The best small company cars for tiny BIK rates

Best for: A premium feel

It’s perhaps unkind to call the Audi A3 Sportback a VW Golf in a posh suit, but in many respects that’s exactly what it is. 

However it’s propelled, and largely irrespective of its specification, the A3 remains one of the biggest-feeling small cars around.

Matt Saunders, Road test editor

Underpinned by the same MQB platform and using largely the same range of engines, the Audi offers similar levels of space, poise and performance, but wraps it up in a more stylish package that benefits from the greater kudos that comes with the four-ringed badge on its front grille. 

Like the Golf, the A3 has been treated to a mid-life refresh that extends to sharper exterior design and an even more upmarket interior. As before, there’s also the option of a saloon version for those wanting that traditional company car vibe.

The best engine for company car drivers is the same plug-in hybrid powertrain used in the Volkswagen Golf eHybrid. You’ll get 201bhp and a 0-62mph time of 7.4sec but, most importantly, that 88-mile EV-only range, which results in a 5% BIK banding. 

Best for: Engagement

The original electric Mini Cooper was big on fun yet small on range, but for this all-new model, the British brand has injected a little extra stamina.

This second-generation electric Mini is certainly a more grown-up electric car than the original.

Matt Saunders, Road test editor

In fact, on the flagship Cooper SE (there’s also a cheaper and less rangy Cooper E), battery capacity has been increased from the old car’s 28.9kWh to a far more handy 49.2kWh. That means a useful claimed range of 224 miles, not far off twice the distance of its predecessor.

However, this boost in battery capacity has also come with an overall increase in size, to the point that it’s a bit of a stretch to call the car a Mini. Still, it’s the most roomy three-door the firm has ever made, while the interior features enhanced premium appeal and some glitzy-looking tech.

Crucially, the Mini retains enough of its trademark agility and back-road boisterousness – not to mention occasionally hyperactive ride – to keep things interesting, with fast steering, strong grip and a low-roll stance.

And when you’ve had your fun on the way home from work, you can relax in the knowledge that you’re paying a piffling 3% BIK bill

Best for: Practicality

The MG 4 is a great choice for those seeking an affordable electric company car.

It is up there with the Cupra Born for chassis sophistication, in the right specification delivering both a comfortable ride and an enjoyable rear-drive balance.

Matt Saunders, Road test editor

Like other models in the MG range, the chunky hatchback comfortably undercuts the competition on price and does so with some head-turning style and a premium-feeling interior ambience.

It’s also good to drive, with biddable handling and a decent turn of speed, even in entry-level 158bhp guise. Apart from a relatively firm low-speed gait, the MG 4 rides bumps with an easygoing demeanour.

There’s a range of battery options, with everything from 51kWh to 77kWh. However, it’s the 64kWh version in the SE Long Range that delivers the best blend of distance (281 miles) and price (a whisker under £30,000). 

With a 3% BIK rating, it'll cost lower-rate earners a maximum of just £118 a year in tax. For those wanting high-voltage entertainment, there’s the wild 429bhp twin-motor XPower flagship.

Best for: Real-world economy

Toyota went bold with its second-generation CH-R, which builds on the success of the original with an even more eye-catching design. With its coupé-inspired looks and neat two-tone paint scheme, the high-riding crossover easily stands out from the company car crowd.

Whichever hybrid option you choose, you're unlikely to be disappointed by the Toyota C-HR’s economy

Jack Warrick, Staff Writer

The interior has been given an equally thorough going-over, with a neater design and an extra injection of premium appeal. It also benefits from Toyota’s latest and easier-to-use infotainment, plus an array of advanced driver aids, which will be music to the ears of any fleet manager grappling with the company car risk assessment spreadsheet. 

Less impressive is the amount of room for rear passengers, who will be made to feel even more cramped by the tiny side windows. Accommodating the hybrid running gear also shrinks the boot to a supermini-sized 310 litres

On the plus side, there’s plenty of substance to go with the style. Thanks to the brand’s TNGA architecture, the CH-R is good to drive, with naturally balanced handling and a supple ride. It’s also boosted by a new, smoother and more refined plug-in hybrid drivetrain that develops 220bhp and offers a claimed 41 miles of EV running for a 9% BIK rating.

Best for: Style

We’ve already named the Renault 5 as the best small electric car, but we also think France’s fantastic retro EV is a great option for company car drivers specifically. 

At 1461kg on the road test weighbridge, the Comfort Range 5 is a good deal lighter than the Mini equivalent, to the benefit of its ride and handling.

Illya Verpraet, Road Tester

A genuine class-leader in its field, the Renault 5 possesses great handling, a brilliant ride quality and an interior with high-end materials. 

The Renault 5 gets a 148bhp electric motor that’s powerful enough for daily driving and commuting. You can cover 0-62mph in 7.9sec and the claimed range stands at 250 miles from a 52kWh battery. 

Of course, because the Renault 5 is electric, it produces zero emissions so lands in the 3% BIK band, which means you’ll pay a basic rate of £162 a year in tax if you opt for the Comfort specification level.

Best for: Handling

The Cupra Born has been on sale for several years now, but it’s still an excellent electric option and merits serious consideration as a small company car. 

The Cupra Born is at the top of the compact EV class for driver appeal, even in entry-level form.

Illya Verpraet, Road Tester

Few models offer a finer blend of practicality, power, real-world range and fun, and it’s just as impressive in the money stakes. It’s a zero-emissions car, which means a 3% BIK banding and low annual tax bill.

The overall package is substantial. The Born gets rear-wheel drive as standard and either 201bhp or 227bhp. It’s seriously rewarding to drive, with great agility levels and well-balanced handling. Essentially, the Born feels like a GTI for the electric era.  

Depending on the battery size you choose (either a 59kWh or a 79kWh unit), Cupra’s Volkswagen ID 3 rival offers between 259 and 364 miles of range. That’s a competitive figure in today’s market. 

The range-topping Cupra Born VZ is a more hardcore option with 322bhp and 402lb ft of torque. It hits 0-62mph in 5.7sec - over one second faster than the regular Born. 

Best for: Families

The Skoda Elroq takes the same combination of ability on show in the larger Enyaq and squeezes them into a more compact package. 

The Elroq isn’t the boxiest or loftiest compact SUV, but it’s nonetheless easy to get into, and there’s enough head room and seat-base height adjustability to perch up high and boost visibility.

Matt Saunders, Road test editor

Majoring on comfort, practicality and an eye-catching design, the Elroq also benefits from an enticing entry price of just over £30,000. 

So in addition to being zero-emission and sitting in the 3% BIK bracket, it attracts far less in tax per year than many other company cars. 

In the range department, the Elroq comes with a wide choice of battery sizes, starting with a 52kWh unit with 232 miles, rising to 77kWh and 360 miles of range. Power ranges from 168bhp to 282bhp.

Best for: Power

The Tesla Model 3 is the largest car on this list, but its merits as a company car cannot be ignored. 

Few cars offer up performance as easily as the Model 3 Long Range, and the car’s almost toy-like demeanour belies the magnitude of that performance.

Richard Lane, Deputy road test editor

Updated in 2024, the Model 3 gained a sharper front end and a higher-quality interior. It remains as practical as ever, with a combined storage space of 682 litres in the boot and front trunk combined. 

The blend of performance and range helps the Model 3 stand out against its rivals. Even basic rear-wheel-drive cars get 241bhp, while range-topping all-wheel-drive variants have 491bhp. 

As for range, the Model 3 offers a choice of standard- and extended-range variants, with between 344 miles and 391 miles available depending on specification. 

Like the Cupra Born, MG 4 and Renault 5, the Model 3 has a 3% BIK banding, which means you’ll pay from £240 a year on a basic rate salary.