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April 2, 2017

Grey Fleet Giving You Grey Hairs?

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Grey Fleet is something that many organisations, particularly in the Not For Profit sector, may not immediately recognise they are using. If you are allowing your employees to drive their own cars for work purposes, guess what? You are using Grey Fleet.

On the face of it Grey Fleet seems to be a solution to many fleet problems: the organisation doesn’t have to own or finance any vehicle purchases, maintenance and running expenses are looked after by employees and if the employee leaves their work, the car goes with them. Accounting can seem pretty easy too as you simply reimburse the employee for the kms that they drive for your business.

Sound dreamy? Well hang on there a second. The perceivable savings in administration burden are well and truly extinguished by the risk now posed to your organisation. Let’s break it down:

Cars are now considered part of the office under WHS laws and, as an employer, it is your responsibility to provide each employee with a safe working environment, even cars.

The Grey area of Grey Fleet is highlighted by the following questions:

  • Is the car registered ?
  • Is the car safe and roadworthy?
  • When was the car last serviced?
  • Is the car fit for purpose?
  • Are client’s/customers being transported?
  • Is the car insured?
  • Is the car insured for work purposes?
  • What safety rating does the car have? Does that match company policy?
  • Can the vehicle be located in an emergency?
  • Can other employees drive the vehicle?
  • What happens if that employee is away sick?
  • How often is the car actually being used?
  • Does the vehicle represent the organisation’s brand?
  • Is the vehicle under finance?
  • What happens if the vehicle is repossessed?
  • What happens if the vehicle is written off? Is the organisation liable?
  • What happens if the vehicle is stolen? Is the organisation liable?
  • In whose name is the vehicle held?

The above is certainly not an exhaustive list, but all should be easily answered in the case of a properly managed fleet and overarching fleet policy; however Grey Fleet falls out of this controlled area meaning that the collection and monitoring of any of this data is difficult (there goes the admin saving) and failure to answer any of the above questions properly can pose a major risk for your organisation and any Director’s liability.

We understand that, particularly in the NFP sector, finding funding for cars is difficult but taking on risk of this level is not something that any organisation should look at as a long standing policy (if at all). Leasing either new or used vehicles, whether for individuals or the organisation, through a fleet management company will provide proper fleet policy and oversight on all of the above potential risks and, if your organisation simply does not have the funding to maintain monthly lease rentals then have a look a car sharing systems like CARL

There are plenty of good fleet tools available to ensure that your fleet can minimise risk across the board without exposing yourself to Grey Fleet.

So ask yourself one more question: Is Grey Fleet really worth the risk? 

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