Analysis of whole life costs (WLC)demonstrates that fleets should drive policy and add value by widening employee car choice, claims KeeResources.
Mark Fretwell, sales and marketing director at KeeResources, said: “The analysis we perform for clients clearly demonstrates time and again that whole life costs are not only the way forward for companies serious about saving money on their fleet costs but actually enhance the total reward package offered by widening vehicle choice to cars that would otherwise fall outside company car entitlement limits.
“Clients that adopt a WLC approach are regularly telling us that they not only save money per car on a monthly basis but are able to offer their company car drivers an improved choice of better vehicles. The enhanced choice is seen as an additional benefit of working for the employer and assists greatly with staff retention.
“As we all know, the company car is one of the most valuable, high profile and emotive employee benefits and a change to fleet policy based on WLC proves highly motivational.”
“As an illustration, a company car fleet may operate a grade based on a P11D value of £18,000 and CO2 of 135g/km, with mandatory equipment including air conditioning and Bluetooth. This grade allows a choice of 882 vehicles, with over half requiring the addition of optional equipment in order to meet the fleet policy criteria.”
“Given the natural tendency for employees to maximise the benefit of their company car, it is likely that the 100 models with P11D values between £17,000 and £18,000 would prove most popular, exposing the business to whole life costs ranging from £630 to £858 a month, with a mean average of £719.”
KeeResources claims that by changing fleet policy from being P11D-based to WLC-based the fleet can gain greater control of these costs and offer employees an improved choice.