Leasing providers can boost their
revenues by helping clients reduce the cost of ‘grey fleets’, while
also mitigating legal and environmental risks, according to
experts.
A grey fleet vehicle is one that is
employee-owned and is used for work-related journeys. The grey
fleet in the UK – estimated to range from onem to threem drivers –
has potential legal risks for companies.
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This is because employers who pay
staff extra for the cost of buying, running and insuring their own
cars for business use have a ‘duty of care’ to employees.
Employers could therefore face
legal action, or even criminal prosecution, if an employee using
their own private car is involved in an accident and the vehicle
has not been properly maintained, of if the driver does not have an
up-to-date driving licence.
In the public sector alone, nearly
57% of work-related mileage is made by employees in privately-owned
vehicles, according to the UK’s Office of Government Commerce.
Grey fleets can also be more
expensive than company cars and can cause more pollution, unless
they are managed carefully.
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By GlobalDataAccording to the Energy Saving
Trust, the average privately-owned car used for business purposes
is seven years old, while the average car in a company fleet is
just two years-old and therefore usually fitted with more
environmentally-friendly technology.
Arval, a contract hire and
fuel-management company, helps clients review their grey car fleet
by putting drivers into four categories: infrequent driver, low
mileage; infrequent, high mileage; frequent, low mileage; and
frequent, high mileage.
The company calculates the value of
each driver to the company based on the cost of running the car,
the ‘duty of care’ risk the driver poses, and the environmental
impact of the journeys.
“We identify which are the
cost-effective options for business use of cars,” said Mike Waters,
director of market insight at Arval. “For example, an employee who
uses their own car for business use infrequently but has a high
mileage is probably better off getting into a rental car, which is
insured, new and is properly maintained. Also, it probably costs
less to run in terms of the mileage allowance payment rate to the
employee.”
The savings employers can make by
reviewing their grey fleet vary according to the number of vehicles
and drivers’ mileage, but can be as much as £1m (€1.1m), Waters
said.
Phil Peace, director of sales at Hitachi Capital Vehicle
Solutions, said he works in partnership with his customers –
providing them, for example, with clauses to insert into their
policies to mitigate duty of care risk for grey fleet drivers.
