Fleet News

Cost is top concern for fleet managers

Despite the imminent arrival of the Corporate Manslaughter Act and increasing pressure to go green, it is cost management that remains the most significant burden on fleet managers’ shoulders heading into the New Year.

However, while 32% of respondents to the National Car Rental/Fleet News survey said managing costs remains their top concern, this was closely followed by risk management (30%) and sourcing more environmentally-friendly transport solutions (16%).

Lorraine Farnon, National UK sales director, explained: “Managing costs is, and remains, a key consideration, while new legislation is forcing risk management to the top of the agenda.”

Managers operating fleets of purchased vehicles have the additional concern of falling residual values to add to their worries.

Interim data from BCA shows average monthly fleet and lease values reached an 11-month low last month.

Values fell to £6,714 in November, the lowest average monthly value recorded since December 2006. Performance against CAP Clean also fell to 94.2% – its lowest level for 22 months.

It is little surprise then that cost issues head the fleet managers’ agenda, but, as Julie Jenner, ACFO chairman, explained, they must also concentrate on other areas, including tax and environmental pressures.

“The taxation and environmental issues are really bound together because the UK government has led the world in putting CO2 factors into just about every aspect of fleet taxation,” she said.

“Many fleet operators have already adopted significantly green policies and, while there is more that could be done here, the vehicles used by fleets must still be fit for purpose.

“In some cases that really needs bigger, and ultimately higher-emitting, models.”

However, she said the Government should be praised for its plans to introduce a 10% tax band for company cars with CO2 emissions of 120g/km or less in April 2008.

But she added that ACFO believes the Government must provide more ‘carrots’ to encourage low-emission motoring.

The Government also needs to state its intentions for revising the AMAP system, said Ms Jenner.

“We still want the Government to place virtually all of the environmental aspects of taxation on the vehicles themselves, so that any model that emits high levels of CO2 will be taxed simply on that basis – not on whether it’s owned by a company or a private motorist.”

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