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Company fleets: how is the cost of using vehicles changing?

While prices are soaring in many sectors, inflation spares corporate fleets. Better still, the cost of a company vehicle is back to 2012 levels. After three years of increase between 2017 and 2019, the trend was reversed last year. This good news is carried by the Arval Mobility Observatory, the BNP Paribas think tank which measures the evolution of costs in fleets every year. To assess automotive budgets, its experts have developed the concept of TCO (Total Cost of Ownership), which takes into account all expenses related to the operation of a vehicle in order to understand its total weight and be able to compare it with other models on an equivalent basis. Ten years ago, the Arval Mobility Observatory seized on this concept to create the TCO Scope, an annual barometer dedicated to studying changes in ownership costs.

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Read the fileCar fleet: the big changes

In 2020, the average cost price per kilometer (PRK) was €0.372 including tax. This indicator was calculated from the weighted average total cost of a sample of 267,656 cars with an annual mileage of 25,000 km, i.e. long-term rental contracts of 48 months and 100,000 km. This PRK is down 5.1% compared to 2019 but has not yet returned to its lowest level of 2016. were carried out on the basis of the average price per liter in 2020, i.e. approximately 1.34 euros including tax per liter of petrol (14 cents less compared to 2019), 1.26 euros per liter of diesel (18 cents less compared to 2019) and, for electric vehicles, an amount of 2 euros per 100 km (identical to 2019). The current surge in oil prices, however, suggests an increase in the PRK for the year 2021. Another explanation is the increasingly marked presence of electric vehicles in company car fleets, which has a downward influence on taxation and on the interview.

Depreciation

In 2020, the weighted average total cost reached 37,520 euros, compared to 39,301 euros in 2019. Depreciation of the vehicle, financial costs, maintenance, tires, insurance, energy, tax and social charges, all positions go down. On the other hand, the respective weight of these different positions does not change. Main component of the TCO, the depreciation expresses the difference between the purchase price of the vehicle and its foreseeable resale value at the end of the 48 months of ownership, a concept expressed under the name of residual value by long-term rental companies. In 2020, the amount of the impairment was set at €15,041, i.e. a decrease of 4.51%, compared to +1.96% in 2019 and +7% in 2018.

Enterprise Fleets: How the cost of vehicle use

Second item of expenditure for fleets, tax and social charges account for 23.20% of TCO. This budget includes TVS, non-deductible depreciation and social charges on benefits in kind. “The State and social organizations represent a significant weight in the cost of using a fleet of private vehicles”, estimates the think-tank. This part is all the more important as the non-deductible VAT on the purchases of goods and services is not taken into account while it represents an additional cost of 20% for this item. Nevertheless, this budget is also down (- 1.98% to 8,719 euros). With a wider focus, the situation seems less favourable, since this item increased by 11.62% between 2012 and 2020.

With 7,207 euros and 19.22% of the TCO, maintenance, including tires and insurance, forms the third budget mass. Here again, this item dipped and lost 2.1%. With the exception of 2016, 2020 is the year when this item will have been the lowest. Energy comes in fourth place with 13.63% of the cost of using a vehicle. In value, it represents 5,113 euros, compared to 5,918 euros in 2019, i.e. a decrease of 13.6%. This trend is explained by falling prices at the pump over the period considered. Notable fact: between 2012 and 2020, the weight of energy in total PRK fell by 5.37%.

Also readElectric vehicles: not all charging stations are created equal

The TCO Scope also analyzes the evolution of costs according to the segments of the automotive market. With the exception of the upper segment (Audi Q5 type), all PRKs are down. Compared to 2019, the Eco segment (Renault Twingo) shows the largest drop (-7.55%, to 0.245 euro including tax/km) followed by the lower segment (Renault Clio) (-4.76% to 0.280 euro including tax/ km) and the upper middle segment (VW Tiguan) (- 2.61% to 0.448 euro incl. tax/km). The PRO of the lower middle segment (Peugeot 308) does not move in 2020, at 0.417 euro including tax/km, when that of the upper segment appreciates by 3.8%, at 0.634 euro including tax/km.

According to the Arval Mobility Observatory, this general decline is explained by the decline in petrol engines, which emit more CO2 and consume more fuel, in favor of electrified models with higher tax rates. favorable and for some of them more sober. Between 2012 and 2020, the luxury segment (BMW X5) is the only one to see its TCO drop (-6.72%). Over the same period, upper (+ 18.1%) and lower middle (+ 11.2%) progressed by a double-digit percentage.

Offering a complete overview, the TCO of vehicles should not obscure the other costs of operating a fleet: administrative, management and organizational tasks. According to a study by SesamLLD, the union of long-term rental companies, 58 hours are needed per year and per vehicle to carry out these tasks. Above all, driver behavior is key to controlling costs. Bad practices can increase the TCO by 40%.

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