If your business is reliant on a fleet of vehicles, you’ll be aware of just how much they can drain your finances if managed poorly. From fuel and insurance, to maintenance and MOTs, the costs involved in having a fleet soon add up becoming one of your company’s biggest expenditures. But while these outlays are unavoidable and necessary for the functioning of your business, there are measures you can take to cut fleet costs. Here, we’ll outline three of the best.
- Invest in a fuel management system
Fuel management systems provide a way for businesses to run their fleets more economically. The system works by pinpointing a car’s location and movements via GPS, enabling it to track a whole host of information that can be sent remotely to businesses. Data provided can then be easily analysed in the interest of saving money. According to fleet telematics company Movolytics, fuel management systems can slash your fuel spend by up to 10%, representing serious savings that can make a world of difference to your business. As part of a comprehensive fuel management plan, you will also want to invest in a business fuel card for all employees. This will enable you to track your expenditures for each trip/ vehicle. You may wish to check out iCompario, a fuel card comparison site.
For instance, telematics software can gather data on inefficient driving practices, such as rapid acceleration, harsh braking and idling. All of these behaviours can needlessly use up fuel and cause a company’s fuel costs to unnecessarily skyrocket. You’re then able to see which drivers need more training in order to eliminate these behaviours, and can continue monitoring them to make sure they are indeed driving more efficiently. Many systems also provide you with precise data on fuel consumption and wastage, highlighting the difference in expenditure and showing you exactly how much money you’re now saving.
As well as inefficient driving behaviours, other factors that needlessly use up fuel—such as unauthorised vehicle usage and mechanical faults—are monitored, giving you even more of a handle on your fleet.
- Reduce lifecycle costs
Many businesses may consider the need to replace their vehicles on a regular basis as an unnecessary drain on finances, so will instead opt to retain vehicles until they are of an older asset age. But, whilst this will save them from regularly shelling out on new vehicles, this may not actually be the most financially savvy strategy in the long run. If your business is in the habit of retaining vehicles way past their optimum economic life, you will invariably end up spending more on maintenance, and up your fuel spend as the vehicles’ fuel efficiency drops.
Consequently, it is imperative that you reduce vehicle lifecycle costs by carefully considering when it is best to upgrade certain vehicles. An effective way of doing this is to make use of economic-based planning tools or fleet management systems, which empirically evaluate vehicles and enable you to come up with a vehicle replacement plan. Taking into account a range of different factors, such as resale value, mileage, overall condition and vehicle specialisation, you will be able to work out when it is most cost-effective for different fleet vehicles to be replaced.
- Create a road safety policy
It can be easily overlooked just how costly vehicle accidents can be to businesses. Aside from the serious ramifications of death or injury, they can have an extremely adverse impact on your bottom line. Not only are they costly in terms of repairs and insurance expenditure, but consequences like legal liabilities and lost productivity from injured staff can also make a huge dent in your finances. In fact, a US report found that vehicle accidents cost employers almost $57 billion in 2017. This gives you an idea of just how expensive they can be to businesses.
Creating and implementing a road safety policy is therefore vital. Investing in high quality, safe vehicles is a critical part of this. Plenty of vehicles on the market are now using innovative technologies like autonomous emergency braking and lane-departure warning systems to keep drivers safe. Another important element is providing regular training lessons, as this will ensure fleet drivers are refreshed on how to drive as safely as possible. A study by TomTom Telematics recently found that only 57% of companies currently offer driver training.
Whilst fleets can be one of a business’s biggest expenditures, from investing in fuel management software to creating a road safety policy, there are plenty of basic steps you can take to cut costs and protect your bottom line from needless erosion.