Keep Fleet Costs to A Minimum

Fleet managers are not just responsible for keeping their fleet moving, but for managing the fleet’s costs as tightly as possible. This is very important because, for a company whose main income is generated by their employees travelling to either business meetings or delivering goods/services to their customers, fleet costs will be one of the largest overheads that they have. Among the many areas where expenditure needs to be tightly controlled are insurance services, vehicle purchase/lease/hire, fuel and tyres.

Tyres

It is estimated that over £2 million per year is spent on tyres in Welsh public services alone, so tyre expense needs to be effectively managed. Companies generally keep their tyre replacement limits at 2-3mm. However, the lowest legal limit for tyres is 1.6mm. If records are kept of how often tyres are being changed on each car, and comparisons made between employee’s miles per tyre ratios then fleet managers can ascertain as to whether tyre degradation is due to careless driving or not. Employees also need to be encouraged to check the tyre pressure at regular intervals, as under inflated tyres increase fuel consumption. Companies that have had ‘green tyres’ installed on their company vehicles have noticed that fuel consumption can be lowered by up to 5%.

Fuel Cards

The popularity of fuel cards is increasing and in addition to the savings that can made on fuel through their use, fleet managers can get reports which show if fuel is being claimed for correctly on monthly expenses, and usage compared amongst employee to see if there is any inappropriate usage happening. Fuel in some companies, usually larger ones, can be issued through large onsite tanks. This needs to be constantly monitored, along with the amount of fuel that is put into each vehicle and at what intervals, need to be recorded. This is to stop fuel being siphoned off, and identify and stop it if it is.

Driver Training

Employee education and training is also an important factor in keeping fleet running costs down. With an effective vehicle and road awareness training scheme, your employees should be able to drive their vehicles more efficiently, reducing your fuel expenditure and the amount of accidents your employees have. Training and awareness are things that need to constantly evolve, it’s not good enough to just inform employees of how you want things to be done, they need to feel involved and this will help get the lessons of safe driving across. Managers should also ‘practise what they preach’, so employees see that everyone is adopting ‘best practise’ approaches.

Insurance

The insurance provider that a company uses needs to be carefully considered and tendered out to at least 3 service providers, if possible. This is because insurance is a highly lucrative market and prices can vary hugely between providers. Insurance providers often provide breakdown and maintenance contracts as part of the deal. In this instance, employees will be given a card with the telephone number they need to call in the event of a breakdown or accident, and the policy number they need to quote. The overall package insurance providers offer needs to be considered because some with have lower monthly payments but no extras. Others will have slightly higher monthly payments but if the extras prevent the need to buy the other services separately, then overall you could save money. Breakdown and maintenance cover can also sometimes be offered if you are purchasing a vehicle outright, but this will vary hugely amongst manufacturers and brokers.

To reduce your insurance premiums you could consider installing a vehicle tracking system, as many insurance providers up to 30% in premium discounts with the installation of a vehicle tracking solution. In fact vehicle tracking systems can further assist businesses to reduce and control their fleet costs. As mentioned earlier in this article driving behaviour can have a significant impact on tyre degradation. Vehicle tracking solutions allow business to monitor instances of harsh acceleration, braking, cornering and speeding. Through monitoring driving behaviour, preventative measures can immediately be applied to the employee in question.

Fuel cards provide businesses with an immediate way of reducing fuel expenditure but a vehicle tracking system can be used to further build on those savings by allowing fleet managers to ensure that their drivers are using the most efficient routes and keeping fuel wasting activities, which include engine idling and speeding, to a minimum. Additionally, businesses can also ensure that employees do not use their vehicles or fuel for private journeys, making sure that company paid fuel is only used for business purposes.