Astronomic savings from paying actual fuel costs
SIR – After reading your article ‘New AMAPs please, Gordon’ (Fleet News, November 24), I thought that you may be interested in how my company, Pertemps, deals with the issue of approved mileage rates, both for private vehicles used for business purposes, and company cars used for business purposes.
I agree with Stewart Whyte’s proposals and am also an advocate of the company car system rather than opting out, for all the reasons stated in your article. At Pertemps, rather than reimburse approved rates for fuel (pay and reclaim), we pay for all of the fuel, then deduct the actual cost (pence per mile) from the employee’s salary for private mileage.
This is achieved by using fuel cards and importing the monthly fuel spend data into bespoke fuel management software, developed in-house by Pertemps.
Drivers enter their business mileage via the internet.
The monthly business mileage is then approved via auto email by line management, before being processed by the software, along with the fuel spend.
The resultant calculations, (by cost centre, including VAT reconciliation for business mileage) are then electronically sent to accounts and payroll departments for the data to be imported into their relative systems.
Management reports are produced by division/cost centre, showing among others:
Pertemps has been developing this system over the last five years and has used it in its current format for nearly two years.
The savings achieved by paying actual fuel cost instead of hypothetical fuel cost have been astronomical. In the middle part of 2005 our Vauxhall Astra ECO IVs were on average achieving 6ppm, yet the approved rate for this car is 9ppm. You do not have to be Einstein to work out that on a large fleet the savings can run into many tens of thousands per annum.
There are many other duty of care, health & safety and other financial benefits associated with using this system.
Due to the current hot potato of Euro VI VAT directive, and lack of effective fuel management software in the market place, Pertemps is currently looking for a partner to further develop this software, to enable it to be a marketable commodity.
Fleet manager Pertemps Recruitment
Disposal values database offers vital information
SIR – I read with great interest the letter from Mike Pilkington ‘Remarketers must set target markets in their sales sights’ (Fleet NewsNet, November 10).
I could not agree more with what he is saying, particularly in relation to fleets – be they owned fleets or contract hired – taking, as he puts it in his letter, a ‘rifle shot’ approach to remarketing specific vehicles at specific buyers.
As an example, if we look at the vehicles on the BVRLA’s Fleet Disposal Values Database and take a typical month like September where only 46% of vehicles went through open auction, with the remainder being traded or sold to drivers, the benefit gained equated to an enhanced value of 2.7% for traded vehicles and 10.2% for vehicles sold to drivers.
In an industry where we are striving to reduce costs for customers and remain ever more competitive, these benefits are too big not to be properly exploited.
To assist our industry in this process, the BVRLA has developed a database of actual disposal values giving added-value information such as route-to-market, location, colour and specification which is proving an invaluable tool in the quest to maximise the sale value of every vehicle at end of contract. If Mike Pilkington or any other pro-active remarketer should be interested in the database then please contact Nora Leggett at the BVRLA (email@example.com or 01494 545713).
Director general, British Vehicle Rental & Leasing Association
BST: have they forgotten?
SIR – Regarding your article on single/double summer time (Fleet NewsNet, November 3), people seem to have very short memories.
A similar experiment involving retaining British Summer Time throughout the winter months was tried some years ago.
It was given up because it led to an increase in deaths during the morning hours, particularly among schoolchildren. I believe it was the Royal Society for the Prevention of Accidents (RoSPA) which persuaded the then Government to drop the idea, the very organisation now campaigning for its re-instatement.
Darkness at 8am, when there are many schoolchildren making their way to school, is much more of a danger than darkness at 5pm or 6pm, a couple of hours or more after most of them have gone home.
ROGER LADBURY Managing director, Bruker BioSpin, Coventry
Solution for rental damage
SIR – Further to my original letter ‘Hire car bill left me fuming’ (Fleet NewsNet, October 27), while I have had many letters and emails supporting my position, I had one in particular from a company which comes to you and repairs this sort of damage to MVRA standards at a third of the cost I was being charged.
The vehicle would be off the road for a couple of hours at the most, not stuck in a bodyshop for days, so there would be no loss of revenue causing rentals to rise, plus keeping customers happy by not sending them extortionate bills for a repair that might not be repaired.
If vehicles were sent out in good condition and not covered in scuffs and scratches, firms might be more inclined to accept a reasonable charge for damage without complaining about the cost.
Fleet and facilities manager, BM Polyco, Enfield
ACFO plea just doesn’t make sense
SIR – Calls by ACFO to the Treasury to revise or lower HMRC Approved Mileage Allowance Payments simply don’t make any sense. Why is it doing this? Many public servants or those who would not otherwise qualify for company cars have no choice but to use public transport or their own cars.
Faced with rising fuel and insurance costs, they are finding that the 40p per mile rate is inadequate. Even MPs will be feeling the pinch, since their own generous mileage rates have recently been pegged back.
Given that many employers will wish to discourage the use of cars (of any sort) and encourage the use of public transport where viable to do so, travel allowances need to be matched to the actual cost of travelling by various means – such as bus, train, plane, taxi or car.
For this, a figure of around 52p per mile is nearer the mark than the 40p per mile that HMRC thinks it is. Treasury officials should try getting a bus for a few miles (outside major cities) to see how much public transport really costs.
There have already been instances of public servants refusing to use their own cars on their employers’ business because they weren’t being fairly reimbursed.
There is always the cost- saving option for employers of providing low cost leased cars for those employees who cover a higher business mileage (such as the example set by the NHS) but most employees will not fit this profile.
So cut back existing rates? Definitely not. Increasing rates to 52p per mile for the first 8,000 business miles with a reduction to 26p per mile after that (if really necessary) combined with renaming them travel allowances – not related to car use – would keep most people happy.
Emmerson Hill Associates, Farnham, Surrey