Managing the operational costs of a vehicle fleet is difficult at the best of times. Whether it's a commercial fleet such as buses, delivery vehicles or waste disposal vehicles. Or a passenger fleet such as limos, taxis or company cars for a sales fleet, managing these costs can make or break your profit margins.
To help you, we’ve put together a list of 10 ways to save money on Fleet Management:
Next, to ever-dwindling budgets, fuel costs are one of the biggest issues facing vehicle fleet managers. Even though fuel prices dropped substantially at the start of 20161, they are creeping back up. Fossils fuels are a finite resource and the price is looking to be headed in only one direction - up.
If you’re shopping for a new fleet, or coming up to an upgrade cycle, getting a fuel efficient vehicle should be a major deciding factor in the choice of vehicle. New gasoline and diesel cars are much more efficient than before. And the rise of Hybrid technology is taking efficiency even further.
A regular maintenance schedule should be a part of any good fleet management plan. Making sure vehicles are properly serviced and repaired will keep costs down in the future. Proper maintenance can look expensive but an issue or fault that is caught in the repair bay is much cheaper than a call out fee or a tow on the highway.
Whether it’s carried out by the fleet team or is a checklist completed by the driver before taking a vehicle, regular inspection can spot potential damage and required repairs far in advance.
According to the US Department of energy, tires that are under-inflated by just 1psi can affect efficiency by 0.3%. Improper tires can also wear out quicker and reduce the vehicles stopping power in emergency situations. A simple pressure test taken by a pocket pressure gauge can quickly identify underinflated tires and prevent a lot of wear and tear.
Next to fuel, tires are one of the biggest consumables in any vehicle. Tire purchasing can often put a fleet manager between a rock and hard place. New, premium tires are expensive and can exceed tight fleet budget. But cheap new tires can wear out much quicker and potentially have higher failure rates.
This is why many fleet managers are looking for alternate solutions with TreadWright Tires, which start out 40% cheaper than new tires and offer further discounts on purchases of 8 tires or more. In addition to the considerable pricing advantages, TreadWright uses commercial grade rubber compounds on all our tires. This compound has approximately 30% natural rubber, leading to higher mileage and better wear characteristics. are also DOT rated for 40,000 miles on standard wear and 60,000 with premiere wear, providing quality mileage with less cost.
Despite TreadWright being a remolded tire safety is not an issue. As TreadWrights perform and act like brand new tires. It is often a myth that retreaded tires are defective. To offer further ensure safety with our product TreadWright retreads use the latest technology called "Mold Cure," which is considered the closes process to a brand new tire.
Did you know that idling an engine uses more fuel and wears out an engine faster than regular driving? Idling a vehicle for 30 minutes before a 100-mile trip can reduce its mileage by approximately one-third and that one hour of idling a day, over a year can add an equivalent of 26,000 miles of wear to an engine.
Education and training that shows drivers how to drive effectively, efficiently and without a heavy right foot can help reduce not only your fuel and maintenance costs, but can also help keep drivers safe on the roads. As well as keep those speeding tickets down.
Use Telematics (aka fleet management software)
Using Big Data and the Internet of Things (IoT) we have access to much more information about vehicles than ever before. Modern cars are fitted with advanced sensors and computers that can record and report on a wealth of information.
Fleet management software allows you to harness this data and make decisions about your fleet that can have big impacts on your bottom line. You can see the true miles vehicles have traveled as well as common faults and error codes. Some fleet management software also looks at navigation data and looks for optimizations in route and traffic.
UPS used this to fantastic effect when in 2004, it asked drivers to avoid turning left4. UPS engineers used data from its trucks and fleet mapping software and realized that right turns against oncoming traffic wasted time and fuel, as well as leading to a higher number of accidents.
After implementing the ‘no left turn’ rule, UPS saved nearly 10 million gallons of gasoline between 2004 and 2012. All from simple tweaks identified by fleet management software.
Reduce Vehicle Depreciation Costs
Vehicle depreciation is one of the largest, fixed costs, for vehicle fleets, but it can be managed in the following two ways:
Selling end-of-fleet vehicles to staff is not a new concept, but it is something that is still not embraced by a lot of businesses. Selling the vehicle not only helps recoup costs but also helps build staff loyalty by offering them great deals on vehicles they are already driving.
The sale doesn’t have to be a simple fixed price. Instead, using an Internal auction can offer another way to increase the sale price of the vehicle without causing an uproar.
Managing cost of acquisition:
Even if your fleet is small, the fact that you’re looking for a volume of vehicles can be a great leveraging tool for negotiating a buying price. Get creative here, remember it’s not all about the final dollar price either, add-ons such as maintenance and service packages can also help in reducing the overall cost.
Look At Lifecycle Costs
As we mentioned before, it’s not all about the final price on the dotted line when buying. Looking at cost of the vehicle’s entire lifecycle is critical when selecting a new fleet. You could get a great deal on a new vehicle but if it consumes a lot of gasoline or has a complex and expensive maintenance schedule, then your costs will become much higher than a vehicle that is more expensive at the start but is cheaper to maintain.
If you’re dealing direct with a manufacturer then reviewing lifecycle costs is something that should be on the negotiating table.
Limit or Remove Vehicle Choice
Limiting the types of vehicles in your fleet does two things:
- Increases the leveraging power when buying a fleet of vehicles. Suddenly you’re negotiating buying 100 of the same vehicle, rather than 30 of 3 vehicle variants.
- Streamlines maintenance. You’ll be able to use bulk pricing on vehicle components for one particular type of vehicle, rather than buying a mix of components at close to retail value.
Consider Vehicle Allowances Over Fleets
For companies that primarily have passenger vehicle fleets, the question of even having fleet vehicles anymore is something that is coming up more and more. With costs continuing to rise, many companies are starting to reevaluate the cost-effectiveness of having their own vehicle fleets.
Having a vehicle allowance introduces more of a fixed fee structure to the vehicles as maintenance, insurance and cleaning fees are all replaced with the single expense of a vehicle allowance.
Every business is unique and this is a decision that can only be made by your team for your business. For many companies the image conveyed by having a vehicle fleet with consistent company logos’ and brand identity far outweighs the running costs of the fleet.
Modern vehicle fleets that utilize intelematics also introduce a higher level of reporting on travel/delivery times whereas paying employees to use their own cars removes this data source.
So there you have, 10 ways you can help manage your fleet costs. Some may be easier to implement than others, but all will help in keeping costs down.
If you currently manage a fleet or are thinking about managing a fleet and are interested in saving on your tire expense please fill out our Fleet Form to get live up to date pricing.