Despite advances in technology and increasing fuel prices most organisations still have a need for business travel. While there are many possible options the majority is still undertaken in cars in the UK.
From an employee’s perspective the company car remains one of the most sought after benefits, but for an employer cars can be a financial, legal and administrative trial.
Over the last 40 years the UK fleet market has evolved into a massive and sophisticated industry that can be complex, and daunting to the uninitiated. The fact is there just isn’t a simple way to run a fleet: different methods and approaches are likely to yield very different results in different circumstances. The objective of these guides is to help the fleet decision maker to get the best overall result for their business, whilst not forgetting the importance of safety and employee aspirations.
What is fleet?
Not all organisations recognise that by running cars and/or vans, they are actually part of the overall fleet market; this means they often overlook the benefits of ‘thinking’ fleet and thereby fail to explore the best ways to ensure their fleet remains both legal and cost-effective. In simple terms for any, and all, cars used for business purposes ‘think’ fleet.
Your fleet is unique
In the UK entitlement to a company car does not always reflect the duties of the employee. And every business is different in – size, geographical spread, age and nature of the employees, products and services offered. Some employers are cost conscious and see cars as assets to be used as a tool of the trade, whereas, others view cars as a genuine means of attracting, recruiting and rewarding the very best employees.
Many of the issues addressed in this guide will relate to cars that are owned by the employee and used for their business journeys. These cars may be acquired via a complex, structured arrangement set up by the employer or a simple cash allowance paid to the employee; they may be used for just one short journey or be high mileage motorway cruisers. However, the need for sound cost management and a clear understanding of the employer’s legal obligations, regardless of who ultimately owns the vehicle, is essential.
Duty of Care
It is now absolutely clear that an employer has to include ‘driving at work’ within its overall Health & Safety policy. There are many aspects to this but the aim is to produce an effective risk assessment/risk management policy that provides a framework for ensuring that a safe working culture is in place and that it is regularly reinforced.
This duty of care is not restricted to drivers of company vehicles; employers have an obligation to protect every employee, including those who use their own vehicle for business purposes, as well as third parties, such as other drivers and pedestrians.
When procuring vehicles business users are faced with a highly complex range of options. Fleets can choose to let a leasing company manage the whole package, ask a management company to take over some certain limited tasks such as accident management, or run the whole fleet ‘in-house’.
The type of funding the business adopts will depend upon many factors, not least its attitude to financial risk, as well as its tax and cash flow position. Then other factors need to be added to the mix, such as fuel reimbursement, National Insurance and bolt on services such as accident management.
One thing is certain though; list price or vehicle rentals often have very little bearing on the total cost of running a fleet.
Understanding the language
Like any complex area, understanding the language and terminology can be difficult. In an effort to overcome this difficulty a glossary of the most commonly used fleet terms is included in Part 10 of this series of Fleet Manager’s Guides.
Getting the best advice
Volkswagen Fleet, via these guides intends to provide a general background to the options available to fleets, with pointers to best practice and clear highlighting of some of the major pitfalls. While some of these pitfalls may involve considerable cost, others will concern your drivers’ and general public safety. In case of doubt professional advice should always be sought.