New car finance company

FLEET RISK MANAGEMENT is "an accident waiting to happen", according to HSBC Vehicle Finance's Business Car Expectations Survey 2003.

The survey, conducted by the Centre for Automotive Industries Management at Nottingham Trent University, found that only three-quarters of businesses have policies in place governing driving under the influence of drink, drugs or using mobile phones, while 16% never check their drivers' licences.

Also worrying is the decline in the rate of verifying employees' insurance--only 51% of respondents (down 14%)--check if drivers in their private cars are covered for business usage.

Tim Holmes, head of HSBC Vehicle Finance, said: "Our survey findings are a wake-up call to businesses. With up to one in three drivers using their car for some form of business activity, failure to fully embrace their responsibilities could have far-reaching effects."

On the positive side, over 60% of businesses expect to switch to diesel vehicles in the future as drivers seek to minimise BiK tax. Figures from the Society for Motor Manufacturers and Traders show that diesel car sales have increased for 29 consecutive months and could account for 30% of all new cars sold by the end of 2004.

The introduction of BiK has had many side effects on the industry including the return of previous perk drivers to company cars and an increasing availability of cash-for-car options--20% of respondents now offer a cash alternative compared to 1% in 2000.But this has not resulted in a substantial increase in PCP volumes as drivers remain resistant to taking on the contractual risk.

Contract hire remains the prime method of acquiring cars, with 62% of businesses offering this option. It remains popular with medium-sized fleets but is growing in popularity across the fleet size spectrum.

In the future, HSBC believes that pressure on business costs will draw more attention to methods of acquisition and there will be more take-up of PCP/PCH options though contract hire will remain popular. More attention will be paid to environmental pressures and BiK changes will play an ever-greater role in vehicle choice.

The effects of all these changes on fleet managers will be to make their role more challenging and focused on long-term strategy, says the report.