Some definitions Some definitions
A fleet is any collection of cars and/or vans being used and operated within a single business. It doesn't need to be a huge number of vehicles: it's much more about the state of mind that says that applying some common principles to all the vehicles being used generally makes more sense than running them all in isolation.
The vast majority of fleets exist to support the main business of the operator, whether that's in the public, private or voluntary sector; local to one site or scattered across the country. Any temptation to leave the drivers and the vehicles to their own devices is dangerous: such businesses have legal obligations for any employee using a car or van on the roads, irrespective of company or fleet size.
A pool car is a car used by any of a group of employees for any legitimate business purpose. Private use by any employee is not allowed; cars are usually returned to a company base overnight. A company car is any car provided by the employer for use by one employee; and generally bringing entitlement to private use of the car for domestic travel. Any such private use is taxable under benefit-in-kind tax rules.
Fleet Management is the process to record, monitor and control what is happening with the vehicles and drivers. The main purpose is to control - and reduce - costs, but there are many other aspects too - like avoiding HR issues because one employee feels that a colleague has a much better car than another.
Fleet costs come in many forms. Naturally, the types of cost are similar across all vehicle types and methods, but some processes can help reduce costs, while others can be positively wasteful. For any car or van, the main cost headings are:
- Depreciation: essentially the cost difference between what is paid for the vehicle at the start, less what is recovered when it is sold;
- Funding: the interest or finance cost associated with the capital expenditure to acquire the vehicle in the first place;
- Maintenance: money spent in garages and other aftermarket services or routine/scheduled services, plus replacement of worn parts plus any repairs not covered in full by the manufacturer's warranty;
- Insurance: the sum of the insurance premium plus any other costs relating to repair of accident damage;
- Fuel: the amount of money spent on the appropriate fuel (generally petrol or diesel). Ideally should capture the costs of all the fuel used but often limited to the fuel used for business journeys only;
- Vehicle Excise Duty: the annual charge by UK government for allowing the vehicle to be used on public roads;
- Fleet Administration: the costs of the administration needed to set up the systems to acquire the vehicles, then record and monitor all the other costs; together with other factors like a computer system to hold the records