April 22 is Earth Day – a day when many organizations debate the value of going "green" and often believe it is cost prohibitive to reduce greenhouse gas (GHG) emissions. However, a recent PHH Arval case study shows that going green can actually generate cost savings.
"When fleets aggressively pursue environmental goals, they generally result in lower fuel consumption – and lower fuel costs," said George Kilroy, President and CEO of PHH Arval. "In the years since we led the way with green programs for fleets, our clients have been achieving measurable reductions in both emissions and total operating costs."
In the analysis, PHH Arval compared the fuel economy for a client's legacy and replacement vehicle models. Based on the fleet's actual mileage patterns and fuel consumption, the client was achieving 23.5 mpg with the legacy vehicles compared with 26.6 mpg with its replacement vehicles. This 13.2 percent improvement equaled an 11.7 percent reduction in fuel consumption, or 109 fewer gallons of fuel consumed per vehicle per year.
At an average national pump price (at the time the analysis was conducted) of $3.45 per gallon, PHH Arval projected savings of $375 in fuel cost per vehicle for calendar year 2011, or $151,125 for the client's fleet of 403 vehicles. At today's higher pump prices, which average $3.89 nationally, those savings are even greater. PHH Arval also estimated that the client would reduce its GHGs by one metric ton per vehicle for 2011.