Category: Fleet News

Leasing or buying a car for business use can be a great option with many benefits, but the list of things to consider can seem long and complicated. Ultimately, a company car has the potential to be a useful tool for both employer and employee, but there are some crucial assessments fleet operators and managers should look to make before deciding how company cars are acquired and distributed.

What is a company car?

A company car is a vehicle owned or leased by a business and used by an employee for business use, and possibly also personal travel. For a company car to be justified, the employee is likely to be required to drive a notable amount for the role, or alternatively it might be offered as a perk or part of company branding.

Things to consider for company car buying and leasing

If you are offering your employees company cars, whether for the sake of practicality or as a useful workplace perk, there are important things to consider. Different factors will guide the choices you make through the process of company car acquisition, including the following.

1. Decide whether you are buying or leasing

The first thing you need to decide is whether you will be purchasing the company vehicles or leasing them. This decision will be guided by your business’ financial situation as well as other considerations such as business size and the nature of the work.

• Leasing a company car can be beneficial because it can eliminate any upfront costs, offer affordable payment schemes that only apply to a period of usage, and can avoid the expenses related to ageing vehicles.
• Buying a company car, on the other hand, offers the potential benefits of having no ongoing payment when bought outright, no mileage limit, and the freedom to sell the vehicle at any time.

Each means of acquiring company cars has its benefits and drawbacks. The decision about which is the best fit for your business should be carefully considered to ensure you have the right set up for your fleet and business finances – and having a serious conversion with your senior management team about whether your vehicle portfolio is fit for purpose could be a good starting point for the 2023-24 financial year.

2. Consider the usage of your company cars

Understanding what type of use your company cars are going to get is vital to gauging whether investing in company cars is a good idea for your business in the long-term. It’s also key to determining the type of insurance you will need on the company cars you acquire – which is an important operational cost to consider.

For SMEs considering company cars for the benefit of work-based commuting, visits, and deliveries, company cars can seem like an big investment – but the payoff of being able to claim a vehicle as a company expense could bring about serious savings moving forward.

3. Choosing the right company cars for your fleet

Deciding what type of car/s to purchase or lease is a huge part of the company car acquisition process. There are many factors to consider when ensuring that your fleet portfolio matches the everyday needs of your business, including:

• Petrol, diesel, hybrid, or EV models.
• Budgets.
• Emissions and tax.
• Safety and comfort features.
• Mileage and efficiency.

Whether you are acquiring cars for your business or are compiling a list of company approved cars for your employees to choose from, it’s important you know which vehicles are appropriate and capable of fulfilling journeys effectively. Here are some noteworthy distinctions to help you decide on the future of your fleet.

Electric company cars

Choosing the type of vehicles is a pivotal moment for a business, particularly if you choose to begin building an electric fleet. Making the move to electric vehicles is a great idea, both for cutting down emissions and for building up a reputation as a forward thinking and environmentally considerate business, something that will pay off moving into a more sustainably focused future. However, if you are deciding to bring electric cars onboard, you will need to be prepared to accommodate them with the necessary infrastructure to support them.

Purchasing used cars

If you are looking to purchase used vehicles for your company cars, there are savings to be made but also important things to consider. If this is the route you decide to take when acquiring your company cars, ensure that any cars you are considering have been checked by a reputable mechanic. Also consider the aforementioned factors, namely the emissions and engine type of the vehicle, to ensure that you are getting the best vehicle for your needs and money.

4. Fuel economy as a priority

If you are looking to cut the tax payments wherever possible, then opting for low and zero emission vehicles can help keep the money in the bank. The current tax system means that the higher the amount of emissions a vehicle produces, the higher the vehicle exercise duty (VED) you will need to pay. This means that it pays to opt for less polluting vehicles, such as hybrid and electric vehicles.

You can also currently claim 100% first year allowances on newly purchase electric cars as well as charging point equipment.

Reputation is an important consideration for many business ventures, and your company car fleet is no different. Not only are electric and hybrid vehicles better for the environment, but demonstrating to your clients and customers that you are invested in sustainability could pay off when it comes to brand reputation and environmental credentials.

To improve your fleet’s fuel economy, a route optimisation tool like My Transport Planner can help you to make your route planning and fuel consumption as efficient as possible.

5. Create a long-term cashflow forecast

As with any investment, it’s important to consider all the costs involved in real terms. For example, consider loans required to purchase vehicles and the interest you will be paying on them, how much money will need to be spent on maintenance and fuel costs, and any associated costs if you lease the vehicles.

Comparing this data with the usage of the vehicle and the benefit it will serve the business will give you a clearer understanding of whether it is a worthwhile business endeavour. This practise will also mean you can anticipate any costs ahead of time, which could put you in a better position to handle any cash-flow complications should they arise.

For the management of maintenance and servicing costs, software tools like MyService.Expert can help you to manage maintenance schedules and unlock a range of pre-negotiated competitive rates to help you save money on admin, maintenance, servicing and repairs.

6. Ensure your employees understand their relationship with their company car

From the difference between a company car and a car allowance to whom the tax responsibility falls upon, its important your employees understand the arrangement and their responsibilities.

A company car is a car that is leased or owned by the company that the employee can use for both work and personal travel if agreed upon. On the other hand, car allowance is a sum of money that is added to an employee’s wage to assist them with the purchase or leasing of a car in their own name.

For some companies, car allowance might be a more suitable choice as it reduces the amount of costs the company is responsible for, however there is still a legal responsibility on the company to ensure the car is ensured and MOT tested.

Company cars are a benefit in kind, and as such have different tax responsibilities for the employer and employee. You can learn more about this in our company car tax guide.

It’s important you and your employee are on the same page about the car agreement you are using and what the tax expectations are, as well as who holds responsibility for the vehicle’s maintenance and servicing.

7. Invest in telematics and other management programmes

The right combination of telematics and other fleet management software can ensure that whatever your choice of company cars and however many vehicles you add to your fleet, your fleet is operating safely and efficiently.

Telematics like Tele-Gence offer flexible and customisable fleet tracking to help you ensure that your drivers are operating safely, track vehicle location, record journeys and more. Telematics can be integrated with cameras and asset trackers to create a fleet management system that keeps you in control of your company cars.

There’s a great range of other fleet management tech that can help you to keep on top of important tasks like the servicing and maintenance of your company vehicles, and prioritise driver safety. You can browse our range of fleet management tools and software here.

Fuelling your company car fleet with Fuel Card Services

Acquisition of your fleet of company cars can be a complex process with much to consider. Once you have built your fleet, make sure you keep refuelling it simple and cost-effective. Fuel Card Services offer a range of fuel cards and EV charge cards designed to make the administration of refuelling your fleet simple and keep costs low.

With many benefits you can tap into, get in touch today to learn more about which fuel card or charge card is right for your fleet.

This is the first in a series of articles written with our partners at FleetCheck to help business owners and managers understand their legal requirements around managing staff that drive for work.

Employers have various legal obligations to fulfil in order to ensure that any employees who drive for work do so safely and in a safe vehicle. It comes under health and safety at work legislation in the same way that we need to ensure staff are safe when working in an office, a factory, a warehouse or on a construction site. A vehicle used for a business journey is considered in law to be an extension of the workplace so exactly the same laws apply. Simply taking a copy of their driving licence and letting them take to the road really couldn’t be further from what is legally required or acceptable.

According to the Department for Transport, there are around 40,000 injury collisions each year involving someone who was driving for work. We know this is probably much higher as it isn’t always recorded whether a driver was at work or not. Further, there are many, many more incidents that just involve damage to vehicles or property. It’s just sheer luck that many of those weren’t worse, but the disruption and costs caused can still be significant.

There are many contributing factors to road crashes including excessive speeding, mobile phone distraction, impairment through drink or drugs, and poorly maintained vehicles. If one of your drivers were involved in a serious crash, your business would be expected to show it made every reasonable effort to identify and minimise any risks or unsafe practices.

And herein lies the main point. It isn’t sufficient just to do these things. You must be able to show documented evidence that you did these things, and that you’re continuing to monitor them.

Here are six things you would need to prove you had managed correctly.

1. Driver checks

Maintaining an accurate record for each driver is essential. Government guidance says driver licence checks need to be carried out when starting a job and then periodically thereafter. This means at least annually, and industry good practice is often more frequently. This will confirm personal details, penalty points, any reportable medical conditions as well as verifying entitlement to drive different classes of vehicle. A driver record should also include collision history and training records.

2. Fitness to drive

This covers driver fatigue and tiredness, impairment from drink or drugs, and driver wellbeing. 1 in 5 of all crashes are fatigue related – some caused by the driver being overworked and not taking appropriate breaks, others caused by medical conditions such as sleep apnoea, and still others caused by personal circumstances such as a new baby in the house or stress from financial worries. Many Police forces across the country have for some time been reporting that drug driving offences now outweigh drink driving by some margin, with a very high proportion of those being commercial vehicle drivers.

3. Vehicle checks

The driver is responsible for ensuring the vehicle they’re driving is roadworthy, and they could receive penalty points and a fine if it’s not, but you also have a responsibility to ensure they know how to check the vehicle, how to report any faults, and to ensure that any faults are rectified quickly. Any safety-critical faults such as a worn tyre, broken light or a cracked windscreen must be fixed before the vehicle is next used.

4. Driver competency

Many car drivers, especially inexperienced ones, may lack the confidence to drive a van safely due to its size and restricted visibility, so training may well be essential to ensure they can do so. But, it’s not just driving – think about what else you ask them to do. Do they do a lot of manoeuvring in tight spaces? Do they need training on safe loading or load limits so their vehicle isn’t overladen? Do they need to tow a trailer? All of these situations would require specific training, and you need to document where you have identified and met requirements for additional driver training in the driver’s record.

5. Work schedules

Many of us complain about van drivers speeding around in a dangerous manner, especially delivery drivers, but think about why they might be doing it before simply blaming the driver. Have they been set an unrealistic schedule that requires them to speed to keep on track, or have they been financially incentivised to speed in order to fit more drops in? The driver could still be prosecuted as they shouldn’t be speeding but the employer could also be guilty of putting profit before safety.

6. Safe journeys

Following the Highway Code and road traffic law is essential for drivers but are they familiar with it? Do they know for instance that vans are subject to lower national speed limits than cars on single and dual carriageways? Do you have a suitable policy on mobile phone use while driving and do your drivers know what it is? Whist legal, Bluetooth calls are proven to be no safer than handheld calls so there is always a risk – and think whether the driver’s manager or work schedulers are guilty of calling them whilst they are driving.

Of course, there are many more elements of effective driver safety management than those outlined above but they do cover the main areas. Without having robust processes in place for all of these things, it’s impossible to manage the health and safety of staff, drivers and road users, and to manage a safe and compliant fleet.

If you would like more information on how to manage a safe and compliant fleet, check out our FleetCheck service here.

Securing valuable accreditations that are well-regarded in the fleet industry is one way you can quickly ramp up the authority of your company’s fleet, and one of the most respected accreditations you can get your fleet set up with is the Fleet Operator Recognition Scheme (FORS).

In this blog we’ll take you through the various levels of FORS accreditation you can achieve, as well as the benefits the Fleet Operator Recognition Scheme has for both fleet drivers and managers.

What is FORS?

The Fleet Operator Recognition Scheme (FORS) aims to ramp up standards in fleet operations with a focus on areas such as road safety, fuel efficiency, and carbon emissions. Measuring performance in these areas give fleets an opportunity to demonstrate the positive advancements they are making, which is not only valuable for reputation but also for both driver safety and environmental responsibility.

To gain the FORS accreditations, you must simply prove that you are meeting the requirements of the level of accreditation you are looking to achieve.

FORS Accreditations

There are three tiers of FORS accreditation: bronze, silver and gold. Each tier builds upon the last and has a different set of requirements to demonstrate best practice in specific ways.

The standards for each tier of FORS accreditation are outline below:

Bronze Accreditation

For the bronze accreditation, FORS will audit your company; offering you tools and resources to help you pass. After you pass this audit, you will achieve your bronze FORS.

To start, you simply need to register your business at the FORS website. Then download the standards documentation to get to grips with what the audit will check and the standards you’ll need to meet. FORS will audit your company within 90 days of registration.

Silver Accreditation

In order to achieve silver accreditation, you will need to meet all the standards outlined in the bronze accreditation as well as ensuring your fleet is compliant with CLOCS Standard for Construction Logistics and the TfL Work Related Road Risk.

Whilst more in-depth than the bronze FORS audit, the process is the same and the information and guide can be found online at the website.

Gold Accreditation

The highest standard of compliance, the gold FORS accreditation requires you to also promote the FORS standard through your supply chain. You must additionally demonstrate meaningful improvements from your Silver accreditation.

Benefits of FORS accreditation

Benefits for fleet drivers

Fleet drivers can put to good use the vast range of courses and e-learning opportunities offered by FORS, helping them to improve and maintain a high standard of driver competency and safety. These learning opportunities can help fleet drivers become more aware and mindful of the safety aspects of their driving (benefiting themselves and other road users), as well as their impact on the environment.

Courses include:

• Beyond Compulsory Basic Training – for delivery drivers in urban environments.
• Safe Urban Driving – for commercial HGV operators.
• TruckSmart – for commercial HGV drivers.
• VanSmart – for commercial van drivers.
• LoCity Driving – for commercial HGV and van drivers.

Benefits for fleet operators

For fleet operators, FORS also offers a range of courses and e-learning opportunities that can be useful in improving their performance in their role.

• HGV/PCV Fleet Management Essentials – for supervisory staff working to achieve O Licence.
• Car/Van Fleet Management Essentials – for supervisory staff operating car and van fleets.
• Toolbox Talks – to help operators communicate with their staff.
• Collision Management – Road Risk Champion and Collision Investigator.
• FORS Practitioner – series of workshops designed for transport managers.

Saving money with FORS

Other than the clear safety benefits that come with operating at a FORS worthy standard, holding a FORS accreditation can also save your business money. From reducing incidents and accidents to reducing fuel spending, FORS can help your fleet make small but impactful changes that will quickly turn into savings for your company too.

FORS can help your fuel consumption by teaching fleet operators useful ways to track fuel usage, and teaching fleet drivers tactics for how they can drive in a less consumptive manner, like cutting down time spent idle and being tactical with driving speeds and journey planning. Good for both the environment and the company bank account.

Fleet management tools from Fuel Card Services

Put the new skills you learn through your acquisition of the FORS accreditations with software and telematics systems that will complement and assist your fleet management. From managing fuel spending and consumption with our Mileage Count, to keeping track of driver safety and habits with TeleGence telematics, we can help support you in managing your fleet efficiently and effectively, with money saving opportunities across the board.

If you are interested in learning more about what we offer or would like some support in choosing the right fleet management tools for your fleet, get in touch today.