How to reduce company vehicle costs
Instead of letting costs impact the bottom line, there are ways that you can strategically adjust elements of your operations in order to reduce fleet costs. Here Doug Kelley, Director of Bluedrop Services insurance brokers, gives advice on ways you can reduce your fleet management costs.
- Review the ownership strategy
There are many ways in which businesses manage and own fleets. In some instances, the business owns or leases the car and the employee is then given it to drive. Similarly, some businesses operate a ‘pool car’ system, where vehicles are made available to employees to drive when they require one.
Some companies invest in employee car ownership schemes that provide a company car to employees without the high tax or they have what is called a ‘Grey fleet’ whereby the employee owns the vehicle and uses it for business trips.
When reviewing your ownership strategy, it is imperative to consider what’s right for your style of business. When a car is given to an employee, it can be difficult to control how that vehicle is being used efficiently to cut costs.
The strategy you adopt should be based on the number of miles the employee drives, the distances travelled and whether the employee requires access to the vehicle on a regular basis. It may be that you don’t need as many vehicles on the road at any given time. Therefore, you can reduce the number within your fleet and save quite a bit of money.
- Training employees
A simple strategy of training and development with your fleet employees can help you to save money. Not only can you help save on fuel costs, but also you can save money on the daily running and maintenance of your fleet.
Telematics technology is also a great way to record how your vehicles are being driven. They can pinpoint through GPS the routes being taken as well as driver behaviours such as speeding.
Reducing speeds and optimising routes can be a great way to cut costs within your fleet. Additionally, reducing excess weight or turning off the air conditioning from a vehicle can help to reduce fuel consumption.
When you are able to train your fleet employees, you can encourage better driving habits, which can help to save you money.
- Telematics technology to optimise operational efficiency
The maintenance and repair of your fleet can have a big impact on costs. It can be an area that is hard to manage. With telematics, the process of managing is made much easier as the number of telematics policies rise. The technology can monitor performance based on individual vehicles and drivers.
The data is recorded and sent to a central hub and even captures mileage, as well as road and traffic conditions so you can optimise the routes being taken. Telematics also helps to identify any faults within a vehicle and can pre-empt any maintenance or repair. It can help you to keep track of servicing and MOTs to ensure there are no disruptions within your fleet.
- Fleet renewal
Another way to reduce costs is to replace your vehicles periodically. As vehicles get older, the costs of maintenance can dramatically increase. Therefore, if you swap out vehicles before repairs are required, you can reduce costs associated with repairs, maintenance, fuel and downtime.
Investing in electric vehicles may also help you cut costs. Whilst the initial purchase of the vehicle may be higher, you can save money on fuel, as well as oils and lubricants required for maintenance and avoid high taxes on your fleet vehicles.
- Fleet insurance
Investing in fleet insurance makes good business sense. Conducting a risk assessment first can help you to analyse where vehicles are needing the most repair and maintenance. Your telematics data can also help reduce your insurance premiums.
If you invest in insurance, it can help to cut the costs of major repairs or accidents and can help reduce downtime if you have replacement vehicles when one of your fleet vehicles is off the road.
Overall, there are a number of strategies you can adopt in order to get your fleet costs down. Simple solutions can be effective and impact your bottom line.