Cost-conscious fleet bosses and company car drivers cut emissions and mileage

Cost-conscious fleet decision-makers and company car drivers are choosing low emission vehicles in record numbers and continuing to travel fewer miles. These are the conclusions of new analysis by contract hire and leasing company ALD Automotive, which reports that:

In the first nine months of 2009 average CO2 emissions of new company cars added to its fleet have dropped to an all-time low of 147 g/km.
The average annual contracted mileage for company cars this year is 18,127 miles.

Recession, the focus on cost management by businesses and individuals alike, the introduction of new corporation tax rules in April and employees striving to cut their benefit-in-kind tax bills by choosing to drive one of the increasing number of low emission vehicles being introduced by motor manufacturers are all manifesting themselves in greener corporate motoring. Since ALD began its CO2 data emissions analysis in 2003 it has seen average new car emissions cut by 20 g/km from 167 g/km to September 2009 (see chart).

In 2003, according to Society of Motor Manufacturers and Traders data, average new car CO2 emissions were 172.1 g/km. To-date in 2009 average new car CO2 emissions have reduced to 150.2 g/km which, even allowing for the impact of the scrappage scheme and its influence on consumers buying new small cars, it means ALD fleet customers are ahead of the overall new car market in the acquisition of eco-friendly cars.

Meanwhile, since ALD began its analysis of company cars added to its fleet, organisations are clocking up fewer miles. In 2003, the average annual contracted mileage for company cars was 22,475 miles, but in the first nine months of 2009 the average has dropped to 18,127 miles - a reduction of 4,348 miles in seven years.

By way of a comparison, in January 2003 the average company car supplied by ALD had a CO2 emissions figure of 166.9 g/km and was likely to clock up 23,782 miles a year. Last month (September 2009) the comparative figures were 147.6 g/km and 17,529 miles - an emissions reduction of 19.3 g/km and a contracted mileage reduction of 6,253 miles.

Company car average CO2 emissions and contracted annual mileage 2003-09

Year                            CO2 (g/km)                Mileage

2009 (Jan-September)               146.9               18,127
2008                                        150.5               19,049
2007                                        155.8               17,198
2006                                        154.7               19,658
2005                                        161.4               22,108
2004                                        167.9               21,592
2003                                        166.8               22,475

ALD published the data as the UKs Committee on Climate Change, the independent organisation which advises the Government on emissions targets, called for a step change in CO2 reduction. The Government has set a target for the carbon-efficiency of new cars can to be on average 95 g/km by 2020.

COST-CONSCIOUS FLEET BOSSES AND COMPANY CAR DRIVERS CUT EMISSIONS AND MILEAGE

In the last 12 months, ALD has also seen a significant move to sub 160 g/km as fleets changes company car choice lists to take account of Aprils arrival of capital allowance changes promoting greener motoring.

In some cases fleets have set a company car emissions cap at 160 g/km - the threshold at which higher capital allowances kick-in - after taking on board advice from ALD, where total cost of ownership financial modelling was carried out with a number of customers to highlight the potential increase in costs of choosing company cars above that level.

Demand for company cars with CO2 emissions above the 160 g/km capital allowance threshold has dropped in the last few months to an all-time low of below 10%. In September 2008, the average new car CO2 figure for a car supplied by ALD was 151 g/km - since then the average monthly figure has consistently been below 150 g/km.

And, with the choice of low emission cars from a wide range of manufacturers increasing month-by-month, ALD marketing director David Yates expects the downward shift to continue.

The low emission drive, he says will be further influenced by the April 1, 2010 introduction of the Governments new first year Vehicle Excise Duty rate. That will see cars with emissions of 130 g/km subjected to a 0 first-year VED rate escalating through a series of bands to a first year rate of 950 for cars over 255 g/km.

Mr Yates said: Vehicle technology and fiscal tax regimes will continue to drive the trend towards low emission company cars. Meanwhile, the recession has increased businesses focus on cost control and that is influencing vehicle use.

Fuel is the second biggest vehicle expense after depreciation, so by encouraging drivers to think if a journey is necessary and making mileage management a key fleet performance indicator, companies are also able to save cash.