Thousands of company car drivers are underestimating the distances they travel each year by thousands of miles, leading to huge additional costs for their employers.

According to Flexible Vehicle Contracts, many clients are opting for the lowest possible mileage contracts for their vehicles but soon find that it's a false economy.

The company has now launched a service that helps companies keep track of mileage each month and, if they are in danger of exceeding their limits, give them an opportunity to re-negotiate the terms of the contract to make it more cost-effective.

Phil Roberts, managing director of Staffordshire-based Flexible Vehicle Contracts said: "We are advising all of our clients to be realistic with their mileage predictions.

"During the month of June, Flexible Vehicle Contracts actively questioned each potential new client about their anticipated mileage per annum. A surprising 65% actually altered their annual mileage predictions upwards from an average 10,000 miles per annum to 14,500 per annum.

"We have noticed a trend for clients to go for the lowest possible mileage contracts partly to keep monthly costs low but more because they are actually unaware of the mileages each year they cover. Ten thousand miles gives you an average of only 27 miles per day.

"We are launching an email and text service to our clients to keep tabs on their mileages. Each month they will send us their recorded mileage and we will project if they are over their projected mileage and discuss it with them. If the case is that the mileages have been predicted incorrectly we will help them re-negotiate their annual mileage." This service is being offered on both the short-term contracts and the traditional 2 and 3 leasing products.

He added: "Seeing a trend early is important in helping our clients keep their costs down. We do not like clients ending up with excess mileage costs at the end of a contract. It's all about giving them the information to help themselves keep on top of their costs.

"The pressure on businesses to control costs has always been intense. The current economic climate combined with the rising price of fuel and insurance means that it is more important than ever to think smarter about how and where savings can be made."

Since its launch in 1996, Flexible Vehicles has delivered more than 20,000 vehicles to business and personal customers across the UK. It has the ability to supply vehicles for periods from three months to four years. Services include contract hire and leasing, personal lease, vehicle finance, vehicle rental, outright purchase and commercial vehicles. Its Flexible Fleet Management system also allows companies to focus on their core business and not become distracted by the everyday problems associated with operating company vehicles and the ever-increasing grey fleet vehicles.