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Grey Fleet costing UK businesses £5.5bn

BVRLA research revealed that employees who use grey fleet to travel for work cost their businesses £5.5 billion a year in mileage claims and car allowances.

Grey fleet is the term used for vehicles that are used by employees for business travel but do not belong to the company. These can be cars that are purchased via an employee ownership scheme, are privately rented or privately owned by an employee.

The report’s key findings:

  • According to BVRLA these vehicles are responsible for 3.6 million tonnes of CO2 per year.
  • 1.5 billion miles per year are driven in grey fleet vehicles within the public sector at a cost of £786 million.
  • 11 billion miles per year are driven by grey fleet vehicles in the private sector at a cost of up to £5 billion.

What is the problem with grey fleet?

Employees are often reimbursed on a pence per mile basis. If their car is an older model that is not fuel efficient then the company is spending more money than it needs to.

Older cars create more emissions than more modern vehicles that can be purchased or hired by the company for business purposes.

There is no incentive via the Approved Mileage Allowance Payments (AMAP) system for drivers or the company to drive greener vehicles.

What can be done?

There is no one size fits all approach to business fleets; what suits one business and its employees may not suit another.

There are several options for businesses that need vehicles for employees.

Contract Hire

A popular fleet funding choice among businesses, contract hire allows companies to lease vehicles for a limited time period for a fixed monthly cost.

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Salary Exchange

Allows employees to sacrifice a fixed amount of their salary in exchange for a fully insured and maintained vehicle.

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Daily Rental

A quick, flexible way of leasing vehicles for the short term. Giving access to different vehicle types when you need them.

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Personal Contract Hire

A vehicle funding option that allows employees to hire a vehicle for a fixed long-term period with maintenance, servicing and tyres included.

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Sale and Leaseback

The perfect funding option for companies that already own their fleet and wish to switch to contract hire therefore freeing up capital.

You can see the report, ‘Getting to Grips with Grey Fleet’, from the BVRLA in partnership with Energy Saving Trust on their website.

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