What has the biggest impact on your company car fleet’s fuel and/or energy costs?
Your immediate answer might be ‘the drivers’.
Savings Begin with Strategy
Companies that are most successful at reducing their premiums and costs have a clear strategy as to how they will reduce the risk across their vehicle fleet, bring down levels of claims and engage in active dialogue with their broker and/or insurer to demonstrate a clear and proactive risk management plan.
Through a risk management strategy, you are not only introducing a culture within your business of safer driving, you are also providing your broker with a far stronger case to negotiate improved terms upon renewal.
- The cars you have on your fleet
- How you purchase fuel for your company cars
- The infrastructure you put in place for your electric vehicles (EVs)
- Your grey fleet (private vehicles being used for business journeys)
- Investments that could bring long-term savings
As driver behaviour matters too, you’ll also find plenty of tips in this guide to share with your drivers on how they can reduce fuel and energy costs.
Did You Know?
A diesel car costs twice as much per mile as an electric car
Typically, the cost of fuel for a diesel car will be double that of an electric car. So, if you are currently spending £100,000 per annum on fuel, you could save £50,000 by moving to electric. And, if your drivers sign up to a cheap overnight tariff with their electricity provider, the electric vehicle (EV) cost could save even more.
Not charging PHEVs significantly impacts mpg and fuel costs
Research suggests that a high proportion of company car drivers do not charge their plug-in hybrid electric vehicles (PHEV) if they are given a fuel card and are, therefore, not incentivised to charge their car. This can result in real world fuel economy of around 30-40mpg rather than being in excess of 100mpg, costing the company three times more.
Reimbursement for business mileage is far cheaper with EVs
If your company reimburses business mileage using HMRC advisory fuel rates (AFR) for petrol and diesel vehicles you’ll be paying far more than reimbursing your electric company car drivers using the HMRC advisory electric rate (AER). For example, a fleet of 100 plug-in hybrid vehicles travelling 5,000 miles per year over a four-year replacement cycle would cost £280,000, based on the AFR rate of 14ppm for a 2.0-litre petrol engine. In contrast, 100 fully electric vehicles being reimbursed for the same mileage at the AER of 7ppm using a home charger would cost £140,000, meaning the company saves £140,000.
Rates as of March 2026.
Strategies for Reducing Fuel and Energy Costs
Vehicle choice
Make sure you have vehicles on your choice list with optimum electric range or, if they’re plug-in hybrid vehicles (PHEV), those that are most fuel efficient. Your choice list should be based on whole life costs, not just the monthly rental, as this can reveal the long-term savings from electric vehicles or more fuel-efficient PHEVs. Be open-minded about manufacturers and look out for those offering other benefits, such as free charge points or free miles.
EV charging
By offering workplace electric vehicle (EV) charging and supporting employees with installing home charge points you can reduce their reliance on the public charging network, which can be up to 10 times more expensive (assuming that it costs just 7p per kWh to charge at home compared to 70p/kWh for a rapid charge at a motorway fuel station).
Setting the Right Policies
Fuel
If you provide employees with fuel cards, and don’t want to incur the HMRC fuel benefit, it is better to deduct business mileage at the HMRC advisory fuel rate and charge the balance to the employee as private mileage. This significantly encourages the employee to drive more fuel efficiently as it affects them financially if they don’t. You should also encourage drivers to utilise the supermarket network and avoid the expensive fuel brands and motorway service stations. Have a policy to ‘splash and dash’ i.e. only fill the tank as much as they need to at premium pumps and locations.
Grey fleet
Encourage the use of pool cars, if available, rather than drivers using their personal vehicle for business journeys (grey fleet usage). That’s because the HMRC reimbursement rate of 45p per mile (as at March 2026) is expensive compared to a journey in a pool car.
Invest to Save
Over and above your investment in your charging infrastructure, it’s also worth looking at other opportunities where making an investment could lead to a reduction in fuel and energy costs over the long term. For example, investing in Telematics, Driver training or Solar panels for EV charging.
Telematics
Understanding the way your vehicles are being driven, such as excessive speed, idling and braking, and then acting on that data can bring significant fuel savings, as well as making your fleet safer.
It’s also a valuable tool to identify any remaining petrol and diesel vehicles that should be replaced by electric vehicles.
Our telematics solution, Advanced Remote Connectivity (ARC), can help you with all of this, as well as providing other additional data that a conventional vehicle tracking system cannot.
Driver training
Whether you opt for on-the-road training, e-learning or a combination of the two, educating your drivers about safe and fuel/energy efficient driving will cut your fuel or electricity costs. It also goes hand-in-hand with fitting telematics to change driver behaviour.
Solar panels for EV charging
Using renewable energy to power your electric vehicles brings both environmental benefits and long-term savings. Options to consider include solar panels on the roof of your office, or a solar-powered carport. Even taking into account construction costs for a solar carport, it’s possible to make a six-figure saving over the lifespan of the facility.
Seven Ways Drivers Can Reduce Fuel and Energy Costs
1. Drive efficiently
Driving at an appropriate speed for the traffic conditions (and within the speed limit), anticipating the road ahead, and avoiding harsh braking and accelerating can all save fuel or increase your car’s range if you’re driving an electric vehicle (EV). On motorways, if you drive at 80mph, rather than 70mph, not only are you breaking the law but you will typically increase fuel consumption by up to 25%.
2. Vehicle maintenance
Servicing your company car in line with the manufacturer’s service schedule will keep your car running at its best and can therefore improve fuel efficiency. If you drive an EV, regular servicing will ensure your battery is in good health so you maintain range and performance. See our guide Maintaining your company vehicle for more advice.
3. Save vehicle weight
The heavier your load, the lower your MPG or EV range. Removing items that you might not need each day, such as golf clubs in your boot or bikes on a bike rack, will save weight and therefore fuel.
4. Limit air con/heating use
The simple mantra ‘heat the driver, not the car’ is worth remembering as having your heater blasting in the winter will affect your car’s fuel consumption or electric range. Similarly, limiting air conditioning use in the summer can increase efficiency.
5. Plan journeys
Plan your business journeys sensibly so you avoid the most expensive public EV chargers and take the most efficient routes by using apps such as A Better Routeplanner (ABRP).
6. Car share
How often have you arrived at a company-wide meeting or training course on your own in a car and seen your colleagues arrive on their own in their car too? Car sharing instead would cut costs and reduce your carbon footprint.
7. Consider alternatives
While some car journeys are necessary, there will be instances when you can find an alternative, which could work out cheaper and more efficient. For example, taking a long train journey rather than driving so you can work while you travel or walking from a train station to an office for a meeting rather than getting stuck in traffic. Or even not travelling in the first place if a video meeting or conference call can be held instead.
How We Can Help
Real-time insights
Our Advanced Remote Connectivity (ARC) solution can provide you with real-time insights about your fleet, including trends in fuel and energy use, dashboard warning lights and service countdown days. What’s more, ARC comes with optional corporate car sharing functionality.
Fleet management
Our fleet management service offers many ways that we can support your business in reducing fuel costs, such as vehicle selection advice, whole life cost calculations, and electric vehicle charging support.
Talk to us for advice tailored to your specific fleet.
VISTA fleet consultancy
Through our VISTA fleet consultancy service we can look at even more sustainable ways of reducing your fuel usage and emissions, and help you shape future employee travel.
