FLEETS need expert advice to help them embrace change, said Craig McNaughton, corporate director of Lex Autolease.
Speaking at the recent ACFO conference in Birmingham, Craig said the sector was undergoing change at a “scale and pace few, if any, have seen before”.
Among the challenges facing fleet decision-makers was the introduction of the Worldwide harmonised Light vehicles Test Procedure (WLTP) for the measuring of vehicle carbon dioxide (CO2) emissions and fuel economy; government policy around diesel and taxation of the fuel; increasing company car benefit-in-kind taxation and a lack of clarity about the post-April 2020 burden; for fleets that contract hire the lease accounting standard changes effective from January 01, 2019; and the anticipated widespread introduction of Clean Air Zones in towns and cities nationwide.
“it is not an option for fleet managers to do nothing”
Mr McNaughton told the seminar: “The need for expert advice has never been greater to guide fleets through the minefield of legislation. We are seeing fleet managers who are putting vehicle ordering on hold and extending lease terms to buy themselves time to work out what the impact of the changes are. But it is not an option for fleet managers to do nothing. It is essential company car policies are reviewed.”
Blended fuel policy best for the future
Looking forward he said the direction of travel being dictated by legislation was clear with the future of the company car being fleet flexibility via a “blended fuel policy”. This should embrace the cleanest and most efficient diesel engines, ultra-low emission petrol models, plug-in hybrids and 100% electric vehicles.
Craig said that decision-makers should “embrace change” and an ultra-low emission future. He also added that telematics and data analytics were also key in the transition to a “sustainable future”.
Containing fleet costs
“Fleet managers who are not on that journey need to start thinking about it because we are on an unstoppable road. Fleet costs will continue to rise and managers will have to find new ways to save money with data key.
“Working smarter and having the ability to analyse and improve operational areas of the fleet will be the route to cost efficiencies and keeping the company car fit for the future. It is time to change.”
He claimed that “company cars still remain the best environmental choice for the UK”. Employees who opted out of company car schemes in favour of a cash option could choose to drive older vehicles with higher emissions.
However, WLTP was introducing added complexity to the fleet sector and heralding potential tax rises due to vehicles recording increased CO2 emissions under the new testing regime. McNaughton suggested there could be a rise in the UK’s ‘grey fleet’ as a result with employees baulking at additional benefit in kind costs.
McNaughton said employers should have management solutions in place to support ‘grey fleet’ management.
There was also the potential for ‘grey fleets’ to increase costsin comparison with employees driving the most efficient company cars with the introduction of Clean Air Zones. That was because own-car drivers would expect to claim back through expenses toxicity charges when they entered urban Clean Air Zones in “dirty” cars.
The ACFO conference was held at the Vox Conference Centre, Resorts World, Birmingham. It was attended by more than 200 fleet decision-makers and sponsored by TomTom Telematics and Lex Autolease.