Analysing whole-life costs on vehicle defleet is ‘vital’, finds FIAG Winter Workshop
So said delegates at the recent FIAG Winter Workshop entitled ‘Will Tax Kill the Company Car – What’s in Store for 2016’.
Attendees outlined that ascertaining the true value of a company car is virtually impossible because there is no correlation in the cost of a vehicle to an employer and that of an employee.
Kevin Basnett, managing partner at Wiltshire-based Goughs Solicitors, said: “The motivation for an employer to provide company cars may be to enable staff to move from one location to another or to recruit and retain employees, while for employees there is a financial cost and an emotional element.”
Although whole-life cost figures are widely acknowledged as best practice in terms of being the starting point for compiling company car choice lists, it was suggested they were only part of the decision-making process.
Basnett added: “It is important to take note of employees’ views in deciding which vehicles to put on the fleet, particularly if a job-need car. Vehicles must be fit for purpose and drivers have practical experience of what they require to do their job.
“When introducing a policy it is important to be aware of the impact it will have on drivers so consultation with staff is key. In too many companies there is a lack of joined up thinking across finance, HR, procurement and transport departments. The board of directors needs to lead because otherwise there can be conflicts.”
And it was also suggested that it was vital to analyse whole life cost figures on vehicle defleet and not just when deciding which company cars to introduce to a fleet.
Graham Bellman, director of fleet services, Travis Perkins and a founder of FIAG, said: “Whole-life costs are an indicator of likely expense, but fleet managers should also reflect back on what the data is telling them. History can be an important indicator of the future and actual service, maintenance and repair costs, remarketing and end-of-lease costs are big influencers in calculating the true cost of a company car.”
Delegates also suggested that it was important to regularly review company car choice lists with some fleet decision-makers undertaking quarterly checks to ensure policies reflected the very latest manufacturer model changes as well as legislation amendments.