Grey fleet

What is a ‘grey fleet' vehicle?

A ‘grey fleet' vehicle is one which is employee owned and is used for work related journeys.

For more advice on operating vehicles check the quick links on the right

How does this effect employers?

There are three good reasons why employers might want to reduce the use of grey fleet vehicles:

• Corporate social responsibility – Employers have a duty under the Health and Safety at Work Act 1974 to ensure, so far as is reasonably practicable the health, safety and welfare at work, including whilst driving for work, their employees.  This is relevant in relation to grey fleet vehicles as this statutory duty would apply when employees are undertaking driving for work in their own vehicles. While it is possible to manage grey fleet vehicles effectively, many employers struggle to do so, on grounds of resource, expertise and the greater difficulty in monitoring vehicles not directly owned or managed by the organisation.
• CO2 emissions - Grey fleet vehicles are generally older than company owned cars and are known to contribute the bulk of the road transport CO2 emissions in some organisations. Tackling grey fleet vehicles will help reduce an organisations carbon footprint and contribute towards achieving CO2 reduction targets.
• Cost – Grey fleet mileage re-imbursement rates are normally considerably higher than alternative modes of travel and a focus on grey fleet vehicles helps employees make conscious decisions about the journeys they make. This typically results in a reduction in unnecessary business journeys and reduces the strain on travel budgets.

What are the alternatives to grey fleet vehicles?

The main alternatives to grey fleet vehicles are: telephone or video conferencing, public transport, car rental, car leasing or fleet management.

For more information on telephone or video conferencing take a look at our greening the fleet pages which can be accessed here.

Rental – Car rental provides the newest, cleanest and safest vehicles for employees on a flexible basis. Cars can be delivered to the office or home and rented for as little as one hour to one month. Employers can be provided with detailed management reporting information to help monitor usage. Rental allows an employer to monitor vehicle emissions, costs and the health and safety of employees.

Leasing – Leasing vehicles provides a fixed cost motoring solution with no surprises, it is a cost effective solution when compared with grey fleet miles as is demonstrated below. It is a useful means of attracting and retaining staff as they are provided with the latest safety features and the greenest fuel efficient technology.

Employers are provided with total control over their fleet profiles and total peace of mind as they are provided with ongoing fleet management advice and support.

Fleet management – Where employers allow own vehicle use it is important that the use is managed to comply with duty of care obligations, this includes areas such as: driver licence status, insurance validity, vehicle condition and mileage audit. Leasing companies can assist with advice and guidance in this area.

What are the cost savings in reducing grey fleet?

Where organisations have taken steps to manage grey fleet vehicles financial savings have been achieved, both direct and indirect:

• Based on the experiences of the Office of Government Commerce and the Environment Agency, a 20% reduction in organisational grey fleet mileage of 10 million miles could generate an annual net saving of over £1 million.
• 10 million miles at an average speed of 40mph would take up to 250,000 hours. Assuming an average hourly cost of £15, this would represent £3.8 million of indirect costs, which could be reduced through eliminating unnecessary journeys and using alternative forms of transport.

The table below compares the cost of various alternatives to grey fleet usage.

Further information

The Office of Government Commerce has produced a number of case studies and best practice guidance on reducing the public sectors dependence on grey fleet vehicles. This information is just as applicable for the private sector as well and can be accessed from here.