The forecast takes into account the recent cuts in interest rates and the positive effect of anticipated future falls in the retail price index, upon which the Government will peg future fuel duty increases. A reduction of 1% in interest rates, Glass's says, can save some £300 on a typical company car and a 1% fall in inflation should reduce the likely rise of fuel duty by 11p a gallon over three years.
Glass's figures are based on a database of about 2,500 vehicles and their pence per mile costs over three and four years. All factors from an initial purchase discount to the future resale value are considered. Individual calculations are made for service and repair costs, relief vehicle, vehicle excise duty, funding on a full cash flow basis, typical insurance premiums and fuel using different prices for each year of the calculation.