Six out of 10 companies have no grey fleet policies - what should your business do?

Company Fleet 

New research has revealed that there is no “grey fleet” policy in place for more than six out of 10 UK companies. The 2023 Arval Observatory Barometer, a yearly state of fleet report carried out by one of our funding panel, shows that 62% of firms have no policy covering business use of employee-owned vehicles.

The survey also shows that just 16% believe they have a “comprehensive” grey fleet policy, So what should businesses be considering to ensure employers and employees are protected?

What does “grey fleet” cover?

Put simply, grey fleet vehicles are those owned by employees, but used for business use. It’s a relatively common policy, particularly for SMEs, but it brings with it some challenges.

Company cars are subject to the business checking that the vehicle is insured for drivers, that drivers have regular licence checks, and that vehicles are properly maintained and roadworthy.

These aspects of duty of care should also be in place for grey fleet cars, even though they are not owned by the company. But they can easily slip, be carried out too infrequently, or perhaps not at all. Proper checks, regularly carried out, should be put in place and recorded to make a company’s grey fleet use as risk-free as possible to comply with Duty of Care obligations.

What can be done to minimise grey fleet numbers?

The traditional answer is to provide company cars, bringing vehicles into the control of the company or fleet operator. It’s an approach that brings with it increased costs (compared with grey fleet use), but also covers the business should any issues come about. Things have moved on in the past few years however, and there is no one answer to this question.

A rapidly growing market is salary sacrifice, with employees able to get a new electric car at reduced cost thanks to tax savings for employer and employee. The scheme includes servicing and maintenance and insurance, helping tick off a range of potential grey fleet issues. “As well as offering a benefit for new and existing employees, and contributing to a company’s Environmental, Social and Governance (ESG) agenda, salary sacrifice can help smooth fleet operations,” said Rob Marshall, Gateway2Lease Operations Director.

“Gateway2Lease can help support your business in providing an EV salary sacrifice scheme through our partnership with The Electric Car Scheme. There is no net cost to the business, and employees can save between 30% and 60% on the cost of leasing an electric car personally, by paying from pre-tax salary.”

Other ways to avoid grey fleet use include rental vehicles. By providing a rented car, the maintenance, licence, and insurance aspects of vehicle use are covered by a third party - in this case the rental company.

Also checked off are pre-driving safety checks, and all other paperwork required to satisfy fleet requirements, and rented vehicles can be booked out for a variety of time frames. The same is true for subscription vehicles, though these tend to provide better value for longer time frames, and will only really work best in a brief window between rental vehicles offering best value in short term loans, and needing a car for long enough that it’s cheaper and simpler to bring a car onto a company fleet.

Finally, evaluate your company car policy. Drivers are often in company cars that don’t really need them, while other drivers need a company vehicle but don’t have one. Reassigning vehicles, or monitoring travel patterns could help give best value for company cars.

If you want to talk through these issues raised, contact our fleet specialists at Gateway2Lease on 01299 407 360.

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