Company cars

What is a grey fleet?


A grey fleet is when private cars are used for business purposes, and employees are paid a fixed mileage allowance.

Benefits of a grey fleet

Private cars may be a more convenient option than company cars, particularly if you have staff who travel short distances or travel infrequently for business.

A grey fleet requires less administration and can be cheaper to operate, but it needs careful management.

Risks of a grey fleet

Grey fleet vehicles are usually older and therefore create higher emissions than a typical company car or daily rental vehicle. Grey fleet emissions are included in calculating your carbon footprint, so you should look carefully at the impact of grey fleet travel on your total emissions.

Grey fleet mileage can be unnecessarily high in some businesses. Many lower cost and convenient alternatives are available to reduce grey fleet mileage.

How to manage a grey fleet

You must make sure that all your grey fleet vehicles are properly serviced, maintained and insured for business use. Before any privately-owned vehicle is used for company business, its owner must provide:

  • a copy of a valid insurance certificate including cover for business use
  • a copy of the driver's licence
  • a signed declaration that the vehicle is fully serviced and maintained to the manufacturer's standards
  • a valid MOT certificate for vehicles more than three years old

You should keep good records that relate to your grey fleet. Hold documents on file for 12 months. It is the driver's responsibility to provide updated documentation if they lapse or if the vehicle is changed.

Grey fleet health and safety responsibilities

You have the same duty of care to grey fleet drivers as to company car drivers.

You must ensure that:

  • the car is fit for purpose
  • the car has a valid MOT (if applicable)
  • the car is insured for business use
  • the employee has a valid driving licence

When private cars are used for business purposes, they must meet:

  • New Car Assessment Programme (NCAP) 4 star rating for adult occupant safety
  • Euro 3 emissions standards
  • your stated business CO2 emissions levels policy