What is wholelife costs
Wholelife costs is the term used to refer to the total cost of ownership over the life of a fleet vehicle. When reviewing fleet car or fleet van wholelife costs, there are a number of elements that should be considered to make an accurate calculation of the vehicles wholelife cost.
The P11D is the taxable retail price of the vehicle. The overall retail price of a vehicle is inclusive of number plates and service checks that are not eligible for tax, the P11D is the term given to the price of the overall vehicle with Tax.
The Purchase Price
The overall cost of buying your fleet including any discounts manufacturers may apply.
There are a variety of different aspects to fleet tax to consider, from the outright tax charged on the price of the vehicle, road tax, co2 emissions, VAT recovery, corporation tax and more.
With focus leaning more towards the impact vehicles have on the environment and new stricter tax implications, finding vehicles with low co2 emissions is an important considering when evaluating wholelife costs of the fleet.
Depreciation is the rate at which the vehicle will lose value over a period of time. Once a new vehicle is driven off the forecourt it immediately begins to lose value, it is important to select vehicles that will decrease in value at a slower rate when it comes to the end of the cycle and the company wishes to resale.
The residual value is the value of the vehicle once it has completed its term. The slower rate of depreciation the higher this figure is likely to be.
Fuel consumption is an important consideration when looking at the wholelife costs of the fleet vehicle, fleets can spend millions of pounds each year on fuel, effectively a couple extra miles to the gallon can result in a substantial savings.
Other wholelife costs worth considering include NI contribution, Insurance and service, maintenance & repair costs.
The wholelife costs of running and owning fleet vehicles can cost companies millions upon millions of pounds each year so it goes without saying that planning is crucial to minimise the financial impact this could have on the company. By evaluating wholelife costs fleets can get more of a detailed picture of overall costs, decrease co2 emissions, more stringent control of spending and help when selecting the appropriate fleet vehicles.