Fleet World Workshop Tools
Car Tax Calculator
CO2 Calculator
Car Comparator
Van Tax Calculator
EV Car Comparator
BiK Rates Company Car Tax

Grey fleet costing firms more than £5.5bn a year

By / 5 years ago / Latest News / 1 Comment

The British Vehicle Leasing and Rental Association (BVRLA) is urging businesses and the Government to tackle the issue of the UK’s ‘grey fleet’ as a new report shows the true cost of employees using their own cars for work purposes.

Grey fleet cars

The UK’s grey fleet comprises 14 million cars – 40% of all vehicles on the road

The ‘Getting To Grips With Grey Fleet’ report, which has been produced by the Energy Saving Trust (EST), shows that some 12 billion business miles are driven each year on Britain’s roads by employee-owned cars, costing organisations more than £5.5bn a year in mileage claims and car allowances.

The research also indicated that grey fleet vehicles account for a significant portion of the £2.7bn costs associated with work-related road accidents.

In total, the UK’s grey fleet comprises 14 million cars – 40% of all vehicles on the road.

In the private sector, the grey fleet costs almost £5bn and covers 11 billion miles, emitting 3.2m tonnes of CO2 and 7,038 tonnes of NOx. In the public sector, use of grey fleet vehicles costs £786m per year with the bulk of the 1.5bn miles driven by employees of the NHS, local authorities and civil service. These vehicles emit 447,000 tonnes of CO2 and 1,118 tonnes of NOx.

Using government figures and data from real-life fleets, EST researchers found that the average grey fleet car was older, more polluting and potentially more dangerous than its counterparts.

Grey fleet vehicles had an average age of 8.2 years. They produce 8,156 tonnes of NOx, which is equivalent to twice the emissions from Transport for London buses.

In response, BVRLA chief executive Gerry Keaney has called on the government to tackle these issues in its transport strategy.

Keaney commented: “The Approved Mileage Allowance Payments (AMAP) system used for reimbursing grey fleet drivers is the only part of the motoring tax regime that provides no incentive to drive fewer business miles or use cleaner vehicles. This blind spot is wasting taxpayer money, costing businesses millions of pounds, damaging our environment and making our roads more dangerous.”

The BVRLA is calling for a 50% reduction in grey fleet mileage and costs by 2020, and is urging government ministers to help by highlighting the alternatives to grey fleet use and offering best practice guidance, particularly for public sector organisations.

The EST added that fleets 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.”

Both organisations have recommended that employers should mandate car rental for any work-related vehicle journey over 55 miles, and employees driving more than 10,000 miles a year should lease a company car.

Other recommendations in the report include using car clubs, videoconferencing and encouraging employers to incentivise alternatives to driving such as public transport, cycling and walking.

For more of the latest industry news, click here.

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.