If you run a fleet of vehicles, you’ll know that operating costs can be extremely expensive. But there are some simple steps, as well as more time-intensive ones, you can take to reduce your operating costs and manage your fleet more effectively. Read on to find out more and start saving your business money today.
1. Use fuel cards to save money
As a fuel card company, we thought we’d start off with our favourite money saver: using a fuel card. Because choosing either a fixed weekly price (FWP) fuel card or a pump price (PP) fuel card for your drivers can lead to a wide range of money-saving benefits:
- A fixed price for fuel that is closely linked to the wholesale fuel market, which means you get a competitive price. (FWP only)
- No interest charges or non-usage fees applied. (FWP and PP)
- A reduction in admin costs, because invoices and VAT are much easier to manage. (FWP and PP)
- You’re less likely to be affected by fuel fraud, because every transaction is tracked and your company is billed directly. (FWP and PP)
2. Don’t buy fuel on motorways unless you have a fuel card
Where your drivers buy their fuel can have a major impact on your fleet operating costs. For example, if they mainly buy it at motorway service stations, your business is likely to be paying a premium for its fuel. That’s why it’s important to plan journeys and refuel early to prevent an urgent refuel at a more expensive station, such as those found on motorways.
However, there is one simple way to prevent all this worry: go for a fixed weekly price fuel card for your drivers. That’s because you’ll pay a competitive set price for your fuel at any station your card is accepted at, regardless if it’s located on a motorway or A-road, or in a city centre.*
3. Introduce a fleet telematics system
In layman’s terms, telematics is a way of monitoring a vehicle that combines a GPS system with on-board diagnostics. This makes it possible to record and map exactly where a vehicle is and how fast it’s traveling, and cross reference that with how a car is behaving internally.
Monitoring fleet data through telematics and acting upon it is also one of the best ways you can reduce operating costs quickly. That’s because the data produced by telematics can help you do all of this and much more:
- Identify the best routes for your vehicles so fewer miles are covered and less fuel used.
- Identify where and when to refuel to reduce fuel costs.
- Improve driving standards and productivity by highlighting poor driver behaviour, such as fuel inefficiency, risky manoeuvres and using a vehicle out of business hours.
- Improve driver morale and retention because drivers know a telematics system helps to keep them safe and makes their role easier.
- Potentially reduce insurance costs because the location of vehicles and driver behaviour are monitored.
4. Educate drivers about efficient driving
A study by the United States Environmental Agency revealed that a driver can impact on the fuel efficiency of a vehicle by as much as 33%. So to save costs, it’s critical that the drivers of your vehicles know how to drive in an efficient and smart way. To help you achieve this for your fleet, we’ve put together these top tips:
- Keep your speed down and don’t accelerate hard; this burns fuel quickly.
- Idling (running a vehicle when it’s not moving), hard braking and inconsistent speeds can all have a negative impact on fuel efficiency.
- As much as possible, don’t use air conditioning. Excessive use of it can add up to 10% on fuel usage.1
- A squeak, rattle or clunk can escalate into much bigger, and far more expensive, problems. So report issues as soon as you learn about them.
- If possible, review what’s in the boot of your car, in your van or inside your cab or on your lorry. Carrying unnecessary items will lead to a vehicle using more fuel.
5. Cut down on the physical travel your business undertakes
This may seem like an incredibly obvious way to save money when managing a fleet – and it is – yet every day unnecessary trips are undertaken by employees that have little business justification. To prevent this from happening, it may be worth your business, or a third party, carrying out an audit of your corporate travel. For example, an audit like this might identify that a number of business trips could be conducted through telecommunication applications such as Zoom and Skype rather than face-to-face visits.
6. Take out fleet insurance on your vehicles
No matter the size or combination of your fleet, you should be able to get comprehensive insurance cover for the whole fleet, rather than insuring each vehicle separately. As a result, you may benefit from slightly reduced premiums, and you’ll only have to keep hold of one set of paperwork.
To find out about the best insurance cover for your fleet, speak to an insurance broker about how your business manages and monitors its fleet and its drivers. This will typically involve you sharing reports about miles traveled, vehicle repairs, accidents and speeding fines.
7. Arrange full fleet maintenance
This may take a bit of expert scheduling, but if you can manage to get your fleet serviced in one go, rather than having each vehicle undergo checks at different times, then you’re on your way to saving yourself some money. Making the move to full fleet maintenance should also reduce admin time and costs and make life a whole lot simpler for everyone.
8. Reduce the number of vehicles in your fleet
Again, this is another obvious way to save money, but when is the last time you considered whether you need all the vehicles in your fleet? By carrying out a thorough assessment, you may find that you could eliminate a number of your vehicles. Although this will remove all of the costs associated with those vehicles, you will need to consider how the increased workload on your remaining fleet will impact on their operating costs. However, it’s highly likely that your business will reduce its overall fleet operating costs by making some cuts.
9. Reduce the size and weight of your vehicles
Only by comprehensively assessing your business requirements and your current fleet, will you be able to make the decision to downsize the vehicles in your fleet. But if you do make this decision, it’s very likely that you will slash the purchase costs of your company vehicles and reduce your fuel costs too. However, any changes like this must be weighed up against the performance and reliability of the new vehicles.
10. Replace fleet vehicles at the optimum time
Frequent vehicle replacement may seem like an unnecessary cost to your overall fleet budget. But if you retain and operate vehicles for too long, associated costs such as repairs, poor fuel efficiency and downtime, as well as a reduced resale value, can lead to you losing out in the long run.
Therefore, it can definitely be worth developing an effective vehicle replacement plan that delivers long-term savings for your business. This typically involves creating a detailed inventory of your fleet, establishing parameters for when to replace vehicles and estimating associated costs.
11. Lower the cost of acquiring your vehicles
It goes without saying that achieving the lowest acquisition cost for the type of vehicle your business needs is paramount to reducing fleet costs. Some of the best ways you could potentially do this are:
- Buy directly from an original equipment manufacturer (OEM) rather than a dealership.
- Negotiate a volume discount from whoever you buy your vehicles from.
- Speak to an OEM or dealership about any vehicle models they wish to “move on”, such as low-demand models or models that are being phased out.
- Establish multi-year contracts with whoever you buy your vehicles from and secure purchase price assurances.
On top of all these tips, it’s always important to identify the potential resale value of a vehicle you’re considering buying, as this can also greatly affect the overall operating costs of your fleet.
12. Improve the way you sell your vehicles
As well as optimising when you replace your vehicles (see step 10), there are a number of things you can do when selling your vehicles which may increase your profit margins. These include:
- Sell a vehicle as soon as you no longer need it. That’s because every day you don’t sell it you’re likely to lose money through depreciation.
- Increase your potential buyer base through online vehicle auctions.
- Make sure your vehicles are well-prepared for sale by cleaning them and providing manuals and service records.
- Only buy vehicle colours that typically result in the best return: black, grey, silver, blue and white.2
- Establish an employee sales programme. This can lead to you achieving a better sale price than you would with a dealership, and your employee may also get a good deal too. Selling this way should also mean you receive money quicker, and you’ll reduce your transportation fees.
*Surcharges may apply at selected sites.
1. Source: Express.co.uk
2. Source: Whatcar.com