6 Ways to Reduce Rising Fleet Costs

December 15 2020 - Fleet managers are under constant pressure to keep fleet costs down, but their approaches can be vastly different depending on the organisation. Some may prefer to focus on short term savings, whereas others may want to go long term, calculating the TCO. Either way, you have to find ways to limit costs while still being efficient, which is often easier said than done. Let’s take a look at a few ways that you can reduce rising fleet costs.

Reduce Breakdowns

You’re losing money every time one of your vehicles is out of commission, but this is even worse when it comes to roadside repairs. These will usually cost more and you may have to pay extra to have the vehicle carried back. In this case, the only way to avoid this is to focus on preventative maintenance. You should also think twice about buying older vehicles or vehicles that are on their second or third lease in an attempt to save money.

Shop Around for Insurance

If you’re building your fleet or managing one, there is absolutely no reason to stick with only one insurance provider. There are literally hundreds you can choose from, so take advantage of that and shop around for a better deal.

You could compare cheap fleet insurance on Quotezone.co.uk, for instance. They will connect you with some of the best providers in the country. You’ll be able to compare fleet insurance quotes fast and apply right on their website.

Watch Fuel Consumption

Another very important cost that fleet managers should keep an eye on on is fuel. It is one of the most important parts of a fleet's operational budget and has always been a pain point for companies managing fleets of all sizes. One survey found that around 53% of all companies end up going over their annual fuel budget due to things such as traffic congestion, road work, inefficient road planning, and human factors such as accounting errors and poor driving habits among others.

Here, the one thing that you can directly affect is driving habits. And your best friend here is data. By using the right tracking tools, you'll be able to monitor things such as idle running time, for instance. You could establish best practices and see which of your drivers are outliers. Tracking tools can also help track loading inefficiencies and road planning.

There is also a variety of other bad habits that can end up spending more money on fuel. Excessive use of the air conditioner is one example. Hard acceleration is another. This is why you need to use the best tools possible that will give you a clearer view of what type of drivers you have in your fleet. This will also be helpful when forming new drivers.

Avoid Fines at all Costs

This is another important factor that you should be paying special attention to as it is one that you can affect directly as well. No fleet should be spending excessive amounts of money on ULEZ and congestion charges or parking fines. So, make sure that you keep these under control, and have ways to hold offenders accountable.

Reduce Lifecycle Costs

Many senior-level executives seem to believe that frequently replacing vehicles is a waste of money, and they would rather have drivers use vehicles until they reach an older age as an asset. The issue here is that far too many companies use their vehicles beyond their optimum economic life. This is when the vehicle starts turning from asset to liability.

Past this time, maintenance costs start to go up and breakdowns happen more often. Not only that, but older vehicles tend to use more fuel, not only because of wear and tear, but because they don't benefit from the same technological advancements.

However, to be able to optimise replacement cycles, you have to make sure that you use the right tools. You should be using replacement planning tools that will allow you to empirically come up with proper lifecycles for vehicles in your fleet.

Lower Your Total Cost of Ownership

Another area where more fleets can improve is when it comes to acquisition costs and TCO. The depreciation of an asset is always the biggest component of TCO. There are some cases, however, when fuel can be a bigger factor for low-acquisition fleets that do lots of mileage.

In all cases, however, you have to find ways to keep acquisition costs low without increasing TCO. Choosing the wrong type of vehicle could lead to greater depreciation, which increases TCO. This can depend on the brand or type of vehicle, so this is something you'll have to consider. Also, make sure that you take advantage of volume discounts wherever you can, especially with OEM manufacturers.

These are just a few ways that you can keep your fleet costs to a minimum. Whatever the case, there is usually always room for improvement, so make sure that you arm yourself with the right tools to get the data needed to see where there might be leaks.

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