Belgium approves 'Cash for Car'
'Cash for Car' (C4C) will soon be the law of the land in Belgium. The country's parliament has just approved the measure, by which employees will be able to exchange their company car for a higher net wage.
The C4C principle is one way in which the Belgian government is trying to stem the seemingly unstoppable rise of company cars.
By some estimates, half of all cars on Belgian roads are company cars – and that high share is considered by some a major contributing factor to the country's endemic congestion problems and air quality issues.
One of the main reasons for the fact that more than 500,000 Belgians are driving a company car is the fact that for employers, providing a vehicle for their employees is fiscally more advantageous than giving them a raise for an equivalent gross amount – company cars are taxed significantly less than wages per se.
C4C is designed to put a dent in that principle, and promote mobility alternatives. The monthly wage increase will depend on the official list price of the company vehicle the employee gives up.
The government expects between 3% and 9% of company car drivers to give up their corporate vehicle, which would mean the removal of 15,000 to 50,000 vehicles from the road.
It remains to be seen whether C4C will have the beneficial impact as expected by the Belgian federal government. A recent survey of company car drivers and corporate fleet managers found that C4C would not persuade 60% to give up their vehicle.
The majority of the ones open to the measure would use the savings to buy another car, typically a bigger, more comfortable second-hand vehicle. The survey predicts that the effect of motorists transforming into users of public transport or other commuting alternatives (biking and car-sharing among them) will be limited.