Many companies offer their employees company cars as part of their job role. It may be that the car is needed to travel to and from one place of work or that it is needed for travel within your usually working day.
The cost of hiring the car is often paid for by the company but then you are usually liable for the company car tax or benefit in kid payments. The reason the government tax people for the use of business cars is for two reasons. Firstly to charge for the private use of the vehicle as most company cars allow you to use the vehicle out of work too and secondly to encourage drivers to be more eco-friendly as the higher the co2 emissions are of the vehicle the more company car tax you will have to pay. This is why many companies will encourage their employees to pick a smaller more efficient car to keep the tax low.