Running a fleet of vehicles can be very expensive with high operating costs and maintenance fees. However, we recommend these 12 steps that you can take to reduce your operating costs and manage your fleet more effectively. These steps will allow you to start saving your business money today.
1. Use fuel cards to save money
Unsurprisingly, one of our favourite money-saving tactics is to use a fuel card. 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. (FWP and PP)
- A reduction in admin costs because invoices and VAT are much easier to manage. (FWP and PP)
- The risk of fuel fraud is reduced as 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
The location 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, then your business is likely to be paying a premium for its fuel. It’s therefore important to plan out journeys in advance and refuel early to prevent an urgent refuel at a more expensive station, such as those found on motorways.
However, by choosing a fixed weekly price fuel card for your drivers you can prevent these additional costs at motorway service stations. Instead, 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
Telematics combines a GPS system with onboard diagnostics and can be used to monitor the activity of fleet vehicles. They can record and map exactly where a vehicle is located and how fast it’s travelling, and cross-reference that with how a car is behaving internally.
Monitoring fleet data through telematics and adapting the way in which your vehicles are driven 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 so less fuel is used.
- Identify where and when to refuel in advance to reduce fuel costs.
- Improve driving standards and productivity by highlighting poor driver behaviour, such as fuel inefficiency, risky manoeuvres and using a vehicle outside 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 both the location of vehicles and the behaviour of your drivers are constantly being monitored.
4. Educate drivers about efficient driving
It has been reported that drivers can impact fuel efficiency by up to 30%. This shows how important it is that your drivers know how to be more efficient on the roads. Here are some of our top tips to help your fleet be more fuel-efficient:
- Avoid excessive speed and harsh acceleration as 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.
- If possible, try to limit the use of air conditioning, excessive use can add up to 10% on fuel usage.
- Minor issues or unusual sounds can escalate into much bigger, and far more expensive problems. So, report issues as soon as you learn about them.
- Avoid carrying unnecessary items in your cabin as this can lead to a vehicle using more fuel.
5. Cut down on the physical travel your business undertakes
One of the easiest ways to save money is to reduce the number of unnecessary trips that are taken by your drivers. Therefore, it might be worthwhile to carry out an audit of your corporate travel. This will allow you to identify where business trips can be minimised, saving your business money.
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 determine the best insurance cover for your fleet, speak to an insurance broker about how you manage and monitor your fleet and your drivers. This will typically involve you sharing reports about miles travelled, vehicle repairs, accidents, and speeding fines.
7. Arrange full fleet maintenance
If possible, it’s best to have your fleet serviced at the same rather than having each vehicle undergo checks independently, as this can help to save your business money. Full fleet maintenance can also reduce admin time and costs, making life simpler.
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 several of your vehicles. Although this will remove all the costs associated with those vehicles, it’s worth considering how the increased workload on your remaining fleet will impact their operating costs. However, by making cuts to your fleet vehicles it’s still likely that overall fleet operating costs will be reduced.
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. However, if you do make this decision, then you can expect a reduction of purchase costs of your company vehicles and this will also help to decrease your fuel costs too. Reducing the size and weight of your fleet vehicles could help to save you money, but it’s important to weigh up the performance and reliability of your current vehicles against that of 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 it can help you from losing out in the long run. By retaining and operating vehicles for too long you can expect associated costs such as repairs, poor fuel efficiency and downtime, plus a reduced resale value. It can therefore be worthwhile to develop an effective vehicle replacement plan that delivers long-term savings for your business. This typically involves creating a detailed inventory of your fleet and establishing parameters about when to replace vehicles and estimating associated costs.
11. Lower the cost of acquiring your vehicles
Achieving the lowest acquisition cost for your fleet vehicles is paramount to reducing costs. Here are some of the most effective ways that you can do this:
- 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.
In addition, 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
Not only can businesses optimise when they replace their vehicles but there’s also potential to increase profit margins when selling vehicles. Improving the way that you sell your vehicles can be done by:
- Selling a vehicle as soon as you no longer need it so that you don’t lose money through depreciation.
- Increasing your potential buyer base through online vehicle auctions.
- Ensuring that your vehicles are well-prepared for sale by cleaning them and providing manuals and service records.
- Only buying vehicle colours that typically result in the best return: black, grey, silver, blue and white.
- Establishing 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 allow you to reduce transportation fees.
*Surcharges may apply at selected sites.
David JamesDavid has worked in the fuel card industry since 2008. His financial insights have been featured in various publications, such as The Sun, the Daily Express and The Yorkshire Times where he provides money-saving tips for motorists. David is passionate about charity work and regularly raises money through running events, including the London Marathon and the Leeds Abbey Dash.