Almost half of dealers (45%) say the ending of employee car ownership (ECO) schemes last month will hit staff attraction and retention, according to Startline’s May Used Car Tracker which polled 308 consumers and 66 dealers.
The survey found 38% think the ECO schemes are an important benefit for dealer staff while 41% believe “a lot” of current government actions are negatively affecting car dealers.
Paul Burgess, CEO at Startline Motor Finance, said: “Attracting and keeping good quality staff remains an issue for many dealerships and the ending of ECO schemes by the Chancellor planned for next year is clearly felt to remove a key element of employee benefits packages.
“What is perhaps noteworthy is that a large number of dealers – more than four out of 10 – also feel that this is part of a pattern from the government, that they are just generally making life quite difficult for dealers.
“Perhaps everything from higher employee national insurance to substantially increased levels of minimum wage can be placed under this heading although, on the other side of the balance sheet, we now have sensible revisions to the Zero Emissions Vehicle Mandate.”
At the October Budget, the government announced plans to end ECO schemes by April 2026, calling them a “contrived” method of avoiding benefit in kind taxation.
Startline’s Used Car Tracker showed that 35% of dealers agreed with this while 24% have already replaced them with another option.
Burgess said: “This finding suggests that around a third of dealers feel ECO schemes are fundamentally problematic and it was perhaps only a matter of time before action to end them was taken by the Treasury.
“However, it’s positive to see that a quarter of dealers have already looked to replace their ECO scheme with a new form of car provision for staff, and these will hopefully help to resolve any employee attraction and retention problems that are arising.”