Dylan Robertson45% of car dealers have said that the Government’s ending of employee car ownership (ECO) schemes will negatively affect recruitment in the automotive industry, according to data released by Startline Motor Finance.
The Government announced plans to end ECO schemes by April 2026 in the October Budget, with Chancellor Rachel Reeves calling the changes necessary to “level the playing field,” as ECO scheme members avoid benefit-in-kind (BIK) and National Insurance payments.
ECO schemes allowed dealer and car industry employees to buy highly discounted new cars from their employer, on short-term leases with low monthly payments.
Paul Burgess, CEO of 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.”
However, 35% of surveyed dealers said that they always believed ECO schemes were questionable, and agreed with the Government’s decision to end such schemes, while 24% have already stopped providing them.
Burgess added: “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.”
The data was collected by APD Global Research, surveying 308 consumers and 66 dealers, as part of Startline Motor Finance’s monthly ‘Used Car Tracker’ survey.
