Managing fleet costs while maintaining quality control is consistently a challenge for fleet managers. A fleet strategy is crucial to a company’s bottom line. Successful fleet management companies know there are many different ways to reduce costs and increase a fleet’s efficiency.
Here are seven areas where costs can be cut while preserving productivity or quality:
Fleets need to coordinate a long list of factors to run efficiently. All of these combined create a large amount of data on how one’s fleet operates. It’s important to constantly analyze your vehicles, staff, and services to determine whether or not everything is running at peak efficiency and subsequently look for ways to improve processes at present and for the future.
2. Fleet Software
Using fleet software is a sound way to keep track of everything your fleet does. It gives you an immediate overall picture of exactly where there are potential savings. Saving time saves your fleet money, and fleet software shows you where time is being spent down to the second.
Most managers are already using the most cost-effective gas stations available to fuel their vehicles. Fleet managers can also get savings on fuel by educating their drivers on how to drive more efficiently. Using a fuel card program is one way to get an in-depth look at how much is being spent on fuel and how you can reduce costs, monitor MPG, and prevent fraud at the same time.
Along with fuel costs, monitoring how many miles your fleet travels is key. Businesses can glean long-term benefits by examining miles driven, routing, with an eye toward reducing mileage, risk, and cost. Analyzing your fleet’s mileage offers invaluable insight into driving habits and target points for costs reduction. GPS/Telematics solutions are invaluable in this regard.
5. Repairs and Service
When you have a fleet of vehicles, there are undoubtedly going to be vehicles in need of routine maintenance. Making sure your firm is getting the best value on service work is important to fleet management companies. 20-40% can be saved by managing maintenance scope and commodity costs. Service and repair fees can quickly spiral out of control, and a good fleet management company tracks and monitors maintenance expenditures.
6. Fleet Purchases
Fleet management companies buy through large fleet buying programs with substantial rebates. This typically holds true for out-of-stock purchases as well. This ensures you get what you want, how you want it, and when you want it – at the lowest cost possible. Fleet programs are offered by most OEM’s for companies with fleets of 15+ vehicles and other incentives apply to companies that are members of specific organizations that have additional incentives. Purchase timing is also something to consider. There are good times to buy/lease and bad times. Fleet managers do this for a living and can provide consistent advice and best practices.
7. Tax Breaks
Fleet management companies can structure leases in a variety of ways depending on the tax goals of your fleet. In other words, capital lease structure could be used over operating lease structure depending on your company’s tax goals for the duration of the lease period. Depending on the size company and other purchasing in the current year, firms may be eligible for other IRS and State benefits, ranging from tax credits for electric vehicles, grants for alternative fuel vehicles, accelerated depreciation, or sales tax and income tax savings through leasing.
Fleet managers analyze fleets for a living and help you their fleets to find out where they can cut costs. There is always room to improve operations and efficiency. Using analytics, fleet software, fuel, mileage, repairs and service, bulk purchases, and tax breaks will ultimately help you to cut costs and add value to your fleet operations.