Allowing employees to use their own cars for business trips and claim back mileage reimbursement may seem like the easiest option to keep employees mobile. But the truth is that this so-called ‘grey fleet’ is actually costing businesses money and rendering them liable to risks over both employee safety and the sustainability of their business.
In fact, there are some very good reasons to look for alternatives:
- The 75-mile break-even point
Once employees are undertaking journeys of 75 miles or more, it might actually be cheaper to hire a car for the day and just pay for petrol. So it makes sense for businesses to have those calculations carried out and see where their particular break-even point might be. It might also be worthwhile to consider a dedicated car club, which can be a viable option for shorter journeys.
- Mileage over-claim
- A less sustainable fleet
Organisations with an eye on sustainability may want to ensure people drive newer, greener vehicles – or even have access to electric cars, as offered by a number of car clubs.
- Health and safety risks
Think about it. Do you know what cars your employees own? Do you know how often they’re serviced, if they have a valid MOT and how old they are? Do you know if their tyres have the legal level of tread and whether the brakes work? Do you know if your drivers have business-use car insurance or points on their licence? If they drive those cars for work, the answer to all those questions had better be yes.
Have a travel policy
As with a lot of business issues, what looks simple at first glance is actually far more complicated. With employees putting in a blizzard of individual expense claims for mileage reimbursement, do you actually know how much it’s costing you? Are people taking trips they don’t have to? Are those cars green enough and safe to drive?
It’s not easy to answer these questions, but it certainly can be done. And in a lot of cases, you might find that there are cheaper, cleaner and safer options out there.
You can’t always assume your employees will make the most suitable travel choices. So any company, no matter how small, needs a sensible and well thought out travel policy so that employees know the best way to get from A to B and stay mobile.
By Adrian Bewley, director of business rental UK & Ireland at Enterprise Rent-A-Car