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The hidden costs of grey fleet

By March 19, 2019News

Grey fleet cars, defined as vehicles owned by employees that are used for business purposes, are something that most businesses tend to rely on for some of their employee travel.

But just how cost-effective are they for fleets in the long term? Here are some helpful hints and tricks that have been adapted from an earlier piece from the Eurocar Mobility Group that may prove helpful for your organisation moving forward.

Unexpected Downtime

First and foremost, there is the unexpected costs of providing a replacement vehicle or paying for transport when an employee’s own car breaks down. Plus the potential lost revenue of employees missing appointments or meetings.

Older Vehicle Risk

On average when vehicles reach eight years of age, they are at a significantly higher risk of breaking down and less reliable than newer models. It will vary per organisation, but it is overwhelmingly likely that your drivers will be driving older cars than what might be available if you purchased or leased vehicles for them instead.

Data Collection Issues

It is also hard for employers to collect data about employees’ own vehicles, leaving them in the dark as to whether a vehicle has a valid MOT, tax, insurance, when it was last serviced and if it is fully road-worthy. there’s also the additional administrative burden of keeping track of expenses with claiming business mileage.

Duty of Care

But most significant is the duty of care risk of grey fleet usage. If a driver is involved in an accident while driving a grey fleet vehicle for work the risk for the employer could be considerable. Where there is evidence of failings under the Duty of Care Act or the Corporate Manslaughter Act, employers (including senior employees) could find themselves facing prosecution which may result in hefty fines or even prison sentences.

Final word

Committing to the acquisition of vehicles is financially unrealistic for many businesses, but businesses can consider long-term rental vehicles as a genuine alternative, among other mobility solutions.

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