6 easy ways to reduce your fleet costs in 2018
Fleet managers face a constant tension of trying to improve their operations while also reducing costs. The battle of sticking to a tight budget can seem like a never-ending battle, but it is one that can be overcome through a targeted strategy.
Below are 6 easy cost-cutting tips you can implement in the New Year to improve your organisation’s balance both in the short and long term.
1. Reduce Fuel Consumption
The fluctuation in the 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.
Ensuring your vehicles have regular services will not only improve driver safety but it ultimately means you use less fuel. Likewise having the right size vehicle for the job is important so as to avoid unnecessary fuel use.
Furthermore, 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.
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).
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.
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”
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.
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.
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 Fleetcare National Sales Manager Ross 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”.
This information has been adapted from an original publication by Fleetcare. For more information click here.