Low 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.
To find the most economical cars for your fleet, always consider the actual cost to your business
Running costs make up a significant proportion of the long-term cost of your fleet.
The most obvious running cost is the fuel used for business travel, but you’ll also need to include the costs of servicing and maintenance, Vehicle Excise Duty and insurance.
If the company car is available to your employee for their private mileage – which includes 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 below example illustrates some of the running costs for a SEAT Leon hatchback 1.5 TSI EVO SE Dynamic over 3 years and 60,000 miles, with 10,000 business miles per year.
|Servicing and maintenance||£1,606|
|Vehicle Excise Duty for years 2 and 3||£300|
|Class 1A National Insurance||£2,378|
The cost of insurance can vary significantly between businesses but, even before considering this, the fuel costs account for less than 50% of the running costs of the vehicle.