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Jan 17

How to Cut Down On the Fleet Expenses of Your Company

Reading Time: 3 mins

If your business is the type that needs a fleet of vehicles, maybe it’s a couple of cars or an entire fleet of trucks, one of the main things you’ll be worried about will be the cost to run the fleet. Irrespective of the business size or its industry, every fleet is under the same pressure to make its budget last longer. It eventually boils down to increasing efficiency and lowering fleet expenses. It can be challenging to find solutions to reduce fleet costs, and it definitely isn’t a rapid process. 

Trying your best to improve the expense management of your vehicle can help you save a lot of money. It also helps business owners to set fuel efficiency goals and save on taxes. 

Continue reading to figure out some of the ways you can cut down on the expense of your fleet in no time!

 

1. Strengthen procedures and policies for safe driving

There’s a major difference made to a fleet when you apply the right driver procedures and policies. A policy focused on the safety of drivers particularly can have a great effect in reducing the risk of the fleet. 

You are responsible for ensuring your drivers are wholly competent in handling your vehicles. Part of your policy should include drivers being licensed, remaining in excellent standing, and being greatly educated in road safety. Any matter related to the vehicle is also relevant. In your policy, you should include:

  • An outline of the steps needed to service and maintain vehicles
  • Explanation to drivers on how they can access refueling funds 
  • A detailed reporting procedure the drivers can use in case they are in a road incident. 

When you lay out vehicle maintenance expectations, general operating procedures, and good driving behavior, you will improve communication, get rid of confusion, and go a long way to securing your drivers. 

 

2. Ensure your vehicles are roadworthy 

All your vehicles need to pass the roadworthiness test. This means that you should be proactive about accurate record-keeping and vehicle servicing. 

Make sure every fleet vehicle, including “gray fleet” vehicles that the employees own, is fit to be used commercially. Then, set up a preventive maintenance program. Make sure you record service dates and also all procedures should be done by service providers.

 

3. Reduce fuel consumption and improve fuel economy

One of the most important expenses for businesses that deal with transporting goods is fuel. You can reduce fuel consumption and improve the fuel economy of your fleet by purchasing smaller vehicles. 

Apart from downsizing the models of vehicles, you can also decide to downsize the engines. For instance, you can drastically improve fuel economy when you switch from an engine that has six cylinders to one that has four engines with a turbo. 

Expenses can also be increased by bad driving habits. This can be prevented by educating the drivers on the reason they should avoid punching the brakes, idling, and every other habit that can negatively affect fuel efficiency. A vehicle tracking system can also be used to monitor drivers and give alerts when there’s high fuel consumption. 

Another thing is that, instead of cash or credit cards, you should make use of fuel cards. When choosing a fuel card provider, select the one that makes it easy to track expenditure through online reporting tools. 

 

4. Concentrate on compliance so you won’t spend much on fleet costs

There can be unexpected costs without complete control and oversight of your fleet. Lack of compliance is where most of these costs come from. 

The HSWA (Health and Safety at Work Act) of New Zealand stipulates that one of the primary responsibilities of a business is to ensure the health and safety of its business. For a fleet irrespective of its size, driver supervision, driving policy, and vehicle maintenance checks are all important. 

If these elements aren’t in place, driver injuries, road incidents, and vehicle downtime will most likely occur and this will result in the skyrocketing of your costs. 

 

5. Create a roadmap for continuous improvement of your fleet 

Any business with the aim of success should try to get continual improvement. Your fleet should be an important focus of such efforts. 

Begin by creating some KPIs (key performance indicators) for your fleet like mileage, fuel costs, and amount of time with no incidents. After that, track each metric both by vehicle and driver. 

With this approach, you can instantly reveal opportunities to improve. You’ll see the drivers who are most at risk and need remedial driver lessons and the vehicles that are due for replacement or deeper servicing.

 

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

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