Mercia Fleet Management says employers could save up to 25% by managing the grey fleet correctly compared to paying out mileage claims automatically under the Approved Mileage Allowance Payments (AMAPs) scheme.

The fleet management division of EV salary sacrifice specialist Fleet Evolution calculates it can save around a quarter of the cost of reimbursing grey fleet drivers under AMAPs – as well as managing all the administration involved in running the grey fleet.

“Grey fleet remains a huge area of potential risk but few businesses manage it effectively, meaning they not only expose their employees to unacceptable risks but also waste huge amounts of money,” said Andrew Leech, founder and managing director at Fleet Evolution and head of the Mercia Fleet Management division.

According to the BVRLA, there are an estimated 14 million grey fleet vehicles on UK roads.

Where employees use their own vehicles on company business they can then reclaim business mileage at up to 45p per mile under the AMAPs scheme for the first 10,000 miles, falling to 25p per mile thereafter.

For businesses with significant numbers of grey fleet drivers, the reimbursement costs can be considerable. To bring these costs under greater control, Mercia Grey Fleet Management assesses the need to use privately owned vehicles and evaluates the cost efficiency of using AMAPs, based on a mileage-based decision tree within a dedicated client portal.

If under five miles, a typical recommendation might be to take a taxi, bus or cycle where appropriate. At 15-25 miles, the advice would be to use employee-owned vehicles with checks carried out on vehicle condition and relevant business insurance before allowing use.

From 25-100 miles the decision tree recommends taking the train or consider a taxi, comparing the costs of these alternative means of transport to those likely to be incurred under AMAPs.

And at more than 100 miles, the recommendation would be to use a hire car as the most cost-effective option, with all bookings handled by Mercia Fleet Management administrators.

“It’s easy to see how money can be wasted and employees put at risk,” said Leech. “Imagine a scenario where an employee is asked to make a 150-mile round trip for business in their own car.”

Leech explained: “For a journey of over 100 miles we would recommend using a hire car, which would be pre-authorised within a dedicated client portal.

“The company has peace of mind that the employee is in a brand new vehicle with all the relevant safety checks and latest driver assistance systems.”

They would also be charged around £30 for the car hire and around £20 for the fuel, based on that mileage – giving a total cost of around £50 and a saving of 25% against the AMAPs reimbursement, adds Leech.

The Mercia fleet management division offers a range of services, including fleet policy provision, vehicle acquisition advice, licence checking, risk management, fleet service scheduling, vehicle logistics and daily rental, plus wider mobility services.

“The division was borne out of demand from existing salary sacrifice clients who want deeper levels of bespoke customer service,” said Leech. “We are now rolling it out on a wider level.”