Fleets Continue To Go Green In Bid To Cut Costs
ALD Automotive, leading contract hire and leasing company and collator of data analysis, have concluded that cost-conscious fleet decision-makers and company car drivers continue to choose low emission vehicles in record numbers and to travel fewer miles.
This information is confirmed by the following facts: In the first nine months of 2009 average CO2 emissions of new company cars added to its fleet have dropped to an all-time low of 147 g/km; The average annual contracted mileage for company cars this year is 18,127 miles.
There are several reasons for this continued fleet support for the ‘greener’ vehicle such as the recession, the focus on cost management by businesses and individuals alike, the introduction of new corporation tax rules in April and employees striving to cut their benefit-in-kind tax bills by choosing to drive one of the increasing number of low emission vehicles.
Since ALD began its CO2 data emissions analysis in 2003 it has seen average new car emissions cut by 20 g/km. The Society of Motor Manufacturers reported in 2003 that average new car CO2 emissions were 172.1 g/km compared to the current 2009 average new car CO2 emissions, which are 150.2 g/km; even allowing for the impact of the scrappage scheme and its influence on consumers buying new small cars, it means ALD fleet customers are ahead of the overall new car market in the acquisition of eco-friendly cars.
ALD’s analysis of mileage in company cars added to its fleet shows organisations are clocking up 4,348 fewer miles when figures for 2003 are compared to the first nine months of 2009.
By way of a comparison, in January 2003 the average company car supplied by ALD had a CO2 emissions figure of 166.9 g/km and was likely to clock up 23,782 miles a year. Last month (September 2009) the comparative figures were 147.6 g/km and 17,529 miles, showing an emissions reduction of 19.3 g/km and a contracted mileage reduction of 6,253 miles.
This data comes at a time when the UK’s Committee on Climate Change, an independent body which advises the Government on emissions targets, called for a step change in CO2 reduction with the Government responding with a target for the carbon-efficiency of new cars to be on average 95 g/km by 2020.
ALD has also seen a significant trend in the past 12 months for fleets to change to sub 160 g/km to take advantage of April’s arrival of capital allowance changes and have noted that in some fleets that a company car emissions cap at 160 g/km has been set, after taking on board advice from ALD, with the result that demand for company cars with emissions above the 160 g/km capital allowance threshold has dropped in the last few months to an all-time low .
With the choice of low emission cars from a wide range of manufacturers increasing month-by-month, ALD marketing director David Yates expects the downward shift to continue. The low emission drive, he says will be further influenced by the April 1, 2010 introduction of the Government’s new first year Vehicle Excise Duty rate. That will see cars with emissions of 130 g/km subjected to a £0 first-year VED rate escalating through a series of bands to a first year rate of £950 for cars over 255 g/km.
Mr Yates said: “Vehicle technology and fiscal tax regimes will continue to drive the trend towards low emission company cars. Meanwhile, the recession has increased businesses’ focus on cost control and that is influencing vehicle use.
“Fuel is the second biggest vehicle expense after depreciation, so by encouraging drivers to think if a journey is necessary and making mileage management a key fleet performance indicator, companies are also able to save cash.”
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