Fleet News

Congress: Lex Autolease on using wholelife costs to select vehicles

Fleets that don’t need to use a whole life cost model when selecting vehicles need to reconsider, according to Lex Autolease.

Ben Rowland, consultant at the contract hire company, said organisations need to be aware of all the costs associated with running a vehicle, and to beware when basing entitlement on monthly rental payments.

He used an example of a petrol Vauxhall Insignia and a diesel Ford Mondeo, both of which were available at the same monthly payment, but resulted in vastly different total payments for running costs.

Delegates were advised to offer cars based on monthly whole life costs rather than leasing rates, and if restricting choice would prove problematic with staff, to allow them to choose the vehicles they want but with the employee paying the extra cost that the company might face.

He added that there was a vast range of additional costs that had to be accounted for to ensue accurate budgeting for running the fleet, pointing out the impact on employers' National Insurance contribution from allowing staff to choose higher CO2 vehicles.

Rowland said: "Reducing the CO2 of the fleet by 5g/km per vehicle can save as much as £14,000 a year across a fleet of 400 cars." He also warned of the impact of allowing staff to choose vehicles about the 160g/km threshold for capital allowances, which could run into three figured each year per car.

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