Depending on the industry, fleet can account for nearly 20% of total corporate operating costs. What actions are you taking today to reduce your company’s fleet expenses?
In 2020, Element’s strategic consulting team identified over $1.5 billion in cost savings for clients. Keep reading to discover best practices to reduce costs in the areas of vehicle depreciation, fuel, and maintenance. These three areas make up on average 77% of total fleet costs for companies in North America.
Sync acquisition and disposition timing by establishing a regular replacement rhythm. Where feasible, place vehicle orders in the fall when the new model year is released to avoid further vehicle depreciation.
Are you planning to offer a vehicle purchase program for your employees? Establish a resale policy which benefits both parties. By selling vehicles close to fair market value, the company can reduce depreciation costs and the driver can benefit from a reasonable sale price, while avoiding dealer markup and transaction fees.
If a single OEM (Original Equipment Manufacturer) can meet your vehicle needs and volume requirements, we recommend sourcing from one partner to improve tier discounts through economies of scale.
Establish a driver policy for fuel purchases to make employees aware of which fuel type is most appropriate for their vehicle. Opting for regular fuel rather than premium for instance can help you save costs.
Determine and communicate reasonable driver limits for car washes.
Leverage exception reporting to detect fuel fraud. Element’s fuel program allows for extra controls over fuel spend such as limiting the number of transactions within 24 hours or by vehicle type.
Network utilization: establish a policy and educate drivers on the importance of leveraging a managed network maintenance location. Take advantage of the negotiated pricing and buying power to reduce transaction costs.
Select the appropriate case limits for maintenance transactions to reduce approval time and subsequent driver downtime.
Monitor and manage preventative maintenance compliance. Through Element’s maintenance program, proactive preventative maintenance notification reminders are sent to drivers based on OEM guidelines. Adhering to routine preventative maintenance can help prevent costly repairs and associated vehicle downtime.
Looking for more fleet insights? Check out part one and two of our series, focused on fleet safety and sustainability.
