ECOS is Changing: Why OEMs Should Lead the Shift to Dealer Staff Affinity Schemes

Stephen Lambert
Oct 2
3 min read

From 6 October 2026, the rules on Employee Car Ownership Schemes (ECOS) will change. Draft legislation published by HMRC confirms that many current ECOS structures will be treated as company cars for tax purposes, subjecting them to full Benefit-in-Kind (BIK) taxation.

This shift will affect an estimated 76,000 individuals currently using ECOS, including thousands of staff within franchised dealer networks. For decades, ECOS has been a core staff benefit in the motor trade, helping employees access new vehicles at preferential terms while feeding dealers with a stream of low-mileage used stock. But with the tax advantage disappearing, OEMs and dealers need to act quickly to secure the benefits these schemes once delivered.

The opportunity lies in transitioning to dealer staff affinity schemes — a compliant, flexible, and OEM-backed alternative that safeguards the commercial, cultural, and operational value ECOS once provided.

Why the End of ECOS Matters to OEMs

While ECOS schemes were often administered at the dealer level, the benefits flowed up to the OEM:

Dealer staff driving brand-new vehicles acted as visible brand advocates.
Nearly-new cars returned from staff use bolstered approved used pipelines.
Incremental sales supported national volume targets.

If ECOS disappears without a replacement, OEMs risk losing all three. But by introducing OEM-supported affinity programmes across their dealer networks, they can secure and even enhance these benefits — under a structure that is transparent, tax-safe, and future-proof.

How Dealer Staff Affinity Schemes Work

Affinity programmes allow every member of the dealership workforce to access a new vehicle at controlled, preferential terms. Unlike ECOS, they are structured as retail sales, avoiding the tax pitfalls of BIK. And with VPS managing eligibility, validation, and process control, schemes remain fully compliant while offering flexibility across ICE, hybrid, and EV models.

This means:

Sales executives gain credibility by driving the latest models.
Aftersales and service advisors understand the ownership journey first-hand.
Technicians gain hands-on familiarity with the cars they maintain.
Admin and support staff feel recognised and valued, boosting morale.

By extending access to all dealership functions, affinity schemes deliver broader engagement and stronger cultural alignment with the OEM brand.

Benefits for Dealers

For dealer groups, the commercial case is clear:

Incremental new sales: By opening eligibility to all roles, schemes often deliver up to 10% additional volume within targeted groups.
Predictable used pipeline: Cars return after around two years and 20,000–30,000 miles as one-owner, full-history vehicles, perfect for retail and certified used programmes.
Aftersales revenue: All servicing, maintenance, and preparation work stays within the dealer network.
Retention and pride: Offering every employee a tangible benefit builds loyalty and reinforces brand culture.

Benefits for OEMs

For manufacturers, supporting dealer staff affinity schemes secures:

Volume growth without uncontrolled discounting.
EV acceleration, by prioritising electric models in staff schemes and turning dealer staff into real-world EV advocates.
Residual value protection, with vehicles re-entering the market after two years through controlled remarketing pipelines.
Network loyalty, by giving dealer partners a long-term, sustainable replacement for ECOS.

In short: dealer staff affinity schemes give OEMs a direct lever to influence sales, brand alignment, and dealer engagement — all while avoiding the compliance risks ECOS now faces.

Why VPS?

VPS already runs affinity programmes for leading OEMs, delivering measurable impact across sales, staff engagement, and used car supply. Our offer includes:

A fully branded platform for scheme management.
Dynamic configurator with CRM integration.
Eligibility validation and audit controls to ensure compliance.
Dealer portals for simple enquiry handling.
Full dealer and customer support
End-to-end administration, from enquiry through to remarketing.
Marketing and engagement support to maximise uptake.

In other words, we remove the complexity so OEMs and dealers can focus on growth.

The Road Ahead

From October 2026, ECOS as we know it will no longer work. Some may attempt to restructure schemes, but the risk and complexity are rising fast. Affinity is the logical successor: compliant, flexible, and powerful.

For OEMs, now is the time to lead. By transitioning dealer staff schemes into affinity programmes, manufacturers can secure incremental volume, support dealer retention, and strengthen their brand in the eyes of both staff and customers.

Speak to VPS today to explore how we can help your network transition from ECOS to Affinity — safeguarding value, growing sales, and futureproofing your dealer employee benefit strategy.