BVRLA exposes full extent of grey fleet dependency
22 July 2016
Author: Daniel Puddicombe
A new report into the use of grey fleet vehicles by UK employers has accused both business and the Government of having a "blind spot" over an issue that costs more than £5.5bn per year in mileage claims and car allowance payments and which harms the environment.
According to the Getting To Grips With Grey Fleet white paper produced by the Energy Saving Trust on behalf of the British Vehicle and Rental and Leasing Association, around 12.5 billion miles are driven each year on UK roads by 14 million grey fleet users, which equates to an estimated £5.7bn in employee expense claims. The private sector accrues around 11 billion grey fleet miles each year, costing £5bn, which compares with £786m generated from 1.5 billion miles in the public sector.
"The invisible grey fleet is hiding in plain sight of Britain's bosses and is a blind spot in the Government's transport strategy," said BVRLA chief executive, Gerry Keaney. "This blind spot is wasting taxpayer money, costing businesses millions of pounds, damaging our environment and making our roads more dangerous."
The BVRLA is urging the Government to highlight alternatives to grey fleet use and is offering best-practice guidance, while also calling for mileage reimbursement changes and a benefit-in-kind tax rating reform to encourage the use of low-emission company cars by making the rates for vehicles that emit up to 120g/km of CO2 more attractive and the rates for cars emitting more than this more punitive.
"The Approved Mileage Allowance Payments system used for reimbursing grey fleet drivers is the only part of the motoring tax regime that provides no incentive to drive fewer business miles or use cleaner vehicles," added Keaney.
The report also revealed that, with an average age of 8.2 years compared with 1.6 years for leased cars, grey fleet vehicles are significantly older than leased ones, while average CO2 emissions sit at 152g/km for grey fleet and 119g/km for leased vehicles. For leased vehicles, 77% have a five-star EuroNCAP crash test score, compared with 9% of grey fleet cars.
"Switching to more modern vehicles for work purposes can lead to significant cost savings, cut vehicle emissions and improve employee safety," said Andrew Benfield, EST's group director of travel. "Bosses should introduce rigorous electronic mileage management systems to reduce 'mileage inflation' by employees claiming a mileage allowance, and remove the incentive to drive unnecessary business miles."
"The BVRLA report provides a shocking insight into the use of grey fleet - people's own vehicles - by employers across the UK," said Andrew Franklin, director of public sector at rental firm Europcar. "It is, literally, an accident waiting to happen. Yet the solutions are out there for employers - with the potential to save millions as well as contribute to reducing CO2 emissions."
Among the public sector, the EST's report found that the NHS Trust is the biggest user, recording 40% of all public sector grey fleet at 624 million miles, with another 34% - 491 million miles by local authorities. The civil service accounts for 16%, and the remaining 10% is covered by a combination of police and emergency services and further and higher education.