As we approach the halfway point in the year, reducing fleet costs remains a high priority for business owners and fleet managers. With inflation driving up vehicle rates, many businesses, particularly those with small to medium-sized fleets, are feeling the strain.
According to recent research from the BVRLA Industry Outlook Report, 64% of fleet decision-makers stated cost reduction at the top of their agenda, nearly twice as important as any other strategic concern.
If you’re managing a fleet of between 100 and 250 cars, you’re not alone facing these challenges.
Let’s explore the practical and effective ways to cut costs without compromising on quality, safety, or employee satisfaction.
Why reducing fleet costs is the top priority in 2025
The cost of acquiring new company cars is increasing significantly due to inflation.
This rise also follows the Autumn Budget update in October 2024, which introduced higher expenses regardless of how the company cars are provided.
While environmental sustainability and the transition to Electric Vehicles (EVs) remain essential, they’ve taken a back seat to financial sustainability. The transition to EVs ranks only third in strategic priorities for fleets this year, according to the report.
Most small to medium-sized businesses are confident they can still source the vehicles they need without being forced into EVs by the Zero Emission Vehicle (ZEV) Mandate.
So, how can your business stay ahead and keep fleet costs under control?
A blended car solution could be a good option. To learn more about the benefits, read our blog: The Advantages of a Blended Car Benefit Solution.
Five of the best ways to save on your company car fleet
1. Reassess your fleet policy
Start by reviewing your current fleet policy. Are all vehicles being used efficiently? Are there cars that could be removed or shared? A leaner fleet is often a more cost-effective one.
2. Consider salary sacrifice schemes
Salary sacrifice schemes are a win-win for you and your employees. These schemes allow employees to lease a car by agreeing to reduce their gross salary. For employers, this can reduce National Insurance contributions and improve employee retention.
3. Extend vehicle replacement cycles
Instead of replacing vehicles every three years, consider extending the cycle to four or five years. Modern cars are more reliable and efficient than ever, and expanding the replacement cycle can significantly reduce costs.
4. Explore flexible company car options
Traditional business car leasing models may not offer the flexibility your business needs. Consider other options that enable you to scale your fleet up or down according to demand.
5. Use data to drive decisions
Analyse your fleet’s performance regularly to identify trends, inefficiencies, and opportunities for improvement.
Recent changes to the Zero Emissions Vehicle (ZEV) Mandate
The Labour Government planned to phase out the sale of new petrol and diesel cars by 2030, but in April, it was announced that the sale of Hybrid Electric Vehicles (HEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) would continue until 2035.
That said, Benefit-in-Kind (BiK) rates are steadily increasing for all EVs as we move towards the deadline, and PHEV emissions are currently undergoing retesting, which means an increase to their BiK rates in line with their CO2 emission increases.
To learn more about all the tax changes that came into play this April, read our blog: Everything You Need to Know About the Plug-in Hybrid Company Car Tax Increase.
Why EVs might not be suitable for everyone at this time
While EVs are a vital part of the future, they’re not always the most cost-effective option in the short term, especially for small to medium fleets. The upfront costs, charging infrastructure, and range limitations can create a number of challenges.
Interestingly, in the BVRLA report, 80% of businesses surveyed said they don’t feel pressured to order EVs just to meet manufacturer quotas. Only 27% reported difficulties in sourcing the vehicles they want. This suggests that many fleets still have the flexibility to choose the right vehicles for their specific business needs.
That said, EVs can still be a wise long-term investment, particularly when combined with salary sacrifice schemes and government incentives. The key to a successful transition is to proceed at a pace that aligns with your business’s financial goals.
Partnering with the right company car provider
Choosing the right partner can make all the difference. Car Benefit Solutions offers a range of services designed to help you manage your fleets more efficiently and cost-effectively.
Employee Car Ownership Schemes
One of the primary benefits of ECOS is the absence of company car tax. By transferring ownership to employees, ECOS eliminates this tax burden, resulting in significant savings for both you as the employer and your employees.
Salary Sacrifice Cars
Your Class 1 National Insurance Contributions (NICs) are reduced as the amount of the car payment reduces your employee’s gross salary.
Car Allowance*
You can manage and predict costs by providing a fixed car allowance instead of maintaining a fleet of company cars, which can have variable expenses.
*Can be added alongside any of our other solutions.
Cost-efficiency with CBS
In 2025, cost control isn’t just a priority – it’s a necessity. For businesses, managing a company car fleet efficiently can unlock significant savings and improve overall business resilience.
By reassessing your fleet policy and embracing flexible solutions, you can reduce costs without sacrificing quality or employee satisfaction.
you’re ready to take the next step, partnering with us can help you navigate the road ahead with confidence. Get in touch to find out how we can help.
Business Fleet: FAQs
What’s the most effective way to reduce fleet costs quickly?
Start by reviewing your fleet policy and identifying under-utilised vehicles. Implementing a salary sacrifice scheme can also deliver immediate tax and NICs savings.
Are salary sacrifice schemes suitable for small businesses?
Yes, they’re scalable and can be tailored to suit businesses of all sizes.
Should my business switch to electric vehicles now?
While EVs offer long-term savings, they may not be the most cost-effective option for every business at present. Evaluate your needs and transition gradually.