10 Things You Need to Know About... Grey Fleet Management
We've compiled a list of the top ten things you need to know about managing employee owned vehicles - the often neglected "grey fleet".
Is it time to tighten up your grey fleet policy? We've included some key stats on the size and volume of grey fleet which we hope will give you some insight into this increasingly popular mode of business travel. Spot the pitfalls and make simple changes to reduce your organisation's costs.
1. LEGAL OBLIGATION
An employer has a legal responsibility to ensure that any vehicles used on company business (irrespective of ownership) are safe and appropriate to use. This includes ensuring the vehicle is taxed and insured.
2. ALL IN THE DETAIL
Business use insurance is not normally included in a car insurance policy without a specific request. Whilst it is the responsibility of the driver to obtain the insurance policy, the employer should check not only the certificate of insurance, but also the policy to ensure that business miles are covered.
3. SIZE MATTERS
The size of the UK grey fleet is substantial; there are an estimated 14 million grey fleet vehicles on the roads*, yet surprisingly there is very little regulation surrounding it and the entire fleet is often overlooked.
4. GREY MILES
It is estimated that 12 billion grey fleet miles* are driven each year and under the HMRC’s Approved Mileage Allowance Payments scheme, grey fleet drivers can claim 45p per mile for the first 10,000 business miles they drive and 25p thereafter – which can quickly mount up.
5. AGEING FLEET
The average age of a grey fleet vehicle is 8.2 years old*. In comparison, the average age of a lease car is 1.6 years and a rental car 0.7 years. The grey fleet is an ageing fleet that is statistically less safe and is a high polluting form of travel.
6. COST OF THE PROBLEM
Employers are spending around £5.5 billion a year* on grey fleet highlighting the need to address the issue and find ways to reduce grey fleet costs.
7. TIME TO ENFORCE
Financial impact - grey fleet mileage reimbursement rates are normally considerably higher than alternative modes of travel and mileage claims are often at best estimated or worse, exaggerated.
8. ENVIRONMENTAL IMPACT
Grey fleet vehicles are generally older than company owned cars and are known to contribute the bulk of the road transport CO2 emissions in some organisations. Tackling grey fleet vehicles will help reduce an organisations carbon footprint and contribute towards achieving CO2 reduction targets.
9. CHANGE PERCEPTION
Consider alternatives to grey fleet business travel - telephone or video conferencing, public transport, car rental, car clubs, car leasing or fleet management. Encourage employees to think differently and not always assume that driving is the best solution.
10. MANAGE THE VEHICLES AS IF THEY ARE COMPANY OWNED
Storing and documenting vehicle data is paramount for managing a grey fleet. This includes registration details, age of vehicle as well as MOT and insurance checks. Storing this data and carrying out regular checks will help provide an audit trail and keep your fleet compliant. The first step to solving a problem is recognising the problem.