Is It Worth Having A Company Fuel Card?
Company fuel cards can reduce the costs of filling up your business car(s), especially as most of them only work at discounted fuel stations. Fuel cards also take away the time and money spent on administration/accounting needed for a pay and reclaim system.
Read on to find out whether it’s worth having a company fuel card for your business in this guide.
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5 benefits of a company fuel card
There are many benefits to having a company fuel card which can help your business save money when adding fuel to the car. Here are six benefits of a fuel card that could make it the right option for you.
1. Discounted fuel
The biggest benefit of having a company fuel card are the savings that your business gets at the pumps when filling up. Many fuel card providers will notify you a week in advance about the fixed national cost per litre of fuel. This tends to be around 2-3p less than the standard asking price. For motorway prices this will be even more, often around 10p cheaper.
Fuel prices are by their very nature volatile, so paying drivers’ expenses at a rate-per-mile can mean you’re overspending on fuel. Having a fuel card means that you’re always in control of your business’ spend on fuel by ensuring you’re always paying the right price.
These sorts of savings can make a big difference to the finances of a business, especially if the car is being used regularly and on long-distance journeys.
2. Secure fuel purchases
Unlike a business debit or credit card, a company fuel card will be restricted to only allow payments for topping up the vehicle’s tank. What’s more is that most providers will let you assign a fuel card to a specific driver and/or vehicle.
This level of security makes it a lot easier to keep tabs on what each company car is costing the business to run. For larger companies with a fleet of 5-10 vehicles, this can form a part of a fleet management system which looks at reducing fuel consumption.
3. No need for fuel receipts
When you use a company fuel card, there’s no need to keep a record of the payments in the form of receipts.
Each fuel payment will be logged on invoices showing all the transactions made at the pumps. Every week the provider will send you a detailed invoice of the money spent on fuel, which you can request a paper copy of.
From an accounting perspective, this can save a great deal of time by showing you all in one place what your business is spending on fuel. These invoices are HMRC-compliant too, which also means there’s less time needed on admin work.
Remember: Employees will need to pay a tax benefit on fuel purchased for personal use (including commuting to and from work). So, be sure to keep the receipts of any payments for fuel top-ups after any personal journeys, plus an up-to-date record of all personal mileage.
4. Additional services
Many company fuel card providers offer additional services as part of being their customer. For example, certain providers may give you a dedicated account manager or fleet management reports which support you in the running of a fleet of vehicles.
Some cards will also let you pay for things other than just fuel. This can include essential lubricants such as engine oil, credits for nearby car washes and accessories to go with your car.
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5. No charges for certain fuel cards
Some fuel cards are free to get, free to use and won’t include surcharges or minimum spends. Others will charge a small monthly fee per card (about £1.50).
You should compare company fuel cards online to see which cards have the right benefits and pricing to suit the needs of your business.
How much do you save with a company fuel card?
As we mentioned earlier, the amount you save on fuel using a company fuel card can be as much as 10p per litre.
You can use an online savings calculator to work out how much you could save per year on fuel costs for cars, vans and HGVs. However, remember that a lot of the averages are based on all drivers using the best value fuel stations.
As an example, three vehicles with a fuel economy of 42mpg that travel 20,000 miles per year could save an average of £649.44* each year on fuel using a company fuel card.
*Average fuel saving based on the current UK average petrol price of 113p per litre.
How do company fuel cards work?
You should check which fuelling stations your company fuel card works with before using it. Some cards will have larger networks than others, and you can specify whether you would like to have regional, national or international coverage.
When it comes to using the card, all you need to do is follow these 6 steps:
- Find an approved fuel station.
- Fuel your car as needed.
- Show your company fuel card, at which point you’ll be asked for your company car’s registration number.
- You’ll be asked if you want to record the mileage.
- Your card will be swiped for the payment, after which you’ll be asked to sign for the transaction.
- Decide whether or not you want to keep the receipts.
Will I be charged for a company fuel card?
Some providers of company fuel cards will charge a small annual fee of around £18 per card. There could even be a surcharge for using it, which could be based on you spending a minimum amount on fuel when filling up the car.
On the other hand, you can find providers which don’t charge anything for getting a card or using it.
Which fuel card should I choose?
A number of factors will determine which company fuel card is best for your business vehicle, including:
- Where your drivers drive – you can choose a card which allows you to fuel up on regional, national or international networks. National coverage, for example, will be for cards that mostly partner with motorway fuelling stations.
- Type of fuel – some fuel cards specialise in offering better discounts on diesel fuel, petrol or electric car charging.
- Fleet type – the bigger your fleet, the more coverage you’re likely to need from the fuelling network. If you have 50-100 company cars, for example, there are specific cards which let you access more than 3,000 sites.
The best way to find a company fuel card which suits your business is to use an online fuel card comparison tool.
Do you want more information about business car use? Check out our other business car guides for everything you need.
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