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Grey fleet challenges at ‘epidemic proportions’ as more drivers opt out

Fleets are leaving themselves exposed to Duty of Care risks as more drivers opt out of company cars and into grey fleet vehicles.

Steve Pinchen, sales director at Licence Bureau

That’s the warning from Licence Bureau, which says that grey fleet challenges for UK companies have reached “epidemic proportions” and they’re getting worse rather than better.

Hit by rising tax costs that have been exacerbated by the shift to WLTP, drivers are increasingly opting out of company cars. Latest quarterly leasing figures from the BVRLA show that in Q3 2018, business car leasing fell 7.2% while personal contracts continued to rise with a 19% increase, furthering a trend seen since 2016.

This is backed up by the last set of Benefit in Kind statistics from the Government, which show 940,000 drivers paid BiK on a car in 2016/17 – a decline of 20,000 drivers compared to the previous year.

There’s now an estimated 13 million grey fleet users already in existence and according to reports, it’s a trend set to continue this year. Honda alone has said it’s refocusing its fleet efforts to work more closely with fleet-end users as it predicts rising grey fleet and opt-out sales for 2019.

However, there have been continued warnings about the ramifications of drivers dropping out of conventional company car schemes, including costs implications and road risk management issues, and now Licence Bureau has expressed concerns about companies’ inability to adhere to their Duty of Care obligations when employees use their cars on company business.

“The first questions we ask fleets is how many company cars and grey fleet drivers they have. The majority cannot answer the latter part of the question, so we know many companies’ Duty of Care is out of control,” explained Steve Pinchen, sales director at Licence Bureau.

“Generally, it’s not because the companies are complacent, but because the grey fleet part of their business is changing at such a pace, many don’t know where to start to control it on a daily basis to keep compliance at 100%,” he added.

“It is a huge area which continues to grow. We already know that of the estimated 14 million vehicles in business use across the UK, only around one million are company cars and this is forecast to reduce by a further 11% over the coming 12 months.

“What this means is there are a huge amount of grey fleet vehicles in circulation and organisations need to be aware of how this impacts their employee duty of care. It’s a very real situation and there are not many businesses in the country that do not have a grey fleet of some description,” said Pinchen.

He also outlined the firm’s advice for firms looking to take charge of their grey fleet duty of care.

“The situation might initially seem daunting but by taking a step-by-step approach, employers can soon transform their standing and ensure they are on the right side of the compliance line,” he commented.

“We are actively encouraging and working in partnership with organisations to initiate employee audits, as the first phase, in order to gauge the scale of the challenge they face. This audit process needs to be all encompassing and cover of all areas related to Duty of Care exposure such as driving licence details, insurance documentation, vehicle details and current vehicle road licence status.

“Knowing this, and other basic information, is the very first step in regaining control of any lapses in grey fleet compliance. All this information needs to be documented and securely stored – something that can be simply achieved via our award-winning, Compliance Managed Service portal.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.