Take control of your fleet budget

The whole life cost of a car is its total running costs over a set time period.

On a leased car, that will be the cost to lease it, use it, maintain it and tax it, typically over a contract term of 36 months.

Our whole life cost metric gives you total visibility of your company cars’ running costs so that you can make smarter fleet choices that you know with certainty won’t breach your budget.

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 (or finance rental) makes up only 59% 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.

Here’s an idea of how running costs are typically split on a contract hire car over a 3 year term in the UK:

Whole life cost breakdown for vehicle fleets
Simon Homer, Covase Director

- Simon Homer, Covase Director

“Genuine advice, particularly for leasing, isn’t plentiful in our industry. Many people are shocked to hear that lease rental accounts for less than 60% of the average fleet’s total running costs. That’s why we use real-life simulations, so that companies can plan ahead and make smarter fleet choices.”

Consider This…

You are an SME using a grade system for your vehicle lists. Those grades are based on lease rental. The problem with this traditional banding method is that all the vehicle in one band could have huge variations in their whole life cost.

We often see cars in widely different bands costing the company the same to run in reality. The power of the WLC model gives businesses more control over their spending but also opens up vehicle choice in many cases. For example, we often see EVs only in higher grades when we take on new clients basing their bands on lease rental. Once a WLC review is completed and grades are updated to a WLC model, EVs (as well as higher-end manufacturer options) pop-up in lower grades.

It’s a positive change for the whole business: it’s good for the business to have a better handle on costs; from a HR perspective, it’s a no-brainer seeing the car benefit increase in value, and lastly; it’s great for drivers, who receive better quality/spec vehicles and wider choice.

If you’re ready to converting your grading to a WLC approach, our team are ready to help.