What are the financial implications of running a grey fleet?

If your employees use their own vehicles for work purposes, you are running a grey fleet.

Although at first this may seem a quick and convenient option for a business, it can result in increased costs due to mileage claims and additional administration, not to mention legal considerations.

Points to bear in mind

• Mileage clams

Reimbursing employees for business mileage can be more costly than if they use a company vehicle.

• Mileage tracking

It can be a challenge to accurately track mileage for grey fleet vehicles, which can lead to overpayment.

• Legal compliance
  Businesses must ensure that grey fleet vehicles are roadworthy, insured, and compliant with all regulations which takes time and increases administrative costs.

Other considerations

• Employers have a duty of care to their employees and can be held liable for accidents or vehicle damage incurred while their employees are driving for work.
• Grey fleet vehicles are often older and less well maintained than a company vehicle resulting in increased emissions.

Always weigh up the pros and cons of running a grey fleet as what may at first seem like a quick and easy solution, can end up costing the business more in the long run.