Grey Fleet Management
Managing your grey fleet risk
Grey fleet management remains one of the most pressing concerns for fleet managers, but there are ways of minimising this risk and managing it more effectively.
What is grey fleet?
The term ‘grey fleet’ refers to those vehicles which are owned by employees but used regularly on company business. They may be acquired via company-provided cash allowances by drivers who qualify for a company car but who opt to take a cash alternative instead.
With support from CLM you can improve your grey fleet management processes and decrease financial risks.
Your Grey Fleet Duty of Care
Grey fleet management raises a number of issues for many businesses, not least the duty of care the company owes to its employees who drive on company business, along with a responsibility to the public at large. The following duty of care responsibilities should be considered as part of your grey fleet management strategy:
- Current Health and Safety Regulations – ensuring that all grey fleet vehicles associated with your business are fit for purpose.
- Legal Requirements – all grey fleet vehicles should have a valid MOT, be insured for appropriate business use and the employee should have a valid driving licence.
- Regular Checks – If a grey fleet driver is involved in an accident and is found to have an invalid licence or incorrect insurance, the company could be held liable if the vehicle involved has not been kept in a roadworthy condition.
- Clear Audit Trail – Employers need to be able to demonstrate they have taken all necessary steps to manage duty of care.
Grey Fleet Management Support from CLM
Fleet Support: Maintenance Checks and Admin
Part of managing grey fleet risk should be to carry out regular vehicle condition, electronic licence and insurance checks. With fleet support from our team of experts at CLM, you can implement a process so that all grey fleet drivers that form part of your workforce do the following:
- verify the condition of their vehicles, including tyres, glass, lights and bodywork
- produce a valid driving licence
- produce business insurance details
- confirm they have not incurred any penalty points since the last check
Delinquency reports will be produced for any drivers that fail to abide by these conditions, which can then be discussed with the drivers and their line managers. Remedial action, up to and including driver training, can then be put in place, as and when required.
Grey fleet drivers will also be sent annual reminders regarding Road Fund Licence renewals and, where appropriate on older cars, MOT reminders.
To verify that grey fleet vehicles are serviced regularly and in accordance with manufacturer warranties, drivers will also be required to input their total mileage on a monthly basis via an online mileage reporting system, so that timely service reminders can be issued as the service draws near.
Grey Fleet Management
There are some very sound financial reasons for keeping employees in grey fleet vehicles to a minimum.
Mileage reimbursement for drivers using their cars for business purposes creates a substantial cost centre that, like any other, needs to be managed effectively.
HM Revenue & Customs allows employers to reimburse drivers up to a certain level of business mileage tax-free. Under the current Approved Mileage Allowance Payments scheme, the rates are 45p per mile for the first 10,000 miles and 25p thereafter – which can quickly mount up if high grey fleet miles are being driven.
Combined with this level of mileage rates, which may also create the incentive for additional travel, we always advise our clients to look carefully at the impact grey fleet vehicles have on total emissions in the light of their corporate environmental policy.
This is because grey fleet vehicles are generally older and create higher emissions than company-owned or daily rental vehicles and are less likely to be well maintained.
A New Approach to Grey Fleet Management
At CLM, we can implement a grey fleet management strategy with which all your grey fleet vehicles are treated exactly the same as if they were company-owned. As with all other company vehicles, all records of your grey fleet vehicles will be kept online in a central fleet management database. This will provide you with:
- Access to grey fleet vehicle data at all times, with any changes to their condition, status or ownership accurately recorded so that they are up to date.
- Exception reporting to flag up when any potential issues are identified.
- Documented processes to clearly establish the necessary audit trail.
On behalf of our clients, we ensure that the same rigorous tests and conditions are applied to grey fleet vehicles as to company-owned vehicles, confirming that they are legally compliant. That way, your grey fleet can be managed more effectively and the risk to the company kept under control.
If you would like to discuss how CLM can help you manage your grey fleet, or you require additional fleet management support, don’t hesitate to get in touch.