Is Your Business Operating Grey Fleet? What Are The Issues and Alternatives?
When it comes to fleet vehicles, it’s estimated that there are more than three times more ‘grey fleet’ vehicles than company cars in the UK*.
But what exactly is ‘grey fleet’ and what should you be considering if you operate it within your business? You might even be operating grey fleet without knowing it.
What exactly is grey fleet?
Put simply, grey fleet is any car or vehicle used for business travel that does not belong to your company. A grey fleet vehicle could include one that is purchased through an employee ownership scheme, or a vehicle that is privately financed or owned by one of your employees.
If these vehicles are then driven on company business (normally in return for fuel expense or a cash allowance), they’re then known as ‘grey fleet’ and come under your responsibility as an employer.
How can you manage grey fleet?
Grey fleet vehicles can bring benefits as a flexible and cost effective solution for employee transport. However, you need to remember that you don’t own and control the vehicles – and this can make manging them complex.
You should be aware that health and safety legislation applies to employees making work-related journeys, so it makes a lot of sense to treat grey fleet as you would with regular company cars.
How do I know if my grey fleet is safe?
Fleet managers within larger companies will likely be aware that they need to demonstrate that any grey fleet vehicles have followed relevant safety policies and have been included in any risk assessments. A detailed record of vehicle details also needs to be kept including information on servicing and MOT, insurance and tax and driving licence checks.
If you’re a small business, this can sometimes be difficult to achieve without the dedicated resource and knowledge, so considering alternatives such as short term leasing to reduce the need for grey fleet could be well worth it.
What are the alternatives?
As we’ve mentioned above, smaller companies often don’t have the time or skills required to keep on top of a grey fleet and ensure everything remains compliant.
Alternative solutions such as short term leasing mean you can access vehicles for your business as and when you need to give them to your employees and you can sleep easy in the knowledge that all your vehicles are up to date when it comes to the relevant safety and maintenance certification.
Essentially, you’re on a rolling contract and aren’t tied in to a 6, 8 or 12 month deal. This means should your circumstances change quickly or unexpectedly, you don’t have to worry about being able to get rid of the car a swapping it for something more suitable.
Costs can also be reduced, as generally (and as is the case at Cars on Demand), the vehicle you lease is never more than one year old. That means that you don’t have to factor in time and cost for repairing and maintaining older grey fleet vehicles.
But what do our customers say?
Here’s an extract from our case study with Vestey Foods on why they use short term leasing:
Why did you need the help of Cars on Demand? What are they helping you achieve?
We’re working hard to reduce costs across the business and one of the areas we identified that we could be saving on was our fleet costs. The flexibility of short term leasing means we have tighter control over the cost of the vehicles.
Will Cars on Demand’s services allow you to achieve anything that you were unable to do at all / not as well, prior to the contract with Cars on Demand?
Short term leasing will enable us to increase and decrease our fleet size depending on what we require without taking out lengthy and expensive contracts, thereby helping us to keep overall costs down.
What have been the most significant benefits for you working with Cars on Demand so far?
Despite this being a relatively new working relationship we do think the biggest benefit so far has been the flexibility of the contracts, especially because the minimum term is 28 days.
If you’d like any more advice on grey fleet or to discuss the alternatives, don’t hesitate to drop us a line.