It’s time to get pragmatic over fuel choices, CLM tells fleet managers
Conflicting messages about the future of diesel and
contradictory advice on how and when to introduce alternative fuel vehicles was
not helping companies make sensible decisions about their fleets, according to John
Lawrence, managing director at CLM Fleet Management.
“We’re seeing many organisations that are struggling to get
to grips with the everyday practicalities of running their fleet in the midst
of the debate over fuels. When you’re trying to make sensible decisions about
managing costs, keeping the business mobile and helping drivers to reduce their
tax burden, it’s not helpful to have so much noise,” he said.
CLM, which manages more than 15,000 vehicles in the UK, says
it has been working closely with its clients in an attempt to filter out some
of “this noise” and ensure a clear focus on the fundamentals. That, said the
company, included an emphasis on whole life costs and ensuring that the right
vehicles were selected for the right roles and journey patterns.
Mr Lawrence said: “Whole life costs remain the key measure
for any fleet and optimising this means taking a flexible approach to vehicle
and fuel selection. Leasing companies are currently taking very different
residual value positions depending on manufacturer, model and particularly fuel
“From a vehicle acquisition perspective, this means that if fleet
managers are not shopping around for the best deal on each individual vehicle they’re
likely to be paying too much. Offerings like our own Smartpanel funding
solution mean they’ll at least have the flexibility to pick the leasing company
with the best price for the vehicle in question.
“But running costs also vary across the fuel types, so it’s
a matter of getting the calculations right based on mileage and how long fleets
intend to run a vehicle. It’s for this reason that we would never advise a
client to, for example, switch away from diesels completely because for many
situations these remain the most cost-effective choice.’
Mr Lawrence believes such a pragmatic approach also worked
from a mobility perspective, explaining: “If the nature of a business demands a
large number of short, urban journeys, then plug-in hybrids or even pure
electric vehicles can be the perfect choice.
“But if covering longer distances, and don’t have the
opportunity for charging, then electric vehicles simply aren’t an option and
plug-in hybrids become conventional vehicles carrying several hundred kilos of
battery packs and electric motors.
“By working closely with a fleet management partner, fleet
managers should be able to assess journey patterns and crunch the numbers to
determine the optimal vehicle mix for the business. We’re not pretending this
is rocket science but it’s surprising how many organisations are being poorly
The current company car benefit-in-kind tax environment was
also leading to conflicts of interests over fuel-type selection that needed to
be carefully managed, said CLM.
Focusing on a driver selecting a plug-in hybrid in an attempt
to minimise their benefit-in-kind tax liabilities, Mr Lawrence said: “There is the
higher P11D value to consider. Then you have to look at whether the driver is
realistically able to optimise use of the vehicle by maximising the mileage
covered in electric only mode. This would mean ideally being able to charge the
car both at home and at the workplace.
“If this isn’t possible then fuel consumption is likely to
be far higher than an equivalent diesel. Where this is the case, fleet managers
need to seriously consider whether such drivers should be allowed to choose
this type of vehicle.”
Mr Lawrence concluded:
“There are a lot of changes in our industry at the moment, but this
doesn’t have to lead to panic or rash decision-making. By sticking to the
basics of good fleet management it means we can take advantage of the
opportunities provided by new technologies and avoid the potential pitfalls.
“If people are concerned, there’s a lot of good information
and advice out there amongst the commotion and they shouldn’t be afraid to ask
for help in seeking it out.”