Companies are wasting millions each year and damaging the environment by paying employees to use ageing, inefficient personal cars for business use, according to new research.
The collaborative report from the Energy Saving Trust (EST) and the British Vehicle Rental and Leasing Association (BVRLA) shows that the UK’s so-called ‘grey fleet’ of employee-owned vehicles used for business is far older, more polluting and less efficient than alternative solutions such as car clubs or leasing.
The research is the first time the scale and nature of the UK’s grey fleet has been quantified.
Ageing and inefficient
According to the report, the UK’s 14 million grey fleet vehicles tend to be some of the oldest and least safe vehicles on the road, averaging 8.2 years old.
The annual nitrous oxide emissions from these vehicles – one of the biggest contributors to local air pollution – are twice those of London’s bus fleet.
Meanwhile, mileage claims and allowances are costing businesses more than £5.5 billion a year and failing to incentivise employees to drive fewer business miles or use cleaner vehicles.
Part of the problem is that business travel in private vehicles is not managed effectively, the report states.
Using electronic mileage management to monitor travel and accurately measure mileage to prevent inflated fuel allowance claims is one recommended measure.
For businesses with high mileage rates, leasing company cars or using car clubs can be more cost effective than paying for employees to use their own cars. It is also far better for the environment due to the continual improvement in fuel efficiency and emissions from rental fleets.
The report estimates that cutting grey fleet mileage by just 15 per cent would be equivalent to taking 225,000 cars off the road in pollution terms.
Andrew Benfield, group director of transport at EST, said: “Switching to more modern vehicles for work purposes can lead to significant cost savings, cut vehicle emissions and improve employee safety.
“Bosses should introduce rigorous electronic mileage management systems to reduce 'mileage inflation' by employees claiming a mileage allowance, and remove the incentive to drive unnecessary business miles.”
There are a number of case studies in the report demonstrating how organisations from both private and public sector are tackling their grey fleet, plus an overview of best practice guidance.
It recommends in particular that car rental should be used for any journey over 55 miles, and that businesses should lease a company car for any employees driving more than 10,000 miles a year.
To read the full report, click here.