Low fuel consumption and running costs can offset a higher initial purchase price, so it’s important you consider them when choosing which company cars to add to your fleet.

Fuel economy and CO2 emissions drive a significant proportion of fleet management cost. To find the right fleet cars for your business, always consider the total cost of ownership.

The most obvious running cost is the fuel used for business travel, but you’ll also need to include service, maintenance and repair costs, as well as Vehicle Excise Duty and fleet insurance.

If a company car is also available to an employee for their private mileage, such as commuting to and from the regular workplace, you will have to pay employer’s Class 1A National Insurance Contributions.

For companies who operate within charging zones, London’s congestion charging zone for example, it’s important to include these costs too.

The example below illustrates some of the costs of running a new SEAT Leon hatchback 1.5 TSI EVO SE Dynamic over 3 years and 60,000 miles with 10,000 business miles per year.

Fuel costs     £3,333    
Servicing and maintenance     £1,526    
Vehicle Excise Duty for years 2 and 3       £300      
Class 1A National Insurance       £2,677        

The cost of insurance can vary significantly but, even before considering this, the fuel costs account for less than 50% of the running costs of the vehicle.

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