Fleet News

Costs will rise after election, warns PHH

FLEET operating costs are set to escalate after the 1997 general election as all the major political parties look to encourage the increased use of smaller vehicles, according to PHH Vehicle Management Services.

Copies of its guide to party political thinking in relation to the fleet market called 'Politics and the Business Vehicle' have been sent to more than 600 managing directors, finance directors and fleet managers outlining plans of each party. Managing director David Knight said: 'Our research has highlighted one over-riding factor - small is beautiful. Proposed changes in company car taxation, fuel duty and vehicle excise duty all suggest that a move towards smaller, more fuel-efficient vehicles will be prudent.' At the same time PHH has urged companies to review their policies on perk cars, with Knight saying: 'Increasing costs may make only critical business vehicles economically viable.'

Fuel efficiency is the number one issue facing fleets, according to Knight, and PHH claims, assuming an average of 31.5mpg per car, a fuel pump price rise of 4.5p a gallon/1p a litre on the cost of unleaded petrol will add £22 to the annual running cost of each vehicle. At the same time PHH calculates that a one mpg improvement in fuel economy on a fleet of 100 vehicles with an average consumption of 28 mpg would result in an annual saving of £5,800 assuming a pump price of £2.64p a gallon.

For a free copy of the report contact PHH on 01793 884685.

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