Green Fleet and Whole Life Cost

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A well thought out plan taking into account the financial and environmental impact of running a vehicle, and not just the monthly lease payment, should reduce your overall fleet costs.

How will it help your business?

A greener fleet can help you win new contracts and retain customers, especially from large companies and public sector bodies who want to work with businesses who can show the steps they are taking to reduce their carbon footprint.

In addition, adopting Whole Life Cost reduces your overall fleet costs by helping you select vehicles with better fuel consumption and lower tax and National Insurance levels.

Why Fleet Alliance?

Fleet Alliance will help ensure that improving your fleet’s environmental performance will also lead to cost savings.
Fleet Alliance has already helped clients reduce their CO2 emissions by an average of 13% over the last five years.
Coupled with our fuel management solution you can be truly proactive and demonstrate to customers and other stakeholders the progress you are making in reducing your CO2 emissions.
Fleet Alliance understands Whole Life Cost and has helped clients achieve savings using this approach for many years.
The systems Fleet Alliance has developed makes the adoption of Whole Life Cost simple and straight forward.
To help you see the benefits we can provide examples of savings based on the current vehicles on your fleet or a vehicle you are considering.

Green Fleet

To illustrate the cost benefits of choosing a vehicle with CO2 emissions below 160g/km, we compared two Ford Mondeos. Although the 1.8 Edge model costs £865 more to buy, it could cost £2,500 less to run over 3 years and could save the employee over £1,500 in Benefit in Kind (BIK) taxation.

Vehicle	Ford Mondeo 5dr hatch 2.0 Edge	Ford Mondeo 5dr hatch 1.8 Edge
Contract term (months)	36	36
Contract mileage	90,000	90,000
Fuel type	Petrol	Diesel
P11d	£18,300	£19,165
CO2	189	154
Miles per gallon	35.8	48.7
Finance rental	£391.17	£383.53
Service rental	64.66	58.63
Total rental	£455.83	£442.16
Including disallowed VAT	£485.17	£470.92
Lease Rental Restriction	15%	0%
Cost to company*	£16.43	£0.00
Monthly cost*	£501.60	£470.92
Annual Benefit in Kind	£4,575	£4,025
Class 1A National Insurance Contributions	£1,756.80	£1,545.47
Total fuel cost	£9,377	£7,260
Total insurance	£1,860.00	£1,980.00
Total contract cost to company	£31,051.29	£27,738.76
Cost per mile	34.50p	30.82p

* To illustrate the cost benefits of choosing a vehicle with CO2 emissions below 160g/km, we compared two Ford Mondeos. Although the 1.8 Edge model costs £865 more to buy, it could cost £2,500 less to run over 3 years and could save the employee over £1,500 in Benefit in Kind (BIK) taxation.

Whole Life Cost

To show the importance of Whole Life Cost and the savings that can be made, we compared two typical fleet vehicles over a three year contract hire agreement.

Despite the BMW having a higher monthly rental than the Volvo, its lower CO2 output means it's cheaper to operate over the lifetime of the contract by over £2,700.

Multiplied across a typical 50 vehicle fleet, the vehicle with the higher monthly rental would actually save you more than £135,000 over the duration of the contract.

	Volvo S40	BMW 320d
Combined Mile Per Gallon	37.2	68.9
Co2 g/km	176	109
Monthly rental*	£384	£410
Total rental cost*	£14,873	£15,935
Total fuel cost *	£7,249	£3,919
Insurance*	£2,100	£2,100.00
National insurance	£2,145	£1,357
Tax on Lease Rental Restriction*	£497	£0
Whole life cost - over contract	£19,489	£16,785
Whole life cost - per month	£541	£466

* * Monthly rental includes maintenance. Total rental cost includes disallowable VAT. Total fuel cost based on combined MPG. Insurance assumes an average yearly cost of £700. Vehicles compared: Volvo S40 Saloon 2.0 SE Lux 4dr and BWM 320d Efficient Dynamics.