Mastering fleet vehicle selection: criteria to make informed choices
January 17, 2024
Fleet professionals are often tasked with making crucial decisions that significantly impact your organization's efficiency, cost-effectiveness, and environmental footprint. One such critical decision is selecting the right vehicles for your fleet. An in-depth understanding of the factors associated with this selection process can greatly influence your decisions. Element Fleet Management's guidance and expertise can assist you in navigating through the complex process of fleet vehicle selection.
Key considerations in fleet vehicle selection
What constitutes a fleet vehicle is broadly defined as any vehicle used by a business to conduct the operations of the company. Types of fleet vehicles can vary greatly based on the nature of the business, ranging from sedans used by sales teams to service vans to heavy-duty transport trucks. At times, a fleet can have different types of vehicles to contribute to different parts of their business.
When buying and selecting vehicles for your fleet, there are four main considerations:
1. Operational needs
It is vital to consider the suitability of a vehicle for a fleet driver's job function and operational needs. This factor plays a significant role in determining the fleet vehicle selection. Start by asking:
- What tasks will the vehicles perform?
- What cargo will they carry?
- How many passengers will they transport?
- How far will they travel?
- What type of terrain will they drive on?
- Is this for a short-term project or long-term use?
The answers to these questions will help you identify the type of vehicles that best suit your needs to ensure optimal operational efficiency and minimize unnecessary costs.
For instance, if your business involves long-haul transportation, investing in durable, fuel-efficient trucks would be a smart choice. On the other hand, if your fleet serves as an urban delivery service, smaller, more maneuverable vehicles might be more appropriate.
Costs can play a significant role in fleet selection. These include not just the initial acquisition cost, but also ongoing expenses such as fuel, maintenance, and potential resale value.
By understanding how your order volume affects your vehicle concessions, you can leverage larger orders for discounts from original equipment manufacturers (OEMs), lowering fleet acquisition costs, leading to significant savings for your fleet. With Element's partnership, our end-to-end fleet ordering and acquisition services can help streamline this process, ensuring you get the best value for your investment.
Choosing lighter, more fuel-efficient vehicles that align with a fleet driver's job function can also contribute to cost savings opportunities. In fact, according to the U.S. Department of Energy, reducing a vehicle's weight by 10% can improve its fuel economy by 6% to 8%1. Combined with the lower emissions and potential tax benefits associated with fuel-efficient vehicles, this could result in substantial savings over the lifecycle of fleet vehicles.
3. Safety and technology
The importance of safety and technology in fleet vehicle selection cannot be overstated. Fleet safety is crucial not only for protecting the drivers and vehicles but also for mitigating liability risks. Research conducted by the Network of Employers for Traffic Safety1 (NETS) shows that motor vehicle accidents cost employers between $47.4 and $72.2 billion annually in medical care, legal expenses, property damage, and lost productivity. Investing in vehicles with advanced safety features can significantly reduce collision rates, thereby leading to cost savings.
Contemporary safety technologies, such as automatic emergency braking (AEB), lane departure warning, and blind-spot detection, have been proven to minimize accidents. A study by the Insurance Institute for Highway Safety2 (IIHS) shows that forward collision warning and AEB can reduce rear-end crash rates by 50%. Similarly, vehicles equipped with lane departure warnings saw a decrease in single-vehicle, sideswipe, and head-on crashes of 11% and a 21% decrease in injuries3 from such accidents.
Newer vehicles are generally safer due to advancements in design, materials, and safety systems, therefore can be more cost-effective in the long run. They are also typically more fuel-efficient and equipped with technologies like GPS tracking, telematics, and onboard diagnostics. These technologies provide valuable data that can be used to monitor vehicle health, optimize route planning, and improve driver behavior, all contributing to overall operational efficiency and cost savings.
While the upfront cost of these newer, safer, and more technologically advanced vehicles may be higher, the investment can be offset by lower collision-related costs including repairs, productivity, and injuries to employees that result in workers compensation and medical expenses, as well as third party liability claims. That's why it is prudent to consider the long-term benefits of safety and technology, when selecting vehicles for your fleet.
4. Environmental impacts
As sustainability commitments and environmental regulations continue to grow, it has become increasingly crucial for fleet operators to carefully evaluate the environmental impact of their vehicles. When selecting fleet vehicles, several considerations related to environmental impacts come into play.
One of the key considerations is the carbon footprint of the fleet. Electrification is a highly viable option for many fleets looking to reduce their carbon emissions. While some fleets are transitioning to fully electric vehicles (EVs), integration of hybrid electric vehicles (HEVs) could be best suited for your fleet and can contribute to a cleaner and more low-carbon future.
Another aspect to consider is the total cost of ownership (TCO) of the fleet vehicles. While EVs may have a higher upfront cost compared to internal combustion engine (ICE) vehicles, they often have lower operational and maintenance costs over the vehicle's lifetime. Factors such as fuel savings, reduced maintenance requirements, and potential government incentives can offset the initial investment and make electrification financially viable for fleets in the long run.
Additional factors to consider related to fleet electrification are:
- Driving range,
- Charging infrastructure, and
- Operational requirements.
With its comprehensive range of services and solutions, Arc by Element is dedicated to providing extensive support to fleets that are already on the electrification journey or planning to embark on it. By leveraging Element's expertise and resources, fleets can confidently navigate the transition to EVs.
Navigating fleet vehicle lifecycles
We understand that optimal fleet lifecycle management involves more than just the selection of the new vehicle. Deciding when to cycle out your existing fleet vehicles can contribute significantly to a well-planned roadmap impacting your TCO. This may seem complex, but Element's deep expertise, robust data, and advanced technology can help you save both time and money in navigating fleet vehicle selection and replacement.
Lifecycle cost analysis benefits
At Element, we offer Strategic Advisory Services that include creating custom lifecycle cost analyses for clients. This analysis involves evaluating all the costs associated with owning a vehicle over its useful life, from acquisition to disposal. It can help you make informed decisions about vehicle selection, ensuring you optimize expenses while maintaining operational efficiency.
Fleet acquisition and remarketing
When it comes to acquiring new vehicles or remarketing your existing fleet, maximizing the value of your vehicles is of the utmost importance. Our database is one of the largest in the industry, offering robust benchmarking and best practice sharing. We gather fleet data from multiple third-party sources such as auction data, supplemented by our proprietary data, providing a comprehensive view to support your end-to-end decision-making process. These robust insights and our regression analyses can help our clients make a more informed decision on what vehicles to sell today or hold to ensure getting the most out of your fleet vehicle investment.
Make informed decisions this fleet ordering cycle
Take control of your fleet ordering cycle by making informed decisions. Balancing operational needs, costs, and environmental impacts is crucial when selecting the right vehicles for your fleet. Don't wait to optimize your fleet management strategy - partner with Element Fleet Management and leverage our expertise and solutions to navigate this complex process. Take the first step towards achieving your fleet vehicle acquisition and replacement goals by contacting us today.
1 Network of Employers for Traffic Safety (NETS) – Cost of Motor Vehicle Crashes to Employers
2 Insurance Institute for Highway Safety (IIHS) – Advanced driver assistance
3 Insurance Institute for Highway Safety (IIHS) – Real-world benefits of crash avoidance technologies
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