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6 reasons you should have a plan in place for greening your fleet

plan route vehicle fleet greening
Know where you're going and plan your routes

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22 February 2016

TAKING a green approach to your business and your fleet has many practical benefits, other than pure sustainability and being environmentally responsible.

Yes, there are many benefits that you can gain from PR and a corporate social responsibility point of view, but greening your fleet can also have a huge positive impact on fuel consumption and maintenance costs.

Some believe that in order to be green, the fleet must operate hybrids, pure electrics, or use a clean alternative fuel. All of these alternatives can, indeed, be environmentally friendly; however, in reality, any initiative that significantly reduces a fleet’s environmental impact can be considered green.

With increased Government action and the changing requirements demanded on organisations to make their businesses greener it is wise to take action and adopt a strategy towards greening your fleet. Paul Fincham, Motor Fleet Broker for Bluedrop Services, provides 6 reasons you should be planning to green your fleet.

1 – Greening your fleet will ultimately reduce your costs

Reducing costs is the primary concern of all fleet managers. In the long run a green fleet will save your business money and improve your bottom line, so developing a strategy to green your fleet over time will pay off as time well spent. Investment in a greener fleet will generally mean adopting newer vehicles which are also more likely to have advanced safety features and will be well maintained, saving you money when you consider a whole-life cost model. A greener fleet means that you will achieve improved fuel efficiency and we all know that fuel consumption is one of the major costs associated with running a fleet. Adopting Electric Vehicles (EVs) can generate savings of about 8p per mile in fuel and 20-30% in service, maintenance and repair costs which when considered against the alternatives they can be well worth the initial investment.

2 – Better route planning means better customer service

A green fleet will look to adopt technology to help with route planning and reducing overall mileage. Businesses can look at scheduling their vehicles to save time and be more efficient, meaning that in a logistics scenario the closest vehicle will be deployed, or in every day routing you can avoid delays from traffic or choosing the quickest route to your destination. Ultimately this all equates to improved customer service and overall business reputation which is undeniably priceless.

3 – Fulfilling Government mandates

Over time, various taxes relating to company cars, including Benefit-in-Kind (BIK), Capital Allowances, National Insurance Contributions (NIC) and Vehicle Excise Duty (VED), have been linked by Government to the carbon dioxide emissions by offering savings from choosing vehicles with lower emissions.

Over time we will see tax charges rise for less environmentally friendly vehicles and so you won’t necessarily see this benefit. At the moment, a key benchmark is the 130g/km threshold for Capital Allowances. But taxation thresholds are reducing all the time and the bar is being set lower with each financial year. Planning to have a green fleet by only selecting cars of less than 130g/km is a good move, but targeting 120g/km or lower will ultimately be more financially rewarding.

4 – Minimising your carbon footprint

We have touched on the PR and CSR benefits of greening your fleet, but reducing your carbon footprint could have a dramatic effect on carbon emissions as a whole and contribute towards curbing the wave of global warming. When you consider the amounts of fuel used per year by a business vehicle and then multiply this by the number of vehicles you can potentially hold within your fleet, it is easy to see how just one business can have a huge impact here. Negative effects of global warming include sea levels rising and threatening low-lying areas, crop failures, the extinction of certain ecosystems such as coral reefs, and drying up of vital water resources so everyone will benefit.

5 – You’re due to replace your fleet

You may be due to replace your fleet soon anyway and simply aren’t aware yet of the options available to you. If you find yourself in this situation then you need to be considering the make and model of vehicles you adopt, whilst also taking into account whole life costs. At this point you can also consider investment in vehicle technology to help green your fleet and measure your progress towards meeting your green targets as a business.

6 – You can reduce your fleet insurance premiums

Not only will focusing on going green save the business money in tax and fuel costs, but it will also in turn help to save on your fleet insurance. Fleet insurance costs can be reduced when sustainability and driver safety practices are implemented on a daily basis and proof of these practices can be provided. By driving safer and reducing your risk you can help to positively affect your fleet insurance costs.

  • Paul has 24 years’ experience in the motor insurance industry and has a wealth of knowledge having started within regional broking as an account executive for ten years prior to moving into Underwriting with AXA, LV & Andeva Underwriting Agency Ltd. As Motor Fleet Broker for Bluedrop Services, Paul specialises in Motor Fleet Insurance and offers advice and support to customers managing Motor Fleets.

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