The Private Cars < 180 miles is a cost thing. At HMRC rates of 45p per mile, a hire car can be cheaper than paying a mileage rate.
I agree that it is a petty and time consuming policy. Having said that, when I last had a Corporate job (as opposed to my own business) in 2006, most of us had opted out of the company car scheme. They were (compared to Peter's policy) relatively free on what you could drive, but your choice of car did have to be approved - everyone drove a 4 door car as we were expected to carry passengers regularly.
