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Understanding Grey Fleets


Two white cars parked next to each other

Grey fleets, comprised of employees using their personal vehicles for business purposes, offer a cost-effective alternative to traditional company-owned fleets. While they can reduce upfront costs and maintenance expenses, effective management is crucial to avoid potential drawbacks.


Luckily, if you're thinking of running a grey fleet in your business, you have come to the right place. TCH Leasing will happily look after all the hard work and stress that can arise during operation.


What Exactly is a Grey Fleet?


A prominent example of businesses using grey fleets is when a company provides its employees with a car allowance (extra, taxable, money in their pay check every month). This allowance allows employees to cover the costs of a vehicle they own, which is used for both business and personal use. Grey fleets can be a great solution for companies who do not want to go down the traditional leased company car route. However, there are some vital factors to bear in mind.


Key Considerations:


Mileage Reimbursement: 


As employees in the company will be travelling work-related journeys in their own vehicles, companies operating grey fleets within the business will need to reimburse drivers for the cost of fuel, plus wear and tear to the vehicle. These rates need to be carefully calculated to avoid excessive costs.


Safety Policies: 


Implement robust safety policies and ensure all grey fleet vehicles and drivers meet necessary standards. It’s important that all cars driven are roadworthy, licenses are thoroughly checked and the correct business car insurance is in place.


Vehicle Maintenance: 


Monitor vehicle maintenance to minimise risks and ensure compliance with regulations. This includes up to date MOTs and making sure tyres are up to standard.


Liability: 


Understand your liability exposure and implement appropriate insurance coverage. Under the Health and Safety at Work Act 1974, employers have a duty of care to ensure the safety of their employees while they are driving for work purposes.



Benefits and Challenges for Businesses:


  • Cost Savings: Reduce upfront costs associated with purchasing or leasing company vehicles.


  • Flexibility: Offer employees flexibility and convenience by allowing them to use their own vehicles.


  • Maintenance: Potentially lower maintenance costs due to employee ownership.


  • Complexity: Managing grey fleets requires careful tracking of mileage, maintenance, and safety compliance.



Is a Grey Fleet Right for You?


Small businesses with frequent short-distance trips may find grey fleets a suitable option. However, carefully assess your specific needs and consider the potential challenges before making a decision. Effective management and clear policies are essential to maximise the benefits and minimise the risks associated with grey fleets.


How TCH Leasing Will Assist with Grey Fleets


TCH Leasing provides an extensive fleet management solution that can be extended into grey fleet management. We take care of all the admin, maintenance, license checks, and much more. 


Please get in touch with TCH Leasing today to discuss if a grey fleet is a step in the right direction for your business. 







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