‘Cash for Car’ not catching on

Arnaud Henckaerts Posted On May 23, 2019

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The Belgian ‘Cash for Car’ alternative for salary cars is not catching on. One year after its introduction, hardly anyone has made use of the system /Belga

The Belgian ‘Cash for Car’ alternative for salary cars is not catching on. The federal government devised the scheme to allow those who have a company car for fiscal reasons, to exchange it for a fiscally advantageous net fee of 700 euro.

But one year after its introduction, hardly anyone has made use of the system. HR service provider SD workx, which represents 24.000 companies with company cars, counted only 142 switches to ‘Cash for Car’ until mid March.

Competitor Acerta, representing 40.000 companies, reports 1 in 1.000 of its clients made the switch.

Mobility budget more interesting

According to experts, the ‘Mobility Budget‘ system makes Cash for Car mostly redundant. With the mobility budget, another fiscal government scheme, employees can switch their car for a more eco-friendly car, supplemented with some alternative forms of transport or cash.

Providing the option of a full cash payout, the Mobility Budget is often more advantageous than Cash for Car according to Acerta. SD Worx does see a future for the system and it is starting to generate more interest. Employers had to adapt their mobility policy and are awaiting the end of lease contracts.

The government has also made access to Cash for Car easier. Since the first of March, not only those who have a company car but also those who qualify for one, can join. This even applies to newcomers in a function that qualifies for a car.

Cash for Car vs Mobility Budget

The calculation of the cash amount in the Cash for Car and Mobility Budget system differs. Cash for Car uses the list price of the car to calculate the monthly cash sum, on which the employer pays a small tax. The Mobility Budget uses the real yearly cost (TCO) for the employer as a basis. On that amount, the employee pays a 38,07 % tax.

Cash for Car is mainly interesting if the TCO is very low. This could be because the employee lives close to work and doesn’t drive his car much. But this is a rare occurrence.

Popular at Luminus

At energy supplier Luminus, Cash for Car is surprisingly popular. Since the introduction of the system there at the end of last year, 380 employees exchanged their company car for cash.

“Some employees with a car don’t feel the need for one or see that public transport is a good solution for them”, says Luminus spokesman Peter Dercon. “The fact that we stimulate employees to use alternatives like Cash for Car or the Mobility Budget, makes them consider it.”

At Luminus, five company car drivers are even on a waiting list. They can only start using Cash for Car when their lease contract is up or when someone else takes over their car.

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