August 20, 2019 Reducing Fleet Costs

7 simple ways to reduce fleet costs to not only save money but reduce your environmental footprint.

August 16, 2019

Whether you run a fleet of cars or a convoy of trucks, it’s almost certain that your business is spending a lot of money running that fleet. It isn’t easy to cut costs, but it is possible, and there are ways to save money running vehicles without interfering with customer service, vehicle performance or worker safety.

Here are seven simple ways to reduce fleet costs. All of our tips will save you money, and some may reduce your environmental footprint, too.

Standardise Inventory

One way to reduce costs is to standardise the inventory e.g. carrying four or five models of cars instead of ten to twenty. This means you’ll have better buying power when buying replacement vehicles, and you’ll also enjoy economies of scale when servicing the vehicles, because you’ll use the same parts and components for each vehicle.

Make sure you choose durable models known for having low maintenance costs as well. This will be more important than choosing vehicles for performance or aesthetics, unless it’s for high level reps and execs.

Choose Vehicles Based on Environmental Factors as Well as Cost

We often choose new vehicles based on their purchase price, but you should factor in environmental considerations too. For example, don’t buy a vehicle that gets less than 45 miles per gallon. This has the side benefit of being a selling point to your customers, and you’ll reduce your fuel costs over the long-term.

If you steer clear of vehicles that put out more than 105 grams of Co2 per kilometre driven. Then you’ll save on National Insurance and Benefit in Kind tax. Certainly, factor costs like this into the whole-life costs when picking vehicles.

You can save money by replacing vehicles at the end of their operating life, when the repairs to keep them going will be cost-prohibitive.

You can supplement this policy by choosing vehicles that are the right size for the job. There’s no point sending a big truck when a small van will do. You’ll save money on fuel just by choosing the smaller vehicle.

Encourage Better Driving

There are many ways that the way your drivers use their vehicles could affect costs. Encouraging people to not speed up and slam on the brakes, and avoid idling could help reduce fuel usage. This will also reduce the odds that people receive speeding tickets as well, which is another cost you have to consider. Asking them to cut down on the air conditioner usage will reduce fuel use as well. You can also challenge how far and often they drive, encouraging them to drive less.

Other things like teaching them how to better use gears could reduce wear and tear on the vehicles themselves. You could also teach people how to monitor tyre pressure and inflate them properly. This will improve fuel economy by up to ten percent. You can incentivise this by giving them tyre pressure monitors and the responsibility to check it periodically.

Shop Around for Insurance

Shopping around can save you money on insurance no matter what type of insurance it is. You could save five, ten or twenty percent by changing vendors. Services like Quotezone will allow you to compare quotes between insurers to find a better deal. Or you could find fleet insurance that provides better coverage than you currently have at the same cost.

Buy Fuel in Bulk

If you can buy fuel in bulk, you’ll save money. However, this isn’t feasible for everyone. A viable alternative is signing up with a fuel card provider. This lets you commit to buying fuel with a vendor who will offer volume discounts. Just make sure you’re actually getting the best deal on fuel.

Study Whether Cash Allowances Are Better than Company Cars

The company car has long been a status symbol. Unfortunately, it brings with it insurance and maintenance costs for the company. Run the numbers. You might save money for the company by shifting to a cash allowance for key employees and mileage reimbursements for everyone. However, you’ll need to take into account the existing personal vehicle leases and car loans employees may have before making wholesale changes.

Invest in Vehicle Maintenance

Don’t see vehicle maintenance as a waste of money; see it as an investment in the vehicles themselves. For example, repairing chips and cracks saves you from having to replace the entire windshield. Check tyres for tread depth and damage. Replace them before they can fail catastrophically, possibly leading to accidents.

It is possible to reduce the costs and even the size of your vehicle fleet if you know how to go about. All of this will eventually add up in the end, and that money will go towards the company’s bottom line.

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