Vehicle downtime is a costly and frustrating aspect of fleet management and the combination of ageing vehicles and avoidance of spend on grey fleet maintenance is creating a perfect storm for fleet managers.

New vehicle shortages and supply pressures are forcing many businesses to hold onto ageing vehicles for longer than intended, leading to the increased risk of vehicle off-road (VOR) time. Failing to recognise and address this risk can have significant consequences for business continuity.

Maintenance delay can be a high price to pay

Unplanned vehicle repair and servicing alone costs UK fleet managers an estimated £2.4 billion every year1 and the cost of VOR time can run into hundreds of pounds per day, per vehicle. While it is easy to understand why some businesses are choosing to miss or delay servicing in the current economic climate, this is simply a false economy as it increases the likelihood of unplanned maintenance and, potentially, an even greater length of time for the vehicle to be out of action.

The UK’s average vehicle age is projected to increase from 7.9 to 9.7 years by 2026, leaving 85% of models aged 3+ years and requiring an MOT test.2

The grey area of employee-owned fleet

Grey fleet vehicles—vehicles owned by employees but used for business travel—have been steadily rising in volume post-pandemic, with around 14 million grey fleet vehicles in the UK.3

The use of grey fleet vehicles can also present risks for businesses if the vehicles are not properly maintained. This is not just due to the increased VOR threat, but also from a liability perspective because employers are still responsible for ensuring grey fleet vehicles are safe and adequately maintained. This includes evidence of up-to-date servicing.

Service, maintenance and repair (SMR) spend has increased by more than half since the pandemic, rising from 28% in 2018 to 43% in 2022.4

Ten tips to reduce vehicle off-road time

While supply chain problems and inflated costs are out of fleet managers’ hands, there are plenty of things that can be done to help reduce vehicle downtime.

  1. Regular servicing: Keep up regular servicing and maintenance to ensure sufficient vehicle health and safety. Older and/or high mileage vehicles may need more frequent safety inspections. Daily checks before a vehicle is taken out on the road can catch a potential issue before it escalates.
  2. Prescheduled downtime: Take a proactive approach towards servicing/MOTs and maintenance by taking advantage of forward-booking facilities offered by many garage networks. This can also help you avoid long wait times.
  3. Vehicle leasing: Lease vehicles on a regular renewal basis if possible to ensure timely replacement of vehicles as well as keeping vehicles in warranty.
  4. Simpler repair options: When purchasing new vehicles, consider models that are easier to repair and service given the current supply chain issues/parts shortages.
  5. Audit trails: A robust audit trail of fleet management and maintenance can help to manage vehicle safety risk as well as providing evidence in the event of a future insurance claim.
  6. Courtesy vehicle indemnity periods: Insure your fleet vehicles with a courtesy vehicle included in the policy, ensuring the indemnity periods provided reflect a realistic timescale.
  7. Temporary rentals: Use rental vehicles as reinforcements at peak business times rather than acquiring new vehicles that may be underutilised or sit idle later.
  8. Telematics: Human error is a factor in 95% of all road accidents.5 Encourage safer driving (and therefore wear and tear on the vehicle) through the use of driver training and telematics.
  9. VOR analysis: A data-driven approach can help you to understand if there is a driver that is regularly involved in accidents or a vehicle that requires higher than average repair and maintenance.
  10. Management of grey fleet: Give equal importance to the servicing, maintenance and repair of employee-owned vehicles driven for business use as you do to company vehicles. Where possible, follow the points above to help ensure the safety of the vehicle and driver.

Specialist fleet risk management support

Gallagher offers businesses of all sizes end-to-end fleet risk management services, including gap analysis, driver training, incident and claims analysis, and tailored fleet insurance—often with reduced premiums and/or improvements in policy terms and conditions.

If you would like to speak to our team about how we can help you reduce your overall fleet risk and control your costs, please get in touch with us on 0800 138 7538.

Sources

1. Fleets at higher risk of VOR with MOT delays - Business in the News

2. Safety risk as SMR costs rise | Fleet industry (fleetnews.co.uk)

3. Cost-of-living crisis grey fleet SMR warning for fleets | Fleet industry (fleetnews.co.uk)

4. Safety risk as SMR costs rise | Fleet industry (fleetnews.co.uk)

5. Fleet management | ALARM (alarmrisk.com)

Disclaimer

The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.

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