Outgoing expenses are a high priority for any fleet manager no matter the business size, to help, why not check out our 10 tips to reduce fleet costs. These simple, everyday tips could potentially reduce your outgoings, and help your business run smoother. With 73% of UK fleet managers stating poor driver behaviour negatively impacts their business, we have compiled a list of useful tips for seasoned fleet veterans and newcomers alike.
Fleet running costs
For any fleet manager, your vehicle costs or total cost of ownership (TCO) is the acquisition price of your vehicles and other assets plus your total running costs. This figure should always be considered when making business decisions, such as new purchases/leases or potential expansion. Regardless of your commercial business type, whether that be couriers or taxis, managing your fleet running costs will always be a key objective. Typical considerations include:
- Vehicle maintenance
- Running costs
- New purchases/leases
- Vehicle storage
- Your driver/s history record
With the UK fleet sector increasing by 42% in the past decade, now is a great time to share some of the best practices that fleet managers could adopt going forward.
How to reduce fleet running costs
Increased fleet running costs have the potential to eat into the businesses overall profit. The challenge is to make your budget go as far as possible. But also, to allow for unexpected everyday costs such as repair bills or fuel price increases. Here are 10 top tips, in no order, that could help to reduce your fleet costs:
10. Vehicle maintenance
Vehicle or preventative maintenance (PM) is essential to ensure your fleet is working at peak performance. If you feel you are spending too much on preventative maintenance, consider increasing the intervals between inspections. Light-duty fleet companies can consider increasing inspection frequency from 3000 miles to 6000 miles, for example. However, manage your repair costs, check oil, tyres, and windscreens regularly. This could help to create a more productive and profitable fleet.
9. Fuel economy
Sourcing a fuel card provider that offers good savings with no hidden costs is a no-brainer. Even seemingly small savings can add up and make a huge difference to your overall fleet cost over the long term. There is a variety of fuel cards for fleets available with access to over 7,700 refuelling sites nationwide.
Do not allow employees to refuel your vehicles themselves and submit receipts for the purposes of reimbursement. This is a logistical minefield and will lead to further spending and confusion down the road. Once you have a fuel card, be sure to shop around regularly for better prices elsewhere. You can do this by downloading the PetrolPrices app which is available on both Android and Apple devices.
8. Driving habits
Bad habits could lead to higher fuel costs and vehicle repairs, for example. Utilise refresher courses for drivers to remind them how speed, braking, and handling of a vehicle can all lead to higher fleet costs. Other habits drivers should look to correct include:
- Overall speed reduction
- Switching off idling engines
- Maintaining tyre pressure
- Anticipation of road conditions
- Minimise air conditioning use
- Remove unnecessary vehicle weight
7. Reduce mileage
By enforcing personal-use policies, monitoring business territories, and liaising with fleet supervisors you can quickly begin to reduce your fleet cost. Unnecessary journeys drive up costs. Reduce waste by combining trips for multi-stop schedules. Consider GPS or Telematic installation to monitor fleet usage further (more information about this in the next tip). Utilise technology to your advantage. Conduct meetings via phone, email, or video instead of driving to multiple locations. Investing a little in technology now could potentially save you money in the future.
6. Invest in telematics
The initial outlay required to outfit your fleet with this type of technology may seem daunting. However, it will provide you with the kind of key analysis and pain point identification you need to remedy potential problems for your business and make changes that could yield enormous savings over time. Telematics systems can also make drivers more aware of their driving behaviour and bad habits, resulting in further improvements towards fleet cost reduction.
5. Lower your emissions
By keeping your fleet of vehicles CO2 emissions in line with government policies you could reduce the amount you pay in tax. By selecting low emission vehicles for your fleet, you could keep overall fleet costs lower. Most vehicles have a lifespan of when they are the most fuel-efficient, so when it comes time to upgrade consider a more environmentally friendly option.
4. Plan journeys
Firstly, this is an often-overlooked area of fleet management. Secondly, if you have a large fleet you could consider investing in software that will analyse your operational needs and optimise the routes required to maximise productivity and profit. Finally, the benefits of forward planning mean you could reduce costs from fuel, tyres, tolls, and potential penalties.
3. Replace older vehicles
Older vehicles may be costing you over the odds in vehicle repairs and fuel efficiency. They may even hold back your earning potential as they languish in the depot while drivers opt for more attractive alternatives. It may seem expensive to replace them in the short term but consider the long-term cost of keeping these vehicles in your fleet. Upgrading to a more modern, fuel-efficient fleet of vehicles could reduce your running, maintenance, and downtime costs.
2. Avoid fines and charges
End of contract charges, fuel card protection, speeding fines, congestion, and toll fees. These are just a sample of the hidden charges you must be aware of as a fleet manager. Be sure to always double-check the small print on any contracts or service agreements. Request regular updates from fleet supervisors regarding unexpected maintenance or driving costs. Determine your Total Cost of Ownership (TCO) and utilise software packages that allow input of spend data and easy report generation. By identifying your fixed and variable fleet costs you will be able to make informed decisions and manage your fleet cost reductions more effectively.
1. Get the right fleet insurance for you
From small start-ups to big businesses, it is important that you secure a personalised, specialist fleet insurance policy that is right for you. It is a hassle-free way to insure your fleet rather than insuring drivers and vehicles individually. Our policies provide the flexibility for different drivers to drive different vehicles, all covered by one fleet policy.
Get a fleet insurance quote today!
We hope these 10 tips provide useful considerations that add value to your fleet strategy. As specialist providers of fleet insurance, we provide fleet and driver flexibility as standard. Our single fleet policies are simple to set up, maintain, and renew. Click Get a Quote today for a no-obligation quotation and see how much you could save!
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