Formula, benchmarks and tools: calculate your fleet utilisation and decide between buying, leasing and renting vehicles.
A car spends the vast majority of its time parked. Fleet utilisation is therefore a key metric when choosing between vehicle ownership, leasing and rental. This guide explains the formula, interpretation benchmarks and tools for measuring the actual use of private or business vehicles.
Key takeaways:
The utilisation rate measures a car’s actual use against its potential, based on driving time or mileage.
Above 60% mileage utilisation or 6,000 miles per year, owning a vehicle generally becomes more cost-effective.
Leasing is suitable for consistent use of 7,500 to 15,000 miles per year, while vehicle rental is better suited to occasional use.
Accurately measuring fleet utilisation and TCO with fleet management tools such as myrentcar helps optimise professional fleet costs.
What is vehicle utilisation?
Vehicle utilisation measures the ratio between a vehicle’s actual use and its maximum theoretical use over a given period. It can be expressed as a percentage of driving time (hours used / hours available) or mileage (miles driven / potential miles).
Vehicle utilisation should not be confused with the vehicle rental turnover rate. Vehicle utilisation measures the proportion of available time during which a vehicle is actually used. The turnover rate measures how frequently the vehicle is rented over a given period.
Why use a fleet utilisation report?
A fleet utilisation report helps you assess how effectively your vehicles are used relative to their cost. Without this measurement, the true cost of vehicle ownership remains theoretical.
In fact, this analysis often reveals an uncomfortable reality. A vehicle can cost more while sitting idle than when being driven. This metric helps individuals and businesses choose between buying, leasing and renting a vehicle.
Optimise the actual cost per mile
Calculating a vehicle’s utilisation rate helps optimise its actual cost per mile. This is essential data for any fleet manager. TCO (Total Cost of Ownership) includes vehicle purchase, insurance, maintenance, fuel, taxation and depreciation. Divide this total by the actual annual mileage to calculate the cost per mile. A vehicle costing £6,000 per year and covering 3,000 miles costs £2 per mile. The same vehicle covering 12,000 miles costs just £0.50 per mile.c
Choose between buying, leasing or renting
LV fleet utilisation tends to favour occasional rental or car sharing. Intensive use can justify buying or leasing instead. We recommend reassessing this decision every year, as mobility habits can change quickly.
How to calculate fleet asset utilisation?
Fleet asset utilisation compares a vehicle’s actual use with a defined theoretical benchmark. For mileage-based calculations, 9,000 miles per year can be used as a reference point. Alternatively, eight hours of daily use can serve as a theoretical maximum for time-based calculations. The result is expressed as a percentage.
The basic formula (hours or miles travelled)
There are two main methods:
- Time-based: (hours driven / hours available) × 100
- Mileage-based: (miles travelled / theoretical mileage) × 100
Several tools can be used to measure car utilisation. These include manual odometer readings, onboard telematics devices and smartphone tracking apps. Fleet management software such as myrentcar can centralise this data and show you how to improve fleet utilisation.
Example calculation
Marie drives 4,500 miles per year in her city car. Compared with a theoretical 9,000 miles, her mileage-based utilisation rate is 50%. In terms of driving time, she uses her car for 48 minutes per day. This represents around 10% of the available time. Together, these figures provide a useful basis for deciding whether to own, lease or rent a vehicle.
Which fleet utilisation metrics justify vehicle ownership?
Fleet utilisation metrics can help determine whether owning a vehicle is financially worthwhile. A mileage utilisation rate above 60%, or more than 6,000 miles per year, combined with over one hour of daily driving, can justify ownership. Below these thresholds, occasional vehicle rental or car sharing may be more cost-effective. Optimal asset utilisation across fleets also depends on the tax environment, particularly for business and public sector fleet utilisation.
At what point does leasing become more cost-effective
Leasing becomes more cost-effective than buying outright when annual mileage remains consistently between 7,500 and 15,000 miles. This is particularly relevant when replacing the vehicle every two to four years. However, if you choose a long-term lease for intensive use, select an allowance above 9,000 miles per year. This can help you avoid significant excess mileage charges at the end of the contract.
Comparing leasing and buying
| Option | Term | Recommended miles/year | Profile |
| Outright purchase | Unlimited | 9,000 | High utilisation over a long period |
| Leasing | 24–48 months | 7,500–15,000 | Predictable usage with no need to resell |
| Rental | 1–90 days | < 3,000 | Occasional use |
How to include resale value in a vehicle utilisation spreadsheet
A vehicle utilisation spreadsheet can include resale value to provide a more accurate calculation of a vehicle’s TCO. Resale value represents a significant proportion of the original purchase price after several years. It varies depending on the model and brand.
Use the following formula to include it in your TCO, taking the utilisation rate into account:
- Actual cost of ownership = (purchase price – resale value + running costs) / total miles driven
Valuing your car
Vehicle valuation depends on several factors, including actual mileage, condition, specification and location. A low-mileage vehicle, covering less than 5,000 miles per year, may retain its value better than a vehicle with average mileage. For fleet professionals, myrentcar can incorporate a vehicle’s resale value directly into leasing calculations, helping automate rental rate calculations.
Private cars are driven for only a small proportion of the available time, typically less than one hour per day on average. In terms of mileage, the average is around 7,500 miles per year. This represents approximately 80% of a theoretical 9,000-mile benchmark. However, these figures vary significantly depending on location, lifestyle and driving habits.
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