petrol, hybrid,plug-in hybrid, and electric cars have all become increasingly popular with company-car drivers thanks to more beneficial BiK tax rates. For 2020-21, business users of electric cars pay absolutely no BiK tax whatsoever. By comparison, a former company-car favourite, the Ford Mondeo, now attracts a steep BiK rate when specced with a 2.0-litre diesel engine. So, although they may come with a larger price tag, they’ll end up saving you more money in the long term.
Here is our list of the 10 best company cars you can buy today:
The Tesla Model 3 won our overall Best Company Car award for 2021 because it’s a fully electric saloon for a similar price as a mid-spec BMW 3 Series. Its whisper-quiet electric powertrain is a real plus for company-car drivers, as you’ll pay nothing in BiK for 2020/21 and enjoy huge savings on fuel. While Tesla’s impressive Supercharger network isn’t free for Model 3 users, it’s so good that recharging on the move is pretty painless. The Model 3 is the first Tesla to be compatible with other charging networks too.
The BMW 5 Series has long been a favourite of company-car drivers and it’s even more appealing with a plug-in hybrid powertrain. In fact, there are now two 5 Series hybrid options, but it’ll be the 530e that’ll take the most sales. This model has a relatively small 2.0-litre petrol and manages 37 miles of electric range, plus it has the lowest BiK rating out of any 5 Series. Because the PHEV isn’t too much more expensive than a 5 Series with a normal petrol or diesel engine, the 530e could well be the pick of the range for business and private buyers alike - and we named it our Best Large Company Car for 2021.
It’s now sold alongside a 545e xDrive model, which improves performance while still managing up to 33 miles on battery power. The 530e is no slouch, hitting 0-62mph in under six seconds, but the 545e is sports-car quick, reaching that marker in just 4.6 seconds. A six-cylinder 3.0-litre engine is fitted and the powertrain (lifted from the BMW X5 xDrive45e) as a whole produces nearly 400bhp.
Officially the UK’s best-selling car for a short period in 2020, the Model 3 offers quite a lot more than just low running costs. There’s the performance for one thing, as all models offer rapid acceleration, while the interior is both futuristic and spacious. Tesla’s smallest offering scored top marks for safety too, especially in the safety assistance category.
If the 530e and Model 3 are out of budget, the recipient of our 2021 Best Small Company Car award is worth a look. The current Mercedes A-Class has struck a chord with UK buyers, largely due to its sublime interior, while the efficient petrol and diesel engines have now been joined by a business-friendly plug-in hybrid offering.
The Mercedes A 250 e adds an electric motor and a 15.6kWh battery to the existing 1.3-litre petrol engine, resulting in an electric range of around 40 miles and official CO2 emissions of just 37g/km. When you’re in a rush, the two power sources combine to make it possible to reach 0-62mph in 6.6 seconds, so it can keep pace with a Volkswagen Golf GTI.
The latest BMW 3 Series has again proven an easy choice for company-car drivers, following on from the previous generation model as it does with a very well equipped and beautifully built interior, good handling and strong engines. You'll not be disappointed on a twisty road; the car's rear-wheel drive (or optional four-wheel-drive xDrive) setup is responsive and well balanced, and even the less powerful models are fun to drive.
With an electrically assisted engine, the 330e plug-in hybrid is the model to pick. It can cover up to 37 miles on electric power, and is a potential money-saver due to a low BiK rate as a result of 39g/km of CO2.
The Jaguar I-Pace is the firm’s first attempt at an electric car and undercuts the rival Tesla Model X. As a zero-emissions electric car it gets an affordable BiK rating and boasts stunning exterior design and a beautiful interior, even on the entry-level S spec.
It’s also practical, thanks to a 656-litre boot and a small boot under the bonnet. With a range of up to 292 miles and a 0-62mph time of 4.8 seconds, the I-Pace easily matches a majority of the cars on offer here for range and ability.
The Volkswagen ID.3 is the brand’s electric alternative to the VW Golf. It’s spacious and fun to drive but offers running costs that a conventional Golf can’t hope to match. It’s significantly cheaper than the Tesla Model 3 but the range-topping models offer similar range.
Although the ID.3 is actually fractionally shorter than a Golf, the wheelbase (the distance between the front and rear axles) is 13cm longer. This means there’s more room inside, especially when it comes to rear legroom. Despite the rear-mounted motor, the ID.3 also offers five extra litres of boot space over the VW Golf, totalling 385 litres.
The smallest 45kWh battery boasts a pure-electric driving range of 205 miles, while the range-topping 77kWh model can travel up to 341 miles between charges. By comparison, the most affordable Tesla Model 3 offers 254 miles of range. As an electric car, the ID.3 falls into the Benefit-in-Kind (BiK) bracket of just 1%. Assuming your daily commute doesn’t exceed the electric range on offer, the ID.3 could save you a lot of money in company-car tax.
Volvo has been on a hot streak in recent years; the latest models have maintained the brand’s reputation for safety while gaining an upmarket edge to rival anything from Germany. The Volvo XC60 is an excellent example of this progress with an SUV that is good-looking, comfortable, refined and packed with an array of modern tech.
Our pick for company car drivers would be the XC60 T8 Twin Engine hybrid model. This can manage around 30 miles on electric power, producing only 49g/km of CO2 when specced with smaller wheels in sporty R-Design trim, giving it a low BiK rating.
If you’re looking for an electric SUV with one of the best ranges, look no further than the Kia e-Niro, which can travel up to 282 miles. This puts it in the same league as the Jaguar I-Pace and Audi e-tron, which are almost double the price of the e-Niro. The exterior might be a little bland but the Kia’s boxy dimensions provide a spacious interior and a 451-litre boot capacity.
Reliability and owner satisfaction is well proven too, as the Niro finished 10th out of 100 cars in our recent Driver Power survey. We can think of no other EV that is better suited to everyday family life and it’s a car that’s almost unbeaten as an all-round electric car package. Even better, company-car drivers will appreciate not paying BiK tax for the 2020/21 tax year.
The Skoda Superb iV plug-in hybrid joined the Superb range as Skoda’s first electrified car, and is expected to account for up to a quarter of sales. Company drivers will appreciate the Superb’s comfort and relaxed driving manners, as well as the excellent build quality.
The Superb iV uses a 1.4-litre petrol engine, electric motor and battery, which together can deliver up to 34 miles of electric range. The main reason company-car drivers will go for this powertrain over the diesel is because of the significant BiK tax savings but they should also love the Superb iV as it's such a great all-rounder.
Mercedes offers the plug-in hybrid E-Class with both petrol and diesel engines, known as the E 300 e and the E 300 de respectively. The E-Class was already a great all-rounder but the added bonus of plug-in hybrid economy boosts its appeal as a company car.
The E 300 de diesel plug-in hybrid uses the same 191bhp 2.0-litre, four-cylinder diesel engine from the E 200 d along with a 121bhp electric motor for a maximum output of 302bhp. It can travel up to 34 miles on electric power alone, meaning many drivers won’t have to use any diesel for their daily commutes. The battery of the E 300 de can be fully charged in two hours from a 7.4kW wallbox.
Want to find out whether hybrid, plug-in hybrid or electric power is better suited to you? Click here to read our Hybrid vs plug-in hybrid vs electric cars guide.