The fleet manager’s guide to whole-life costs

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Whole-life costs offer a complete oversight of a company car purchase

Knowing a company car’s whole-life costs helps fleet managers and user-choosers make the right choice

The reduced running costs of all-electric models (like the Kia EV6) are a compelling lure for fleet managers

Petrol and plug-in hybrid models (like the Kia Sportage) have a lower initial purchase price for fleet managers

The Kia Niro is the best of all worlds for company car drivers, with petrol, PHEV and electric variants

Compact all-electric cars – like the Soul EV – are now more capable than ever as company cars

Electric cars are typically easier – and more cost-effective – to service, reducing variable costs

Home and public charging can reduce daily company car running costs significantly

Home charging makes life easier for company car drivers, starting every trip with a full ‘tank’

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Think of fleet ‘whole-life costs’ as the complete ownership picture. Split between your fixed costs and your flexible costs, it encompasses the entire lifespan of the company cars in your fleet from day one to de-fleet.

That means an oversight of everything from the total cost of acquisition and depreciation, through to servicing and maintenance, company car tax, insurance, and fuel (or electricity, of course).

The further you can plan ahead, the better position you’ll be in at the end of a typical three to five-year period. Careful forecasting can exponentially improve your fleet’s efficiency, your bottom line, and will help you identify the strengths of an all-electric solution for your business.

And that’s where Kia Business comes in. Kia’s wealth of fleet and company car experience and expertise – allied to the brand’s confidence-inspiring residual values, ultra-efficient vehicles and dedicated aftersales services (including Kia Business Service Promise and Kia Charge) – ensure that you’re always ahead of the curve. Let’s take a closer look.

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Fixed costs: always consider the cost of acquisition

Whatever type of company car you’re planning to add to your fleet – petrol, diesel, hybrid or electric – you’ll need to consider the balance of your upfront expenditure vs. long-term costs.

You’ll pay a slight premium for the advanced battery tech in all-electric and hybrid models. But, they’re likely to cost you less to run over their lifespan compared to a petrol or diesel – with big long-term savings coming through fewer maintenance costs, reduced or free road tax and lower BIK rates.

“There’s no doubt that the upfront acquisition cost of an all-electric car or a plug-in hybrid (PHEV) is higher than its pure petrol equivalent,” says John Hargreaves, Kia’s head of fleet and remarketing. “However, over the lifetime of the vehicle, there will be other factors that will compensate for the initial higher acquisition costs. It’s worth remembering certain tax benefits are immediately applicable to new EVs and PHEVs, and company National Insurance Contributions reduce significantly with vehicles producing little to no tailpipe emissions.”

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Using Kia’s heartland family SUV as an example, the entry-level Kia Sportage 1.6 T-GDi 2 costs from just £27,800 OTR. Producing 152g/km of CO2, you can expect BIK rates as low as £158 per month for a 20 per cent taxpayer or £317 per month for a 40 per cent taxpayer.

Alternatively, you can add a bit of electrification with the Kia Sportage Plug-In Hybrid. Starting from £39,910, it benefits from an incredibly low 25g/km of CO2, sending your BIK rates plummeting to just £53 per month for a for a 20 per cent taxpayer and £106 per month for a 40 per cent taxpayer.

Thanks to an electric range of up to 43 miles – and the fact that an average fleet driver will only do around 20-45 miles on a typical day – the Kia Sportage Plug-In Hybrid can do many of its daily journeys on electric power alone, meaning drivers can significantly reduce their running costs by cutting down on trips to the petrol station making the most of cost-effective home charging, instead. More on that later.