Case study: City of York Council
City of York Council has a fleet of more than 350 vehicles, mainly large and light commercials, and around 1,000 drivers who regularly use their own cars for work.
Geoff Derham, head of waste and fleet services, uses rental as an alternative to both pool cars and the grey fleet as he finds it much more cost effective.
He says: “Someone using their own car on a journey of, say, 100 miles would cost the council £45 in reimbursement.
A hire car will cost in the region of £18 for hire and, given the types and size we use, another £10 or so on fuel.
The savings for groups of staff travelling together, who might otherwise have used train travel, are even greater.”
Derham tries to limit the use of grey fleet.
He says: “Grey fleet is expensive and carries with it an element of risk to the council. It is also difficult, if not impossible, to limit the environmental impact of grey fleet as the vehicles used are the driver’s choice and not the council’s.
“Pool cars certainly have a vital role to play in our staff travel options, but they are at their most beneficial when being used by multiple users, doing shorter journeys, across a whole day.”
An alternative to grey fleet
When duty-of-care steps are considered – such as checking that the employee has valid business insurance, that the vehicle is roadworthy with a valid MOT certificate and road tax, and that the vehicle is suitable for the journey – it is often cheaper and easier to hire.
Paul Marchment, fleet consultant at Arval, says: “As well as being a safer option, in a great number of cases short-term rental is more cost-effective than reimbursing an employee to travel in their own vehicle.”
Another consideration is image. If a member of staff is meeting a customer, are they giving the right impression turning up in their own vehicle, which may be old and not reflective of the company’s values?
The grey fleet is often seen as an easy way of allowing employees to travel on business. As long as robust checks are in place (licence, MOT, insurance, servicing), it is a relatively burden-free way of allowing staff to drive on business – particularly if the mileages are very low.
There is a threshold below which grey fleet mlleage is more cost effective. Most companies cap it at around 100 miles, although the Environment Agency cap is 70 miles.
Above that, staff by take the cheaper option of booking a hire car.
Case study: Bauer Media
Bauer Media has a fleet of 380 company cars.
Fleet manager Debbie Floyde uses daily rental for employees who only need occasional use of a car, such as for meetings, or when awaiting delivery of a new company car.
If drivers take vehicles home there are tax implications.
“If our drivers are in a daily rental vehicle because we have not got a company car spare or while awaiting delivery of a new vehicle then they will be taxed.
"If the hire is short term (no more than a few nights) for a non-company car user then tax will not apply.
“Also if a driver is in a rental car because their vehicle is off the road they won’t pay tax as they will be paying it on their company car.”