New grey fleet service launched by Mercia Fleet Management

Mercia Fleet Management has launched a new grey fleet service to mitigate risk and help cut costs.

The new service is aimed at businesses where significant numbers of employees use their own vehicles on company business and then reclaim business mileage at up to 45p per mile, under the Approved Mileage Allowance Payments (AMAPs) scheme.

Mercia Grey Fleet Management assesses the need to use vehicles to attend regular business meetings or visit clients and evaluates the cost efficiency to the business of using AMAPs, using a decision tree based on the number of business miles that are required to be travelled.

If under 5 miles, a typical recommendation might be to take a taxi or cycle where appropriate. At 15-25 miles, the advice would typically be to use employee-owned vehicles with checks carried out on vehicle condition and relevant business insurance before allowing use.

From 25-100 miles the suggestion might be to take the train or consider a taxi, comparing the costs of these alternative means of transport to those likely to be incurred under AMAPs.

If more than 100 miles, the recommendation would be to use a hire car as being the most cost-effective option, with all bookings handled by administrators at Mercia Fleet Management, the recently announced fleet management division of Fleet Evolution.

“Our key objectives with Mercia Grey Fleet Management are to mitigate risk, as well as assessing cost effectiveness to the business,” said Andrew Leech, managing director at Fleet Evolution and head of the new fleet management division.

“Allowing employees to use their own vehicles exposes the business to considerable duty of care risks as, generally, employees’ own vehicles are in worse condition than new – typically they are eight years old - and are often without adequate servicing or relevant business use insurance.

“Our starting point is always to assess whether a journey is required at all as one thing the pandemic has shown us is that online conference calls can be as effective as face-to-face meetings.

“Another focus of the grey fleet management service is the cost of using AMAPs and for a business trip of, say, 150 miles where the reimbursement cost might be £67.50 we would always suggest using a hire car.

“Not only would this work out cheaper, but the duty of care risk is removed as the car would be new or nearly new, regularly serviced and correctly insured by the rental company.”

Mercia Fleet Management is offering the newly launched service free of charge to the first 10 businesses that apply for it. “We will be offering this for a limited time only as we are very confident in the capabilities of the new service,” added Leech.

Fleet Evolution launched Mercia Fleet Management last month after providing bespoke, personalised fleet management services for several years to salary sacrifice clients who wanted a higher level of customer care.

The new division offers a portfolio of fleet management services, including fleet policy provision, vehicle acquisition advice, licence checking, risk management, fleet service scheduling, vehicle logistics and daily rental, plus wider mobility services.

Leech continued: “The new division was borne out of demand from existing salary sacrifice clients who want deeper levels of customer service.

“Mercia was the historic name for Middle England where our main focus will be with the new division, as we believe this will enable us to offer a higher level of bespoke customer service.”