Best small company cars
Our list of the top 10 small company cars will ensure your monthly Benefit-in-Kind bills are kept in check.
If you’re lucky enough to have one, a company car is a fantastic perk. It’s difficult not to get excited by a choice list with a catalogue of different cars to choose from and, as much fun as that is, it also makes sense for businesses to have their employees in modern, safe and fuel-efficient vehicles.
It isn’t always the case, but most companies typically source their cars from leasing companies, which means they pay a fixed rate for the vehicles each month. As well as being a big draw for employees, that set up also works well for the business, because the contract with the leasing company usually includes the likes of maintenance and a replacement vehicle if the main car breaks down, so it’s an easy way of keeping your workers mobile.
Company cars are taxed in a different way to private ones, as drivers have to pay Benefit-in-Kind (BIK), which is worked out based on the price of the car including any options (known as the P11D value), the vehicle’s CO2 emissions and whether the employee using the car is a lower (20%) or a higher (40%) rate taxpayer.
Vehicle Excise Duty (VED), or private car tax, is also governed by CO2 emissions, but they make even more of a difference to company car benefit-in-kind. As a result, cars with a low P11D value and the lowest possible CO2 figures make the most sense for employees. Generally, that means small, affordable cars with clean and frugal engines generate the lowest costs for workers with the perk.
That’s also why our list of the 10 best small company cars is made up of compact models with excellent running costs and rock bottom P11D values, to help keep Benefit-in-Kind bills to a minimum.
Read on for our 10 best small company cars.
If you really want to streamline your company-car tax bills, electric cars score highly for having zero CO2 emissions, putting them in the lowest 9% Benefit-in-Kind (BiK) band. Electric cars can be expensive in other ways, though, and the ZOE is one of just two all-electric cars in this list. While you can buy one for less than £20,000, that figure doesn't include the battery, which must be purchased or leased separately. Neither are cheap, but you could recoup that cost fairly quickly by never needing petrol. A full charge only costs a few pounds and can be performed overnight, giving you a range of up to 149 miles with the standard battery pack or 250 miles if you go for the ZOE Z.E. 40. Easy to drive, the ZOE is a good looking and relatively spacious hatchback, with a comfortable ride and a very quiet interior. Despite its eco-friendly credentials, it can put a smile on your face on a country road, too.
The original Nissan Leaf was the world's best-selling EV. The second generation is the result of all Nissan's learning – and it shows. Not only does it look sharper, the Leaf is now a far better all-rounder, with an improved 217-mile driving range and faster charging. A rapid charger can replenish the battery pack to 80% in 40 minutes, while even on the move, a novel 'e-Pedal' driving mode means kinetic energy helps keep the batteries topped up as you slow down. The Leaf is exempt from the London Congestion Charge, qualifies for a £4,500 Government plug-in car grant and company-car drivers are liable for the lowest 13% BiK band.
The Hyundai Ioniq Hybrid is South Korea’s answer to the Prius, and thanks to having a lower price, it comfortably undercuts the well known Toyota on its P11D value, and this is equally true of the Plug-In version. Claimed CO2 emissions of just 26g/km place the Ioniq Plug-In in the 13% BiK category, so company-car tax payments are low. Employers will be pleased by the potential for 267mpg fuel consumption, but urban commuters will find it easier to achieve this figure than those whose daily routine takes in faster roads and longer routes. It's exempt from the London Congestion Charge, too, and its all-electric mode offers up to 39 miles of near-silent driving. The Plug-In is also extremely well equipped and we reckon it's a little better looking than its Toyota rival.
The Toyota Prius unquestionably enjoys the highest profile of all hybrid cars – its name is known the world over and Toyota's first hybrid quickly became a byword for responsible motoring. When the Plug-In version arrived, though, the Prius' planet-saving claims became far more credible, reinforced by ultra-low 22g/km CO2 emissions and claimed 283mpg fuel economy. Urban commuters may come close to realising these figures, too – although a low BiK rating of 13% is guaranteed no matter what fuel consumption you actually achieve. A fully charged Prius Plug-In is claimed to be able to cover 39 miles before the battery needs a charge, which takes just three hours from a household plug socket. The Prius also has an excellent reputation for reliability and the Plug-In ought to be little different. The only real letdown is a CVT automatic gearbox that causes the engine to rev noisily, detracting from the driving experience compared to its more conventional Hyundai Ioniq Plug-In rival.
The latest third-generation Hyundai i10 city car eschews sophisticated hybrid technology and earns its place in our list simply by boasting remarkably low CO2 emissions. Inevitably, with just 66bhp from its three-cylinder 1.0-litre engine, the i10 isn't the nippiest car in the world, but it copes admirably with urban traffic and perhaps the odd foray out of town. It returns 56.5mpg and CO2 emissions of 101g/km. The bigger 1.2-litre engine is a far better choice if you're likely to make many motorway journeys, as its extra pulling power makes driving more relaxing. The 1.2-litre i10 returns 55.4mpg with a manual gearbox, 52.3mpg with the automatic, and CO2 emissions are 105g/km. Urban commuters will find that the 1.0-litre stacks up well, particularly when you look at its low P11D value, the figure from which company-car tax is derived.
The Lexus CT200h has a very specific appeal and company-car users will find it a compelling choice. Its big plus point is very low CO2 emissions (as little as 88g/km for the entry-level SE model), although all models fall within the 17% BiK tax bracket. This is far lower than any of its premium compact executive rivals, while employers are bound to be pleased with claimed fuel consumption of up to 68.9mpg. The CT has a smart, well equipped and nicely constructed interior, too, and no shortage of bells and whistles. However – being based on the same mechanical package as the Toyota Prius, the CT 200h isn't much of a 'driver's car'. It uses a CVT automatic gearbox that causes engine revs to soar noisily when you don't expect them to and can be slow to respond when you demand extra acceleration. The ride is a little on the firm side, too, which is rather at odds with its easy-going nature. If low company-car tax is your top priority, though, the fact that entry-level versions of the CT 200h actually undercut the P11D value of the Toyota Prius make it very hard to ignore.