A director in charge of a small business wants a company car.

The alternative of taking cash and running a private car comes a distinct second.

The average spent on a managing director’s company car was £30,000.

The most popular choice of car was a Mercedes. The average cash alternative was £6500.

These are the findings from the annual Directors R£wards survey, published by the Institute of Directors (IoD).

The 2006 survey reinforces last year’s report - small business MDs prefer the security of a company car. Only 36% took the cash.

The directors of medium sized companies also seem keener on the company car. Last year 46% took a cash alternative. This year it dropped to 41%.

Their counterparts in large companies, however, are more inclined to take cash now instead of the car. Last year 30% took a cash alternative. This year it was 42%.

Average spend on directors’ company cars

• Small businesses: £30,000. Most popular car: Mercedes
• Medium businesses: £35,000. Most popular car: BMW
• Large businesses: £40,000. Most popular car: Jaguar

Average cash alternative to the company car

• Small businesses: £6500
• Medium businesses: £8500
• Large businesses: £10,400

Source: IoD