Whole life cost facts: how to take control of your fleet budget
Our whole life cost method makes understanding company car running costs easy so that you can make smarter fleet choices that don't break the budget.
Don't know what whole life cost is? Read our whole life cost definition first.
Why is whole life cost important for fleet managers?
The whole life cost metric is a powerful tool for fleet managers because:
a) it's based on real-life vehicle simulations
b) it gives the big financial picture in a simple snapshot
c) it takes into account unique variables (mileage, lease term, insurance band, tax implications etc.)
How does whole life cost analysis save fleets money?
Comparing the real-life running costs of vehicles ensures long-term value for money.
Having visibility of all fleet costs helps meet finance targets and accurately predict cash flow. Plus, because a whole life cost assessment takes all the financial elements into consideration, it's easy to review against other important company car factors like vehicle specification, staff preference and green initiates.
A Whole Life Cost Breakdown
Lease rental (also known as finance rental) makes up only 49% of an average vehicle's running costs.*
Without understanding the whole life cost of a leased car it's all too easy to end up paying through the nose in vehicle tax, CO2 emissions, fuel, employers NI... the list goes on. Make that mistake on a whole fleet and there goes the budget.
So, to give you an idea of how those costs are typically split, we've created a graph showing the average whole life costs of running a contract hire car over a 3 year term in the UK:
Looking for more detail? Request the average costs for each segment via our contact form.
Whole life cost in a snapshot
We think whole life cost is a wonderful thing so we've gone the extra mile to make it even easier for you to review your fleet vehicle choices: Covase's cost per mile.
In one elegant snapshot, you’ll be able to see a heat map of which vehicles fit your requirements and will save you the most money long-term.
Your Covase account manager will do the maths, assessing dozens of vehicles, matching them to your needs and then ranking them for you based on their real-life cost per mile.
What you'll end up with is a clear, viable metric to help you make the best possible vehicle choices for your company car fleet.
Request a call back today to see where you could save money without compromising on quality.
* 49% = average finance rental in the UK across a study of 8,490 cars. Figures correct as of July 2014.