Arval says AFR rates offer company car choice list consistency

Arval is giving its customers the option to use official Advisory Fuel Rates (AFRs) instead of pump prices in order to make company car choice lists more consistent.

The leasing and fleet management company says that using real world fuel prices tends to create short-term anomalies when it comes to the models on offer.

Shaun Sadlier, head of consulting at Arval, explained: “It happens surprisingly often that, when fuel prices rise, the whole life costs for certain cars will increase to the point where they are automatically excluded from the choice list. But, a few weeks later, when prices have stabilised, they are then automatically added again.

“This creates situations that are difficult to sustain. An employee may be able to order a car from the choice list one month, while it is removed from a colleague’s remit a month later, but then returns for another colleague a month afterwards.

“On one level, this brings about human resources problems because some employees find they cannot have the same model as someone with an identical job purely because of short term fuel price volatility.

“On another, it brings an unwanted degree of randomness to a choice list that has probably been carefully constructed and agreed, and which is fundamentally very sound.”

Sadlier says that substituting AFR figures for real world fuel prices removed short-term volatility but still provided a good indication of a model’s suitability for inclusion on a choice list from a fuel cost perspective.

He continued: “We have been offering this facility on a trial basis for a number of weeks and already have had several major fleets move onto the AFR model because they recognise its inherent advantages.

“As we enter a period of what looks likely to be price instability for petrol and diesel, there are strong arguments for using the new model and we plan to make it more widely available.”