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Fuel costs and emissions head grey fleet concerns

Date: 20 April 2018   |   Author: Sean Keywood

Businesses running grey fleets should consider investing in a mileage management system to avoid drivers overclaiming for expenses.

That's according to Robert Pieczka, managing director of fuel card provider fuelGenie.

Citing reports that grey fleet drivers may be overclaiming, Pieczka said firms need to make sure management is done properly.

There are huge costs involved in grey fleet, with 12 billion miles driven every year in such vehicles, meaning employers are paying out more than £5 billion a year in mileage claims.

The British Vehicle Rental and Leasing Association (BVRLA) has said bosses should target a 50% reduction in grey fleet mileage and costs by 2020, with other issues including higher CO2 emissions.   

Pieczka said, "Having a grey fleet is most beneficial for businesses that do not have high business mileage. This is because drivers will be making fewer journeys, which, in turn, will hopefully lead to fewer risks. 

"However, for larger fleets and those who travel further distances, grey fleets can be harder to manage. To avoid employees overclaiming on mileage, SMEs should consider investing in a mileage management system. 

"Some packages can feature live tracking and driver performance self-improvement tools to reduce risks."

Pieczka said fuel claims form just one part of the overall picture.

"Employers should be entirely clued up on which employees are using their vehicles for work, and roughly how many miles they are expected to undertake throughout the year. 

"Once this is established, the proper documentation should not be overlooked. With around 40% of business owners estimated to not check whether their grey fleet drivers have correct business insurance or MOT, this can be easily avoided by carrying out the necessary checks from the outset."

Pieczka said it is also important for  responsibility for grey fleet to be assigned to an employee, who should also be responsible for creating a framework of policies and operating procedures.

He added that other options than grey fleet should be considered, but with one word of caution regarding rental vehicles.

"For those looking for an alternative to grey fleet vehicles, businesses can consider leasing, renting or even wider use of public transport. 

"However, employers must take care with hire cars. When an employee is using a hire car, rather than their own car, for business journeys, it is important that the car is booked and hired to the company, not the individual. 

"This is because, otherwise, the car will be listed under retail insurance and not business insurance."

Pieczka added that cutting down on grey fleets was a good way of reducing CO2 emissions.

This is a position the BVRLA also supports, and it has called on the government to help encourage drivers to move out of older grey fleet vehicles.

BVRLA chief executive Gerry Keaney said, "Cleaning up work-related road transport is an essential part of tackling air quality in the UK. The BVRLA believes that the tax regime is one of the most powerful tools to encourage businesses and individuals to choose low-emitting vehicles. 

"If government is serious about realising its ambitious air quality goals, it needs to fix the company car tax regime, which is not currently fit for purpose.

"We are particularly concerned that the current tax regime offers little or no incentive to opt for an ultra-low-emission vehicle and, in some cases, is encouraging people to opt for cash allowances. 

"Some will keep the cash and use their own vehicles for company purposes, contributing to the growth of the grey fleet market, which consists of much older, higher polluting vehicles."

A previous BVRLA report estimated the size of the grey fleet market as being 11.6 million cars.

It also revealed that the average grey fleet vehicle was eight years old, with average CO2 emissions of 152g/km, compared with the average rental car, which was 0.7 years old with CO2 emissions of 122g/km, and the average lease car, which was 1.6 years old with CO2 emissions of 119g/km.