An employer wants to spend around £40k (before discount) on a car for an employee. What’s the cheapest option for both parties?

If you can find one the answer, by a clear margin, is a fully electric company car.

We’ve reviewed 3 similar cars, two BMW 3 series (a diesel and a PHEV) and a Tesla 3. In the graph below we’ve added the employee and employer annual net cost together to give a total cost for comparison.

The Tesla 3 weighs in at a total average annual net cost over three years of just over £8k. The BMW 320D is getting on for double that at £15.3k.

The BMW 330e PHEV as a company car costs employer and employee combined just over £10.2k net.

If the 320D is provided by the employee who takes an equalised cash allowance and AMAP the total cost is £9.8k net.

This leaves you with a clear conclusion (based on these 3 cars); if you can find one and make it fit your needs, an electric car is the best option from a cost perspective. The second most cost effective option is to take an employee equalised cash allowance, but that’s only marginally more expensive than taking a PHEV as a company car.

Taking a traditional petrol or diesel as a company car is literally twice as expensive.