Fleet firm blames Chancellor’s Budget for surge in redundancy-linked car returns

Midlands-based Fleet Evolution has slammed Chancellor Rachel Reeves’ Autumn Budget, blaming it for a record rise in returned vehicles caused by staff redundancies across its client base.

The salary sacrifice and fleet management provider says changes introduced in April –including a hike in employers’ National Insurance Contributions (NIC) from 13.8% to 15.0%, a lower NIC threshold, and an increased Minimum Wage – have put unsustainable pressure on employers.

“Following on from Rachel Reeves’ misguided first Budget, which she said would not affect ‘working people’, we have seen record levels of returned vehicles due to redundancies of working people.”

Leech revealed that returned electric and hybrid vehicles jumped by 43% last month – the highest since the company launched in 2012.

Although the business is absorbing the impact through its no-quibble returns policy, which shields employers from extra costs, the spike highlights growing unease in the jobs market.

“It did not take a rocket scientist to realise that far from having no effect on working people, the Budget changes would have a profound effect on recruitment and retention of employees as employers looked to contain cost increases in the light of the changes to National Insurance and the Minimum Wage,” said Leech.

Despite the redundancy surge, the returned vehicles are swiftly being redeployed, often through short-term EV subscriptions offered by Mercia Fleet Management’s Subscribe Electric service.

“Businesses are realising that one way of mitigating the effect of these increases and exerting greater control over costs is to flexibly introduce electric cars on subscription rather than long term leases. A such we are seeking a marked lift- off in the number of cars provided by this service,” said Leech

“Short term EVs can be highly attractive from a cost point of view at a time of rising costs for most businesses following the Budget. And because of their zero carbon emissions, they can also play a role in helping businesses meet their corporate sustainability targets at the same time.”

Subscribe Electric includes fully expensed EVs –covering servicing, insurance, and breakdown –with only electricity left to pay for, making it a popular option for businesses looking to cut costs and carbon emissions simultaneously.