6 Fleet Management Cost Savings Your Boss Will Love
It doesn’t matter what industry you’re in, reducing costs is a mind-numbing battle field for any business owner. For commercial fleet managers, managing costs is the number one challenge faced daily – and the constant budget restraints don’t help either. With the never-ending struggle to ease the organisation expenses, fleet managers need reliable and constant tactics to help drive down those business costs – both in the short term, and in the long term.
We’ve identified several areas where all fleet managers can make substantial savings to your company bottom line. Check out these cost-cutting tips you can start implementing today!
1. Reduce Fuel Consumption
The fluctuation in price of fuel has a big impact on fleet budgets with the uncertainty of future prices being a leading issue for fleet managers. Predicting and balancing a fleet budget with the constant change in fuel prices is a struggle, but there are ways it can be reduced.
Elizabeth Edgar, Operations Manager at Fleetcare says fuel consumption can be better controlled through regular servicing and maintenance of your fleet. “Often business will leave the maintenance of their fleet up to the driver to maintain, it’s when these service schedules begin to slip that not only are there costs for unnecessary wear and tear, there’s also the side effect that any engine working harder to do its job will always consume more fuel.
Up keep of your fleet is essential to driver safety, and ultimately won’t see you chew through fuel”, Edgar advises. Of course when you’re going through the process of defining a “best buy” fleet policy, fuel consumption and ANCAP ratings should be the first items to consider once you’ve identified vehicles that are fit for purpose. Having the right size vehicle for the job is important and unnecessary weight should be reduced in the vehicle.
Whilst regular vehicle maintenance is key to reducing fuel consumption, having well-trained drivers and vehicle operators can be effective too. As a fleet manager, you should provide training to all drivers to help identify and avoid costly behaviours like rapid acceleration and use of cruise control. All fleet vehicles should be fitted with a GPS tracking device to allow monitoring of company vehicles and to ensure drivers take the most efficient route, cutting down on both time and fuel constraints.
A good Telematics system isn’t just tracking where your vehicles are on the road; it should be wired to the vehicle’s on-board computer (OBD port) and be able to identify for you, in real-time, fuel tank capacity which will give very accurate readings on fuel consumption, based on real-time fuel tank level’s compared to actual kilometres travelled. It’s also a good loss-prevention measure as you’re able to compare litres purchased through fuel dockets and compare those to fuel tank levels in the vehicle.
2. Create a Fixed Maintenance Schedule
Maintenance schedules are crucial for both the fuel consumption of your vehicles and the quality of their lifespan. “A business might consider flattening their costs by taking on a fixed maintenance schedule as part of the fleet funding options, such as with an operating lease (fully maintained lease)”, says Edgar.
“Fleet managers take all the hard work out for you, by checking all the work on behalf of their clients”, says Edgar. “A fixed maintenance schedule together with a replacement programs can be customised for your fleet by engaging with an external fleet management company, you have access to the right decisions including vehicle servicing reminders”.
“For older fleet assets, a fixed maintenance schedule may not be your best option, but an external Fleet Manager can bring expertise to your fleet servicing decisions, ultimately saving you money. They’ll keep you informed of how much you’re spending on the service or maintenance before you spend a cent”, Edgar says. “The benefits of hearing this information by a trade professional means you’re told prior how much money will be spent and exactly where the costs have come from”.
As far as cost cuts go, fixed maintenance schedules and sound fleet maintenance advice from an external Fleet Manager can ensure a process that’s reliable and transparent. It ensures you get the most out of your vehicles, whilst having a good chunk of the hard work taken out for you and looked after by a professional.
3. Tyre Maintenance Essentials
Regular tyre maintenance is essential to extend tyre wear, boost your vehicle’s performance and help to cut down on fuel consumption. Checking tyre treads regularly and as part of a daily or weekly vehicle maintenance safety check will help keep on top of tyre maintenance program. Tread depth ideally should not be less than 1.5mm, legal tread depths vary from state to state.
Tyre pressure and rotation is also crucial to the survival and safety of your vehicle. Low pressure tyres can contribute to an increase in fuel consumption too, so it can be ideal to check with the vehicles user manual to see what the ideal pressure is.
Wheel alignment and balance of the tyres are also an important factor affecting overall performance. Ensuring the wheels of your vehicle are balanced will contribute to fuel savings and safety considerations. If ever in doubt about the roadworthiness of your tyres, it’s best to have a specialist look at them to repair and replace if necessary.
Read more about car tyre maintenance here.
4. Implement Better Driving Habits
Training drivers and vehicle operators won’t just cut back on the fuel costs, but it will also be a positive encouragement on your vehicles overall performance and safety. Drivers should be educated about the importance of driving habits, and be familiar with the tools to implement better driving habits. “These are the behaviours business owners need to be targeting with their drivers”, says Edgar. “Instead of looking around for the cheapest car deal, more time needs to be spent on reinforcing positive driving habits to help drive down costs within the business”.
Risky behaviour should be eliminated at all costs – from excessive speeding to rapid acceleration and braking. By promoting changes to the way people in your organisation drive, there can be some substantial savings made. Simple acts of recognition and reward systems in place can help to encourage more positive driving habits too.
5. Smarter Vehicle Selection – Leasing vs. Buying
In a short term bid to “save money”, the lifecycle of your vehicle can be overlooked. It is important that once your vehicle has reached the end of its cycle it is then replaced. Pushing your vehicle over its intended lifecycle may get you by in the short term, but the maintenance and costs surrounding it work out much more expensive in the long run.
Ross Edwards, National Sales Manager at Fleetcare advises there are better options. “An alternative to buying vehicles outright is leasing – and it can be very cost effective for companies that may not have the initial funds to purchase a new vehicle”. “This gives companies a chance to release funds back into the business by leasing instead of buying outright”, Edwards explains.
Leasing vehicles has become a very cost-effective option for owners that want flexibility with their fleet. From short term rentals to long term, they’re able to effectively meet any business requirement and the ability to renew your lease and upgrade to a new vehicle every few years is extremely appealing to a lot of staff who are actually driving your fleet cars.
6. Novated Leasing
Novated leasing can provide another alternative to buying and leasing vehicles that’s become a cost cutting measure for many companies. “Employees that drive company owned cars that are not tool-of-trade vehicles could reap many benefits from switching to a Novated lease”, explains Edwards. “This is the ultimate cost saving mechanism as the business no longer owns the asset – the driver does, and they then use the company’s business status to reap the rewards”. Find out more about novated leases now.
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There are so many ways in which fleet managers and companies can save (and manage) vehicle costs. From fuel cards to outsourcing service work and the benefits of regularly maintained fleet, time and budget pressures can definitely be decreased.
So, if cutting vehicle fleet costs is your game, why not get in touch with one of our fleet leasing experts today and discuss your requirements.