Reduction in company cars fuels grey fleet growth, says FleetCheck

A reduction in the number of company cars is leading to an increase in grey fleet vehicles, according to Fleet Check.

The fleet management software business references HMRC data, which shows there were 80,000 fewer taxable company cars in 2020-2021.

More analysis of the HMRC data will be published in the October edition of Fleet News.

Peter Golding, FleetCheck managing director, said the figures suggest more drivers decided to take a cash option during the pandemic and are now using their own cars for business purposes.

He explained: “There’s a relatively complex picture emerging here. Over the next few years, we expect overall company car numbers to grow as low taxation electric vehicles (EVs) come to form the majority of fleets. However, it also makes sense that in recent times, drivers who have been spending little time on the road because of lockdowns would want to opt out of the fleet and take a cash allowance, even if only temporarily.

“What this means is that we are going through a phase where a relatively large number of people have moved out of fleet schemes – 80,000 according to the HMRC numbers – and are using their own vehicle for work purposes. This means a substantial growth in grey fleets and potentially also an increase in the proportion of drivers who are using their own cars quite intensively for business, rather than on a more occasional basis.”

The trend will place a greater emphasis on grey fleet management, particularly in companies where there had been a large scale movement out of company cars.

Golding said: “Grey fleet is, we believe, a generally neglected area of fleet management and this influx of new vehicles means that employers need to pay great attention to ensuring their house is in order in two key areas – risk management and the environment. Drivers using their own cars tend to opt for older, more polluting models, and this creates a lot of pressure to get these areas right.

“Certainly, we are already having conversations with our user base about this subject, covering everything from setting the right grey fleet policies to ensuring that our software is used effectively to both make sure that drivers and vehicles meet safety standards, and that the fleet carbon footprint remains on a downward trajectory.

“At the very least, companies should be aware that their grey fleet responsibilities are the same as for any company car and they need to cover basics such as licence checking and ensuring drivers have suitable business insurance.”

Golding added that it was also important to create a pathway for employees who had left the company car scheme to return at some point in the future.

He said: “A company car will nearly always be safer, more environmentally friendly and generally cheaper for businesses to run than a grey fleet equivalent. Employers need to make the advantages of moving into a very low taxation EV as clear as possible to their drivers and encourage them to follow this route.”