Reduce Fleet Costs
Eliminating Surplus Vehicles is the Key to Reducing Vehicle Fleet Costs
Organizations are faced with the reality of doing more with less. Fleet Managers are often asked – “can you make large fleet cost reductions without impacting services?” The answer is now “yes”.
BFO utilization studies regularly achieve a 20:1 ROI and can markedly improve fleet performance, remove surplus vehicles and save costs. Fleet studies are full of unforeseen traps. Make sure you select a consultant with fleet utilization audit and GPS data expertise to ensure success.
How to Reduce Vehicle Ownership Costs
View a case study on how ro reduce vehicle depreciation costs by removing surplus fleet vehicles.
Fixed vehicle costs can total 80% or more of vehicle ownership costs in the first 3 years of ownership. Fixed costs are incurred whether you own or lease the vehicle so you pay either way.
Vehicle Fixed costs [varies by Country]
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Depreciation [50%]
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Interest/Finance Charges [19%]
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Insurance [6%]
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Repairs & Maintenance [6%] and
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Vehicle Registration and Inspections [3%]
Key Points
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Removing surplus vehicles [i.e. downsizing] is the number one way to lower your fleet costs.
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Fixed vehicle outlays exceed 80% of vehicle ownership costs.
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Every surplus vehicle costs money whether it is used or not.
Fleet Managers can take the following steps to Reduce Fleet Costs
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Downsize to remove surplus vehicles. Contact BFO to do a vehicle utilization study. BFO concurrent vehicle usage analysis will accurately identify your surplus fleet vehicles.
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Conduct a vehicle utilization study BEFORE procuring new fleet vehicles so you do not replace surplus vehicles.
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Optimize trip routes and plan ahead so multiple trips aggregate into one.
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Identify and remove service area overlaps.
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Right-size so the optimal sized vehicle is used for a job.
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Determine if a meeting can be done by phone or online.
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Keep vehicle maintenance up-to-date.
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Curb poor driver behavior if identified.
How to Calculate a Fleet Vehicle Cost
Costs for the first 3-years of ownership for a 1.3-2.0L vehicle are listed in the table below.
Work done by the surplus vehicles will still be done by other vehicles. The variable costs such as fuel and tires will be passed on to the rest of the fleet, but overall a 84% saving per vehicle can be made.
*Cost items percentages may slightly differ by fleet.