Showing you the true cost of your vehicles.
When it comes to vehicle choice and policy setting, the most commonly used method is to compare and select vehicles based on monthly lease rentals. However, there is a better way. A way where there could be a 'win' for the company and a 'win' for the driver. Our recommendation is that you set your policy based on the Ogilvie True Cost (OTC).
Ogilvie True Cost takes the principle of Whole Life Cost/Total Cost of Ownership as a base and then adds in additional elements that are, incorrectly, not always used in a traditional whole life cost calculation.
The Ogilvie True Cost calculation now also factors in the cost of fuel for electric vehicles. The calculation for EVs takes into account key information such as electric range, battery capacity and the cost of electricity - currently around 15p per kW/h in the UK.
The example below shows the OTC breakdown for two popular vehicles, one combustion engine and one fully electric.
*Both vehicles on a 4-year, 80,000 mile contract
As you can see, Ogilvie True Cost includes the critical costs associated with NIC and then applies the applicable corporation tax saving to these actual and direct costs before adding back in any applicable lease rental restriction. The Ogilvie True Cost then becomes a far more accurate representation of the actual costs associated with the operation of the vehicle and allows a far more precise comparison to be made between different models. To ensure the Ogilvie True Cost is accurate we regularly update the fuel cost and display this on all our quotes. For consistency we use the fuel prices from the HMRC document 'How Advisory Fuel Rates are calculated' and update them when government announces and changes to Advisory Fuel Rates (AFR). Historically announcements are made on or around 1st March, 1st June, 1st September and 1st December each year.
To help you use Ogilvie True Cost as the basis of policy choice, the OTC is shown on each of our individual quotations. This is clearly detailed to help you make the best decision for your company. We can also help you set a car policy that works around Ogilvie True Cost to ensure that all future vehicles maintain the restrictions that you choose.
Most importantly, we can also provide a full, bespoke, online driver quotations system that allows drivers to select only those vehicles that fall within their OTC band. This is now becoming the preferred method of operation for the majority of our clients operating in excess of 50 vehicles.
To find out more about Ogilvie True Cost and to see fully worked examples of how it can work for you, please contact us.