The UK is going green: the availability of electric and plug-in vehicles is increasing month by month and if you want to know what’s coming, just read our report The electric and plug-in electric cars arriving in 2021. By the same token, the future of new petrol and diesel cars and vans is clear: they are set to disappear from showrooms by 2030 – less than a decade away.
So why consider electrification?
Electric vehicle technology is helping to cut carbon and costs for both companies and drivers, so the sooner fleets change, the more they can benefit, while also improving local air quality. It offers companies a double win.
Electric vehicles tend to be much more efficient than petrol or diesel cars, with no energy losses from burning fuel; power goes directly from the battery to the wheels, which can even be recharged during braking. Typically, electric vehicles return fuel economy equivalent to more than 100mpg in a petrol or diesel car.
Secondly, there are long-term tax incentives that are transforming the running cost equation compared with current petrol and diesel vehicles.
Drivers of electric cars pay just 1% benefit-in-kind tax currently, which in turn slashes Class 1A National Insurance contributions for businesses. Even a small fleet stands to gain thousands of pounds in savings.
For example, a fleet of 100 cars moving from diesel business contract hire to hybrid flexible rental can save at least £5600 per month. That’s right: £5600 saved just on Class 1a NIC. Even for a small fleet of 10 vehicles the savings are still worthwhile at £560 a month or £6720 per year (see our table lower down – based on drivers swapping from a diesel Ford Focus to a plug-in hybrid Audi A3).
Using the same example, the driver BIK savings switching from diesel to plug-in hybrid are £164 a month – that’s nearly £2000 a year. Now, who wouldn’t want that?
So how do you switch to greener vehicles?
This is where flexible rental comes in. Car technology is constantly changing, but companies can seize the advantages of electrification immediately, by using flexible hire to lower costs instantly, without the straitjacket of long-term commitments that extend over two, three or four years.
As the technology improves further, then flexible rental allows you to swap into better, more efficient cars as soon as they are on the market – rather than waiting until the end of the vehicle’s lifecycle.
There’s quick availability, too, with no large rentals in advance – just one month is all that is required – and fleets can then start to transition to greater savings, and drivers benefit from substantial tax savings while preserving cash in the business.
Why flexible rental is really useful right now
A further benefit of flexible rental is the capability it provides fleets to quickly add vehicles when needed, swap them, or hand them back at any time without penalty.
Those flexible benefits are particularly pertinent right now. As coronavirus restrictions come to an end, every company is likely to experience soaring demand as the economy starts to recover. Businesses need to be in the starting blocks to quickly meet customer needs – flexible rental ensures the fleet can quickly grow, without directors having to worry about long-term financial commitments when they should be concentrating on recovery.
Furthermore, they can add the newest, cleanest, most efficient vehicles, to ensure they are always compliant with new Low Emission Zones being launched in cities throughout the country this year.
The second relates to electric vehicles and new technology: companies face an Alphabetti Spaghetti of new powertrains when it comes to choosing new vehicles. Try these: BEV, PHEV, MHEV, HEV, REEV, REM, HFCV; which is right for your business and, more importantly, which is best for long-term use? Change is coming, but flexible hire ensures you can reshape your business transport without worrying that a wrong decision on vehicle technology will dog the business for years.
Flexible vehicle hire is a simple solution to de-risk fleets and it is a great way to test new strategies or support business expansion cost-effectively. It allows companies to embrace opportunities for growth as they emerge, while protecting the business from unnecessary costs if circumstances change.
Case study: How CBVC delivered plug-in savings for a 100-vehicle fleet
A CBVC Vehicle Management customer replaced 100 diesel fuelled rental vehicles and saved the business and its drivers a substantial amount in NI and BIK. The comparisons speak for themselves, with typical reductions of more than £250 per vehicle per month – see the table below.
|Model||Power||CO2||P11D||BIK@40% pm||Class 1a NI|
|Audi A3 Sportback 40 TFSI Sport||PHEV||25||£34,070||£79.50||£27.43|
|Skoda Octavia iV Hatch||PHEV||21||£33,280||£77.66||£26.79|
|Ford Focus 1.5 EcoBlue ST Line Edition||Diesel||121||£26,145||£244.02||£83.49|
|Ford Mondeo 2.0 EcoBlue ST Line Edition||Diesel||130||£27,935||£279.34||£96.38|
|Values correct as of 25 June 2021. P11D & BIK figures are for a basic car plus metallic paint – tax year 2021/22.|
It demonstrates the saving power that flexible rental can deliver – for both business and driver – while lowering the carbon footprint of the company. At the same time, it de-risks the business from the potential of economic downswings – or future pandemics that may damage the world economy.
How to switch to flexible rental
Flexible vehicle hire is like air suspension for your fleet; it smooths out the peaks and troughs on the road ahead for businesses, allowing you to reshape your fleet to make the most of future opportunities and adapt to new challenges.
For a detailed discussion about the benefits of flexible rental for your business, contact Andrew Baker or Julie Hayes on 01283 351200.