June 28, 2023
We know that many companies are looking for ways to reduce costs across the business, especially in areas like fleet management. There are several ways that Wessex Fleet can help you reduce fleet costs, and our experts have taken a look at some of the most costly areas of business fleets and how you can save there.
What Are the Biggest Expenses for Company Fleets?
Fleet management involves several areas of expenses but what are the most costly? Well, for most fleets there are three areas that have the largest price tag:
There are other areas of expense too including vehicle insurance, telematics, driver training, permits and fines to name just a few, but in this article we’re focusing on the three most costly ones.
Buying New Vehicles
The most expensive part of having a fleet is the fleet itself.
We know that buying a vehicle outright is expensive which is why we think it’s wise to consider all available funding methods for new vehicles, especially if you do not need to own the vehicle.
Owning comes with a lot of additional costs, like road tax, and the vehicle itself will be a depreciating asset which is why more businesses are utilising contract hire and long-term rentals as methods of funding their new vehicles.
How to Save Money on Fleet Vehicle Purchasing
The best way for you to save money on fleet procurement will be individual to your business as it will be based on your fleet needs and how you can minimise the cost but still have a functional and safe fleet.
If you’ve not done it recently, we recommend looking at your current fleet make up. You want to look at:
- Where your vehicles are, if there are any departments with excess or unsuitable vehicles
- The make up of your fleet, not just if the vehicle is suitable for the role but its age (whether it’s likely to need replacing soon), how it’s funded, the fuel type, the maintenance costs, and any other associated costs
- The future plans for the business and how this will impact the fleet
- The current future plans for the fleet
Once you’ve reviewed the factors mentioned above you will have a better idea of what kind of fleet you need and where you can make cost savings. We generally find companies can make savings by:
- Moving vehicles to better suited positions
- Reducing the number of vehicles in their fleet, especially if there are excess pool vehicles
- Updating the fleet to more efficient and less costly models with a variety of funding methods
- Transitioning to EVs (for fuel savings, and other advantages including lower BIK rates, no congestion charge etc)
Another area where costs can be quite high is maintenance. The cost of maintenance includes regular servicing, regular maintenance, repairs due to accident, vandalism or driver negligence (if not covered by your insurance).
Maintaining your vehicles is not an expense you can completely cut, when you have a fleet you’re going to need to maintain them. We would class it as an essential cost to budget for along the likes of insurance, road tax and fuel. However, unlike road tax and insurance maintenance is not a fixed cost and you can reduce the amount you need to spend on it.
How to Save Money on Fleet Maintenance
Saving money on vehicle maintenance does not mean only doing the necessary work when it becomes necessary, as this can cost you more in the long run. Instead, you should view reducing fleet maintenance costs as a longer project, and think of it as spending less on the vehicle over its lifetime. This will sometimes mean spending a little more on a repair to prevent further work from being needed down the line.
There are a few strategies that you can use to bring down your maintenance costs and three we recommend for all businesses that can have a noticeable impact with relatively little effort are:
- In the procurement phase avoid vehicles with known issues
- Keep on top of regularly scheduled maintenance and servicing
- Ask drivers to regularly check their vehicles for any damage / issues to try and catch them early on
We recently wrote a piece on how to reduce damage costs in your fleet that breaks down a few different strategies for reducing fleet damage costs, which you might also find useful.
If you’d like to learn more about maintaining your fleet and how Wessex Fleet could save you money then please give us a call on 01722 322 888 or take a look at our Maintenance page.
The third most costly area of a fleet is the fuel bill. This will be especially true for a business that offers fuel cards or require drivers to cover a lot of miles as part of their role.
How to Save Money on Fleet Fuel
One obvious way to save money on powering your fleet is to switch from traditional fossil fuels to alternative power. At the minute electric is the only mainstream alternative available, though hydrogen models are being introduced.
You might be worried about the recent rise in electricity rates, and while it is true that electricity is more expensive than it first was when electric vehicles (EVs) became mainstream, it is still cheaper to charge an EV than fill up a tank of petrol or diesel.
Another way to save money on fuel is to use telematics to look at trip data and see how you can better manage trips. This can include route optimisation, combining journeys, and even promoting a car sharing scheme to employees. If you want to discuss fleet management and optimising then our team is available to help.
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