Companies with vehicle fleets are increasingly offering personal contract hire schemes to support the growing numbers of drivers taking a cash allowance.
As such, they are not only offering an important employee benefit but making their grey fleet management far simpler and improving their carbon footprint.
According to Shaun Barritt, CEO of the Grosvenor Group, the UK’s largest privately-owned contract hire and fleet management specialist, by offering companies with vehicle fleets a well-structured and competitive personal leasing solution to sit alongside their company car schemes has wide-ranging benefits, hence the dramatic uptake in the last 12 to 18 months.
“According to the BVRLA’s recent company car report, we’re seeing some unprecedented trends in the vehicle fleet sector,” said Shaun.
“The true company car market has been reducing year on year since 2017 and the number of privately registered cars has been increasing at a faster rate than those owned by companies.
“The average age of grey fleet and cash allowance cars is older than both lease cars and those funded through a salary sacrifice scheme, and the average fleet car is 29% cleaner than its cash allowance counterpart.
“This all points towards the fact that when drivers take cash in lieu of a company car, they are choosing older, higher emission vehicles that are increasing the company’s overall carbon footprint for business travel and amassing an ever-more problematic grey fleet.
“That’s why we’re seeing a rising number of companies choosing our personal leasing scheme, which we offer in partnership with Select car Leasing.
“With an in-house personal leasing team based at our head office alongside our corporate contract hire and fleet management teams, when drivers take the cash option they are far more likely to move seamlessly into a Grosvenor PCH car from their company car.
“As a result, the cash driver’s new personal lease car is likely to be low emission, and will be properly serviced, taxed and not need an MOT for 3 years. It is also managed by the same safe pair of hands that runs our customers’ company vehicles and becomes a private car that the company is proud for their employee to use for business.”
The BVRLA report goes on to highlight the scale of the grey fleet problem for fleets.
The total number of cars used for business use is circa 12.3 million, of which 10.5 million are grey fleet and 1.8 million company cars, with 32% of drivers being offered a cash allowance instead of a company car if they wish to take it.
“There is no doubt that if you provide a driver with a superb range of truly exciting PCH offers at the moment they receive their cash allowance they are more likely to choose the personal leasing route rather than spend that money elsewhere on something old, polluting and unsuitable,” said Shaun.
“This has huge advantages for fleet managers, finance directors, HR directors and those responsibly for compliance and sustainability and it’s for this reason that demand for PCH is soaring.
“To put in context the seismic shift we’re seeing in the fleet market, we’ve doubled the size of our personal leasing team in the last 12 months and anticipate doubling it again in 2021 – and this is with PCH demand coming from the corporate sector, not consumer.”