Marie Jarrold set to save BCA £700,000 on fleet costs

Two decisions taken by BCA fleet manager Marie Jarrold within the past seven months could end up saving the company more than £700,000.

The first, a move to longer replacement cycles, echoes a popular trend among fleets which lease their vehicles.

For BCA, which outright purchases its vehicle fleet, the action brings an immediate benefit to the bottom line.

BCA’s policy changed in October from four years/80,000 miles to four-and-a-half years/90,000 miles.

The company, which spends £1.2 million a year replacing 100-120 vehicles, estimates a one-off saving of £641,000 by deferring financial outlay.

There is a cost to extending replacement cycles: maintenance bills will rise and the re-sale value will fall slightly.

However, BCA estimates the impact to be minimal – £200-300 per vehicle on higher service costs.

Revised valuations

“Driver loan contracts have been extended under HMRC rules and vehicle valuations have been reviewed and revised on future CAP residual value and driver mileage expectations,” says Jarrold.

The revision has not been without its hiccups, largely due to BCA’s fleet policy of buying used cars up to a year old and 15,000 miles.

Some cars will return to market aged more than five years old. CAP, though, only provides residual data up to four years.

During discussions with CAP, Jarrold discovered that other fleets were also requesting valuations at 54 months and beyond.

She is currently averaging the residual forecasting between 48 and 60 months while CAP works to extend its RV model.

Two-pronged efficiency drive

In January, Jarrold introduced her second cost-saving measure, a two-pronged efficiency drive which capped cars at 160g/km of CO2 and set a minimum combined fuel consumption of 40mpg.

Lowering the average emissions – the target is a 10% reduction over the next 4.5 years – will save the company between £4,000 and £39,000 on road fund licence, depending on vehicle choice. It will also shave £18,000 off the annual fuel bill.

Setting a 40mpg limit will lop another £20,000-36,000 off the fuel bill every year.
Its average fleet efficiency has already risen from 44mpg to 46mpg on purchases made since January.

The remarketing company’s 340 company car drivers now select from a seven-band options list based on engine size and value.

Prior to the policy changes, BCA was already running one of the most cost-efficient fleets thanks to its policy of purchasing only used cars.

Almost all the cars are sourced internally, at one of BCA’s auctions.

The savings are considerable and raise the question about why more fleets don’t consider a used car fleet policy.