You might have seen an influx of new pick-ups on the roads in recent years, and you won’t be the only to have noticed.
Pick-up sales are on the increase, with the segment now being one of the fastest growing sections of the new car market.
And often it’s not just builders and those using them as working vehicles who have them, it’s consumers getting them to replace company cars.
But what are the benefits of having one as a company vehicle?
The first thing to remember is that pick-ups don’t fall into the ‘car’ category, they’re classed as light commercial vehicles, and therefore vans – just providing they have a payload of 1000kg or over.
This means there’s big tax savings to be had, as they’re taxed differently.
Company car tax is calculated using benefit-in-kind (BiK), which in the case of pick-ups is set at a fixed £3,350 (2018/19 year). This means that if you’re taxed at 20 per cent, you’ll pay just pay £670 per year (£55.83 per month) to have a truck as a company vehicle.
Unlike car tax, pick-up rates are not calculated based on a vehicle’s P11D value or emissions, meaning that they aren’t affected by list price. For cars, company car tax rates are calculated by the car’s P11D value (list price including options, but minus registration fees) multiplied by the benefit-in-kind percentage then by your tax rate percentage.
We’re pitching the Ford Ranger pick-up against a similarly-priced Ford Kuga crossover here. A Kuga with the 148bhp 2.0-litre diesel engine in Titanium trim has a P11D value of £27,630. This multiplied by its 35 per cent BiK percentage (0.35) equals £9,670.50. Multiply this by your tax rate (20 per cent for example – 0.2) and it amounts to company car tax rates £1,934.10 for 12 months. If you decide to pay this monthly, it works out as £161.18 per month – nearly three times more than you would pay for your pick-up each month. When business users can save £100 a month in some cases just by switching to a pick-up, the attraction of these vehicles all begins to make sense.
What other savings are there for pick-ups?
Another area where you might be able to save money is when it comes to fuel, or more specifically private-use fuel that’s paid for by your employer. For 2018/19, the taxable benefit amount was £633, which is then multiplied by your tax banding (either 20 or 40 per cent).
This is an area where you’ll notice large reductions over using a car instead – and to your employer’s benefit, too.
What are the downsides of having a pick-up?
While there are big savings to be had through driving a pick-up as a company car, there are some negatives to using these vehicles.
The first of these is practicality. They might have huge load bays, but unless you have a lockable cover on the back, a pick-up can be impractical to use on a daily basis. That said, they can carry huge loads at one time, which is a big advantage.
If you also live on a tight street or where parking is at a premium, these vehicles can often be difficult to manoeuvre, which is something you might have to consider. Pick-up trucks can also feel a bit agricultural behind the wheel, and don’t always have all the luxuries you might expect to find from a similarly-priced car.
Finally, there is the overall running costs. Depending on the pick-up you go for, they can struggle to return over 40mpg, which could be much less efficient than other company cars. If you have to pay for your own private fuel, it could be worth weighing up the extra expense in this department, against the other savings you might be making.