New survey exposes the cost of 'grey' fleet drivers.

19 May 2010

Almost one-third of companies (31%) allow employees to drive more than 7,000 miles a year on business in their own vehicles - the so-called ‘grey’ fleet - with the average employee being paid almost £3,500 a year in mileage reimbursement costs.

The extent to which ‘grey’ fleet vehicles are being used as an alternative to company cars has been revealed in a major industry survey carried out by Sewells, sister company of industry publication Fleet News, in association with the Energy Saving Trust.

The research also revealed that 24% of ‘grey’ fleet vehicles cover more than 10,000 miles a year on business-related travel.

Many companies surveyed were unable to confirm the size of their ‘grey’ fleet or the mileage vehicles covered - often because this information is handled by other departments.

However, across a sample of 197 companies covering every sector of business, Sewells’ researchers established that these companies ran a total of 59,000 ‘grey’ fleet vehicles.

While mileage varied from below 1,000 business miles a year to more than 20,000, the industry average was 8,670, which, using Approved Mileage Allowance Payment (AMAP) rates, would cost employers £3,468 per year per vehicle.

Few companies hold a complete record of their direct spending on drivers covering business mileage in private vehicles.

However, the survey has put the hidden costs of running ‘grey’ fleet vehicles into perspective. Just among the survey sample, the potential mileage reclaims could potentially reach more than £200 million a year.

The high costs involved in ‘grey’ fleet have been recognised most by the public sector, with research estimating that business mileage in private vehicles makes up around 57% of total road mileage in the sector. Across the whole sector, this could add up to as much as 1.4 billion miles every year.

To help companies assess the potential savings available, the Office of Government Commerce has published a business case for reviewing ‘grey’ fleet in favour of other transport options, ranging from lease and rental cars to public transport.