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Changes to Fleet Purchasing Plans

Oct 4 2011

A recent report has revealed how some companies are changing the way they operate with regard to their fleet vehicles in order to save money. Business car leasing is a large industry but many companies are being forced to look at reductions in running costs based on research carried out on the Fleet200 companies, the 20 largest fleets used by companies in 10 key areas of industry.

Overall spend has been reduced by around £300 million and this covers factors such as reduced budgets, reduced mileage and a reduced spend on each contract hire vehicle as companies are experiencing difficult economic conditions in the current climate.

As companies are cutting back in other areas such as staffing levels, there is often a reduced need for the vehicles, so the number of vehicles being used has dropped anyway although there are also many companies that are looking at the criteria for those eligible for a company vehicle. Companies are also changing the criteria by which they assess whether a vehicle should be replaced, usually by increasing the mileage threshold. The average criteria are now standing at either 80,000 miles or 4 years for cars or 90,000 miles or 5 years for a van.

The public sector currently has one of the longest replacement cycles in the car leasing sector with most NHS trusts replacing cars on average every 4.2 years and approximately 10% of companies keep their cars for longer than the current average.

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