Some businesses are wasting tens of thousands of pounds agreeing to unrealistic mileages when selecting fleet vehicles.
That’s the conclusion of FleetCheck, the software specialist who work behind the scenes analyzing business use and who say that predicting future mileage when writing new company car leases is going to be a key question for fleets as post-pandemic travel patterns start to emerge, says FleetCheck.
Peter Golding, managing director at the fleet software specialist, explained that fleets generally believed company car mileage would remain lower than at pre-coronavirus levels but were unsure about how much.
“Most company cars have covered a fraction of their usual mileage in the last 12 months because of the pandemic and, with the growth of videoconferencing as an alternative, it’s generally thought that the majority will not return to the kind of distances seen in the past.
“Very few organisations are talking about getting rid of their fleets altogether because they recognise the contribution that they make to their business – while fewer trips might be made, those that are still being made remain essential or important.
“However, there are questions to be answered and the biggest of these is based around ‘right-mileaging’ – ensuring that employers take out leases that match future usage. Obviously, the difference between a 20,000 mile a year lease and a 12,000 mile one is substantial, especially extrapolated across a whole business, so it is important to get this right.”
Peter said that FleetCheck was recommending to its user base that it took a proactive approach to this situation.
“Our view is that businesses shouldn’t wait to see what develops because the outcomes are likely to be haphazard, with some drivers choosing to return to their old mileage levels and others being more considered.
“We’d like to see fleets introduce guidance around when journeys should be undertaken instead of leaving things up to employees. Certainly, it doesn’t seem unreasonable to suggest, for example, that monthly client meetings should not all take place face-to-face and should instead use a combination of video conferencing and in-person meetings.
ON leasing.com a BMW 320i rented on 1+48 months contract at 12K, their best price is £385 a month while at 20K, it is £432 a month, nearly £50 a month difference and almost £2,400 over the contract term.
On top of the leasing costs you’d add fuel of approximately £1,200, so that’s a combined £3,600 more over the term, and subject to any additional costs not covered in a lease agreement.
“We expect to see more discussion about this in the coming months and certainly we’re helping some of our clients with their right-mileaging requirements, looking at how they should manage drivers and business needs.”