Construction firm to save more than £100k by switching to WLC policy
Family-owned Osborne, which has a combined car and light commercial fleet of some 500 vehicles, turned to Activa Contracts to provide a root and branch review of its company car policy with the simultaneous aim of making it more attractive to employees to boost staff recruitment and retention while not increasing business costs.
Activa Contracts has to date supplied 180 cars and is managing out the remaining legacy fleet of 30 vehicles owned by Osborne’s previous sole lease supplier until they are replaced with its own cars. In addition, although a different leasing company is supplying the company’s almost 300-strong light commercial vehicle fleet, Activa Contracts has been chosen to deliver 36 vans on a four-year/80,000-mile replacement cycle for a specific construction contract.
Osborne’s previous company car policy was based on effective rental costs – lease rates inclusive of service maintenance and repair (SMR). Activa Contracts advocates that all fleets use whole-life costs as the basis for their vehicle policies as that provides the most accurate and transparent real-world price of corporate motoring.
Osborne fleet manager Jacquie McDermott said: “The result of the analysis was astonishing in terms of the breadth of company car choice we were able to provide employees and the financial savings to the company.”
To enhance the company car policy even further Osborne decided to increase the cost base of its previous effective rental policy by 5% to widen vehicle choice when introducing whole-life cost calculations.
Ntwithstanding the 5% uplift, Osborne is now saving £2,303 per month across the 180 models introduced to the fleet by Activa Contracts to date. That equates to a saving of £27,636 a year and £110,544 over the vehicles’ four-year replacement cycle.
Furthermore, employees now have a choice of company cars across 10 manufacturers – Audi, BMW, Fiat, Ford, Kia, Mercedes-Benz, Skoda, Vauxhall, Volkswagen and Volvo.
Additionally, the whole life cost focus has helped Osborne reduce its carbon footprint and, critically, employees are achieving company car benefit-in-kind tax savings.
Activa Contracts’ managing director Ian Hill said: “All fleets should use whole-life costs as the basis for their fleet policies. We are witnessing a growing awareness of whole life costs among fleet decision-makers, but many organisations still use other criteria for vehicle selection.”