Fleet News

Company car mileage falls

Improved journey management is helping to cut company car mileage, while figures suggest the recession-induced move to extend replacement cycles is slowing or even reversing.

Data from the Department for Transport’s National Travel Survey, along with statistics exclusively obtained by Fleet News from vehicle leasing and remarketing companies, reveals a changing pattern in company car mileage.

High fuel prices, a growing corporate social responsibility agenda, the increased use of public transport and the use of technology are all playing their part.

For example, the Environment Agency runs 3,442 job-need cars and has reduced its defleet mileage over the past six years from 78-80,000 miles to 62,000 miles. This has been down to using the company car as a last resort and because employee private mileage has fallen due to recent fuel price hikes.

Dale Eynon, the Environment Agency’s head of fleet operations, said: “We have built a travel hierarchy where the driver looks at whether they can use telephone conference or live meetings using web technology first.

“Public transport is the driver’s second consideration and only if all of the above aren’t suitable are they encouraged to use their company car.”

Commuting mileage rises by more than 20%

The DfT survey reveals that from 2002-2012, average company car mileage reduced 4.4% from 20,300 to 19,400 miles. The average annual business mileage reduced by 12.7% from 8,700 to 7,600 miles, while commuting mileage in company cars increased by 20.3% from 5,900 to 7,100 miles.

Andrew Hogsden, senior manager at Lex Autolease, said: “Businesses have had to wrestle with the impact of the economic downturn and soaring fuel prices, which have risen by more than 50% since 2007. 

“Faced with these difficult circumstances it’s understandable that fleets have taken proactive steps to reduce mileage and running costs.”

Commenting on the survey’s reported average 1,200 miles a year rise in average commuting mileage in company-provided vehicles, Hogsden said it highlighted the pressures that existed in the job market and how the economic downturn had resulted in workers travelling far and wide to find the right job opportunity. 

Lex’s own data reveals that average annual mileage for defleeted cars reduced from 20,432 in 2011 to 19,371 in 2013, but vehicle age has increased from 37 months to 41 months.

At Hitachi Capital Car Solutions, average annual mileage for defleeted cars in the 12 months to April 2013 was 19,308 on vehicles averaging 40 months but, in the four months since then, average annual mileage has reduced to 18,156 on cars averaging 38 months.

Looking at new Hitachi contracts underwritten in September 2012, the average term was 39 months/61,986 miles (average annual mileage 19,072). Those figures compare with 34 months/50,703 miles (average annual mileage 17,895) on contracts written in September this year.

Tim Bowden, Hitachi’s head of operations, said the current trend supported the survey. He added: “In our experience, fleets are looking at greater journey planning and efficiencies to maximise utilisation of the car and driver and drive down fuel use where possible.”

Mileage falls since beginning of 2012

BCA says that average mileage for ex-company cars has been declining since the beginning of 2012. Having increased from the start of 2010 to reach a peak of almost 50,000 miles in Q3 2011, it has now fallen to 45,000 in Q2 2013.

Meanwhile, Manheim reports average annual company car mileage is also declining - down 18% to 14,011 this year from 17,035 in 2004 at a time when many organisations have extended their fleet lifecycles from 42 to 51 months on average (21%).

Nigel Fletcher, group development director for Manheim, said: “Company car mileage has been affected by two trends; economics and technology.

“What’s more, with the increasing cost of running a vehicle and improvements within online technology to hold virtual meetings, we would naturally expect the number of business miles to fall.

“However, as people have to commute further in a competitive jobs market, they will naturally face increased private mileage.”

But, he said: “The fall in average mileage has not had a material effect on the total end of life mileage of vehicles at disposal, because we have seen a 21% increase in the age of vehicles over the past decade.

“This means that vehicles disposed of today have very similar mileages to those of 2004.”
 

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